TIDMJDW
RNS Number : 8045S
Wetherspoon (JD) PLC
19 March 2021
19 March 2021
J D WETHERSPOON PLC
PRELIMINARY RESULTS
(For the 26 weeks ended 24 January 2021)
FINANCIAL HIGHLIGHTS
-- Revenue GBP431.1m (2020: GBP933.0m) -53.8%
-- Like-for-like sales -53.9%
Before exceptional items (pre-IFRS 16):
-- Loss before tax -GBP46.2m (2020: profit GBP57.9m)
-- Operating loss -GBP20.7m (2020: profit GBP76.6m)
-- Earnings per share -36.4p (2020: 44.3p)
Before exceptional items (post-IFRS 16):
-- Loss before tax -GBP52.8m (2020: profit GBP51.6m)
-- Operating loss -GBP17.6m (2020: profit GBP80.8m)
-- Earnings per share -38.7p (2020: 39.3p)
After exceptional items (pre-IFRS 16):
-- Loss before tax -GBP61.4m (2020: profit GBP42.0m)
-- Operating loss -GBP28.3m (2020: profit GBP76.6m)
-- Earnings per share -43.1p (2020: 30.5p)
After exceptional items (post-IFRS 16):
-- Loss before tax -GBP68.0m (2020: profit GBP35.7m)
-- Operating loss -GBP25.2m (2020: profit GBP80.8m)
-- Earnings per share -49.1p (2020: 25.5p)
Commenting on the results, Tim Martin, the Chairman of J D
Wetherspoon plc, said:
" Wetherspoon and its employees, along with the hospitality
industry, have worked very hard to comply with ever-changing
government guidelines. It is disappointing that so many
regulations, implemented at tremendous cost to the nation, appear
to have had no real basis in common sense or science - for example,
curfews, "substantial meals" with drinks and masks for bathroom
visits.
"The future of the industry, and of the UK economy, depends on a
consistent set of sensible policies, and the ending of lockdowns
and tier systems, which have created economic and social mayhem and
colossal debts, with no apparent health benefits."
Enquiries:
John Hutson Chief Executive Officer 01923 477777
Ben Whitley Finance Director 01923 477777
Eddie Gershon Company spokesman 07956 392234
Photographs are available at: newscast.co.uk
Notes to editors
1. J D Wetherspoon owns and operates pubs throughout the UK and
Ireland. The Company aims to provide customers with good-quality
food and drink, served by well-trained and friendly staff, at
reasonable prices. The pubs are individually designed and the
Company aims to maintain them in excellent condition.
2. Visit our website jdwetherspoon.com
3. This announcement has been prepared solely to provide
additional information to the shareholders of J D Wetherspoon, in
order to meet the requirements of the UK Listing Authority's
Disclosure and Transparency Rules. It should not be relied on by
any other party, for other purposes. Forward-looking statements
have been made by the directors in good faith using information
available up until the date that they approved this statement.
Forward-looking statements should be regarded with caution because
of inherent uncertainties in economic trends and business
risks.
4. The annual report and financial statements 2020 has been
published on the Company's website on 16 October 2020.
5. The current financial year comprises 52 trading weeks to 25 July 2021.
6. The next trading update will be issued on 7 July 2021.
CHAIRMAN'S STATEMENT AND OPERATING REVIEW
When Wetherspoon published its annual results on 16 October
2020, we criticised the constant changes of direction by the
government, following the first UK lockdown.
The criticism fell on deaf ears- the government instigated a
second national lockdown in November, followed by a reopening in
December under changing "tier" systems, which closed two thirds of
our pubs by Christmas. After Christmas, a third lockdown was
instigated.
In recent weeks a beer-garden-only reopening has been decreed
for April, followed by table-service-only for May, before a full
reopening in June.
The hospitality trade has made strenuous efforts to comply with
capacity, social distancing and hygiene regulations, with great
success - there have been very few outbreaks of the virus in pubs,
as many commentators have noted.
The conclusions of many studies are encapsulated in a comment
from Councillor Ian Ward, leader of Birmingham City Council, who
said on 11 September 2020:
"The data we have shows that the infection rate has risen,
mainly due to social interactions, particularly private household
gatherings. In shops and hospitality venues there are strict
measures in place to ensure they are Covid-free, whereas it is much
easier to inadvertently pass on the virus in someone's house, where
people are more relaxed and less vigilant."
Greg Fell, Director of Public Health, Sheffield City Council, in
evidence to Parliament's Select Committee on Science and Technology
(27 January 2021) said:
"Most of the transmission events are household-to-household
transmissions. Hospitality does not crop up as a terribly big
factor on our risk radar. When we look at the common exposures
dataset, hospitality is not a huge risk".
Dr Richard Harling MBE, Director of Health and Care,
Staffordshire County Council, in evidence to the same committee
said:
"Similarly, back in the summer and autumn, once you put
transmission between household members aside, the next most
important one was transmission between different households. The
hospitality sector did feature, but much lower down the list".
A study by Imperial College (27 November 2020) said that
"...households showed the highest transmission rates".
The evidence of Sweden v the UK and Florida v California perhaps
suggests that draconian lockdowns can be counterproductive, whereas
there is strong evidence that social distancing and hygiene
measures work.
By the time pubs were closed by the government after Christmas,
a total of 1,244 or 3.3% of 37,800 Wetherspoon employees had tested
positive for Covid-19, from reopening in July. For the UK as a
whole, 2.3 million people had tested positive by then, according to
the UK government website (https://coronavirus.data.gov.uk/ ), 3.4%
of the population. Since pub employees spend more time in pubs than
anyone else, these statistics do not indicate that pubs are centres
of transmission, which some commentators have suggested. There were
no reported instances of the virus being transmitted from staff to
customers in Wetherspoon pubs, or vice versa, since the reopening
last July.
Wetherspoon recorded over 50 million customer visits to its pubs
from reopening in July, to the year end, and there has been no
evidence of even a single outbreak, as defined by the health
authorities, during this time.
The main problem is that the government and SAGE have been
unscientific in their approach- ignoring evidence, such as the
evidence above, which contradicts their "narrative". Rather than
embracing, debating and investigating anomalies and
counterintuitive information, as real scientists do, they have,
instead, tried to discredit dissenters, as Wetherspoon News has
pointed out. These tactics can work in an election campaign, but
risk disaster in the day-to-day management of problems.
Examples of entirely unscientific initiatives include the
introduction of a curfew, the requirement for a "substantial meal"
with a drink and the wearing of face masks to visit the
bathroom.
This approach has contributed to the UK having one of the
biggest hits to the economy of any country, and the worst health
outcomes of any large country, according to the Times (below).
Fatalities
per million
Country* population
---------- -------------
UK 1,854
Italy 1,695
US 1,604
Spain 1,549
Mexico 1,512
*Countries with populations greater than 20m
Figures as of 7pm, 17 March 2021
Source: WHO
US figures source: CDC
The government's response to Covid-19, and its effects on the
hospitality industry, have been discussed, at some length, in the
latest edition of Wetherspoon News (see link:
https://www.jdwetherspoon.com//media/files/pdf-documents/wetherspoon-news/wetherspoon-news-spring-2021_single-pages.pdf
).
It remains to be seen whether the government will adhere to its
reopening plan, following the successful vaccination programme - or
whether the knee-jerk reaction to the latest news, which seems to
have been the main generator of policy and regulations, will
continue.
It is impossible to decipher a pattern in sales, given the
lockdowns and changes in regulations. In the 26 weeks ended 24
January 2021, like-for-like sales decreased by 53.9%, with total
sales decreasing by 53.8% to GBP431.1m (2020: GBP933.0m).
Like-for-like bar sales decreased by 57.3% (2020: +4.2%), food
by 48.4% (2020: +5.6%) and fruit/slot machines by 53.7% (2020:
+20.3%). Like-for-like hotel room sales decreased by 51.8% (2020:
-1.3%).
Pre-IFRS 16 operating profit decreased to -GBP20.7m (2020:
GBP76.6m). The operating margin was -4.8% (2020: 8.2%). Loss before
tax and exceptional items is GBP46.2m (2020: GBP57.9m profit),
including property losses of GBP1.3m (2020: GBP0.2m). Earnings per
share, including shares held in trust by the employee share scheme,
and before exceptional items, were -36.4p (2020: 43.3p).
Total capital investment was GBP19.0m in the period (2020:
GBP135.8m). GBP1.4m was spent on freehold reversions of properties
where Wetherspoon was the tenant (2020: GBP70.6m), GBP7.1m on new
pub openings and extensions, mainly in respect of the Keavan's Port
Hotel in Dublin (2020: GBP34.8m), and GBP9.6m on existing pubs
(2020: GBP32.8m).
Post IFRS16 exceptional items totalled GBP12.4m (2020:
GBP14.1m). There was a GBP0.1m (2020: GBP3.6m) loss on disposal and
an impairment charge of GBP2.1m (2020: GBP12.3m), relating to the
company's decision to vacate a leasehold pub on the 'break date'.
The cash effect of the exceptional charges was an outflow of
GBP7.5m. The cash outflow mainly relates to items such as pub
screens between tables to improve social distancing, 'top ups' to
furlough payments and associated taxes.
Free cash flow, after capital investment of GBP9.6m in existing
pubs (2020: GBP32.8m), GBP6.8m for share purchases for employees
(2020: GBP9.3m) and payments of tax and interest, was -GBP77.3m
(2020: GBP49.0m). Free cash flow per share was -64.5p (2020:
46.7p).
Comment on IFRS 16
As indicated previously, I believe IFRS 16 to be confusing and
misleading. Common sense suggests that rent should be regarded as a
cost in the income statement. Instead, a complex formula disregards
actual rent paid and substitutes a notional asset (the 'right to
occupy'), which attracts a depreciation charge, and a notional
interest charge based on the total rental liability for the lease
term, even though the great majority of the rental liability does
not crystallise, in almost all cases, for many years.
Part of the purpose may be to equate rent with debt. However,
for companies like Wetherspoon at least, rent bears almost no
resemblance to debt.
Debt is invariably for a fixed term, with the full amount
repayable at the end of the term. Debt therefore carries a
refinancing risk.
In contrast, Wetherspoon's leases, for example, carry no
refinancing risk - there is just a liability to pay the rent when
it falls due.
Of course leases carry a great risk - as so many restaurant
companies and retailers have unfortunately demonstrated. However,
it does not make sense to treat future liabilities in this way -
why not treat future business rates or VAT liabilities in this way,
if it's appropriate for rent?
The most important criticism of IFRS 16 is that the complexity
which it creates means that it will be understood by only experts -
in general, good for the experts, but bad for business efficiency,
shareholders and the public.
For the period ended 24 January 2021, as a result of the new
standard, operating profit has increased by GBP3.1m and finance
costs by GBP10.8m. There will be no impact on cash flows.
Share buybacks
No shares were purchased by the company for cancellation in the
period under review (2020: GBP6.5m).
The company raised cGBP93.7m new equity in January 2021.
Property
During the period, we opened two new pubs and closed or sold
two, bringing the number open at the period end to 872. Following a
review of our estate, in recent years, we placed around 100 pubs on
the market, most of which have now been sold.
Ten years ago (FY11) our freehold/leasehold split was
43.4/56.6%. At the half year end, it was 64.4/35.6%.
Financing
As at 24 January 2021, the company's net debt, including bank
borrowings and finance leases, but excluding derivatives, was
GBP811.9m (2020: GBP817.0m).
Net debt plus 'trade and other payables' have remained at
approximately the same levels from year end 2019, as shown in the
table below:
Half Year Half Year
Year End 2020 Year End 2019
2021 2020
GBPm GBPm GBPm GBPm
Net Debt 812 817 805 737
Trade and other
payables 197 268 315 308
Net Debt +
Trade and other
payables 1,009 1,085 1,119 1,045
------------------ ------ ---------- ------ ----------
As a result of the pub closures, the normal net-debt-to-EBITDA
covenant has been waived by the company's lenders. The
net-debt-to-EBITDA ratio has been replaced by a minimum liquidity
covenant of GBP75m. As at 24 January 2021, the company had
liquidity of GBP225.0m.
There has been an increase in total facilities to GBP1,041.3m
(2020: GBP993.0m), following the addition of a CLBILS loan in
August 2020.
Post period end, in March 2021, the company agreed a further
GBP51.7m CLBILS loan.
The company previously stated that its intention to keep the
net-debt-to-EBITDA ratio at around 3.5 times for the foreseeable
future.
The ratio might rise for a temporary period, if there were, for
example, a sudden deterioration in trading, in which instance the
company would seek to reduce the level in a timely manner. Insofar
as it is possible to generalise, the board believes that debt
levels of between 0 and 2 times EBITDA are a sensible long-term
benchmark. A higher level of debt may be justifiable - at times
when interest rates are low and other factors are favourable.
Since 2003, the company has bought back 116.8m shares at a cost
of GBP515.9m. In addition, since 2011, the company has bought the
freeholds of 159 pubs at a cost of GBP379.8m. In the last 12
months, the company has issued 24.1m shares to raise GBP235m.
Dividends
In the current circumstances, the board has not recommended the
payment of an interim dividend (2020: GBP0).
Corporation tax
Owing to the losses sustained in the period, and expected for
the rest of the year, we expect the overall corporation tax charge
for the financial year, including current and deferred taxation, to
be 12.1%.
Contribution to the economy
Wetherspoon Tax Payments In Financial Years 2011 To 2020
2020 2019 2018 2017 2016 2015 2014 2013 2012 2011
-------------------------------------
GBPm GBPm GBPm GBPm GBPm GBPm GBPm GBPm GBPm GBPm
------------------------------------- ------- ------ ------ ------ ------ ------ ------ ------ ------ ------
VAT 244.3 357.9 332.8 323.4 311.7 294.4 275.1 253.0 241.2 204.8
Alcohol duty 124.2 174.4 175.9 167.2 164.4 161.4 157 144.4 136.8 120.2
PAYE and NIC 106.6 121.4 109.2 96.2 95.1 84.8 78.4 70.2 67.1 65.2
Business rates 39.5 57.3 55.6 53.0 50.2 48.7 44.9 46.4 43.9 39.8
Corporation tax 21.5 19.9 26.1 20.7 19.9 15.3 18.1 18.4 18.2 21.2
Corporation tax credit (historic - - - - - -2.0 - - - -
capital allowances)
Fruit/slot machine duty 9.0 11.6 10.5 10.5 11.0 11.2 11.3 7.2 3.3 2.9
Climate change levies 10.0 9.6 9.2 9.7 8.7 6.4 6.3 4.3 1.9 1.6
Stamp duty 4.9 3.7 1.2 5.1 2.6 1.8 2.1 1.0 0.8 1.1
Sugar tax 2.0 2.9 0.8 - - - - - - -
Fuel duty 1.7 2.2 2.1 2.1 2.1 2.9 2.1 2.0 1.9 1.9
Carbon tax - 1.9 3.0 3.4 3.6 3.7 2.7 2.6 2.4 0.8
Premise licence and TV licences 1.1 0.8 0.7 0.8 0.8 1.6 0.7 0.7 0.5 0.4
Landfill tax - - 1.7 2.5 2.2 2.2 1.5 1.3 1.3 1.1
Furlough Tax Rebate -124.1 - - - - - - - - -
TOTAL TAX 440.7 763.6 728.8 694.6 672.3 632.4 600.2 551.5 519.3 461.0
------------------------------------- ------- ------ ------ ------ ------ ------ ------ ------ ------ ------
TAX PER PUB (GBP000) 533 871 825 768 705 673 662 632 617 560
TAX AS % of NET SALES 34.9% 42.0% 43.0% 41.8% 42.1% 41.8% 42.6% 43.1% 43.4% 43.0%
*Source: J D Wetherspoon plc Annual Reports and Accounts 2012 -
2020
Wetherspoon is proud to pay its share of tax and, in this
respect, is a major contributor to the economy. Wetherspoon, its
customers and employees have paid GBP6.1 billion of tax to the
government in the last 10 years.
The table below shows the tax generated by the company in its
financial years 2011-20. During this period, taxes amounted to
about 42 per cent of every pound which went 'over the bar', net of
VAT - about 11 times the company's profit.
VAT equality
As we have previously stated, the government would generate more
revenue and jobs if it were to create tax equality among
supermarkets, pubs and restaurants. Supermarkets pay virtually no
VAT in respect of food sales, whereas pubs pay 20%.
This has enabled supermarkets to subsidise the price of
alcoholic drinks, widening the price gap, to the detriment of pubs
and restaurants.
Pubs also pay around 20 pence a pint in business rates, whereas
supermarkets pay only about 2 pence, creating further
inequality.
Pubs have lost 50% of their beer sales to supermarkets in the
last 35 or so years.
It makes no sense for supermarkets to be treated more leniently
than pubs, since pubs generate far more jobs per pint or meal than
do supermarkets, as well as far higher levels of tax. Pubs also
make an important contribution to the social life of many
communities and have better visibility and control of those who
consume alcoholic drinks.
Tax equality is particularly important for residents of less
affluent areas, since the tax differential is more important there
- people can less afford to pay the difference in prices between
the on and off trade.
As a result, in these less affluent areas, there are often fewer
pubs, coffee shops and restaurants, with less employment and
increased high-street dereliction.
Tax equality would also be in line with the principle of
fairness in applying taxes to different businesses.
On 3 March 2021, the chancellor, Rishi Sunak, announced a
six-month extension to the temporary reduction of VAT to 5% in
respect of food and non-alcoholic drinks sales. In July 2020, when
this reduction was first announced, the company lowered its pricing
on a wide range of products, including food, soft drinks and real
ale. If the chancellor decides to make these VAT reductions
permanent, the company intends to retain these lower prices
indefinitely.
Further progress
As previously highlighted, the company's philosophy is to try
continuously to upgrade as many areas of the business as
possible.
The Food Standards Agency, in association with local
authorities, regularly inspects licensed and other food businesses
in the UK and awards marks from zero to five, according to the
standards it finds.
Currently, 97% of our pubs have obtained the maximum five rating
(2020: 97%), under the FSA scheme, with 99% receiving a rating of
four or above (2020: 99%). This record reflects extremely hard work
by our central catering, audit and operations team, as well as by
the excellent teams in our pubs.
In addition, the company runs a government-approved
apprenticeship scheme and participates in a professional management
diploma and degree course, in conjunction with Leeds Beckett
University.
Corporate governance
In the 2019 annual report, the company made a number of
criticisms of the corporate governance system, which can be found
in appendix 1.
ESG
There is an increasing focus from investors on ESG matters. We
have provided commentary in numerous previous press announcements
on the company's moves over many years on these matters, which were
driven by our desire to do what was best for our employees,
customers and, as a result, the company. Our initiatives have
included pay increases, bonuses and free shares, improved staff
training, internal promotion, recycling initiatives and, we
believe, appropriate governance arrangements.
Bloomberg
In the immediate aftermath of the first lockdown, in early 2020,
a number of inaccurate statements regarding Wetherspoon appeared in
the media.
When media organisations were made aware of the inaccuracies, in
line with normal journalistic principles, corrections and/or
apologies were published by the BBC, SKY, the Times, the
Independent, the Sun, the Daily Mail, the Daily Star, the Mirror,
Forbes and others.
The corrections and apologies have been published in Wetherspoon
News, a magazine for pub customers (see link:
https://www.jdwetherspoon.com//media/files/pdf-documents/events-2021/press-corrections-180321.pdf
).
However, Bloomberg Businessweek, a weekly magazine, published an
article recently, containing many inaccuracies, which, apart from a
few points, it has refused to correct.
Some of the inaccuracies may seem minor, but they have been used
as a "factual" base, which creates an unfavourable impression of
Wetherspoon.
For example, the article says that Wetherspoon is "sacrificing
worker pay for affordable prices".
However, Wetherspoon pays at or above the rates of its main,
publicly-quoted, pub competitors and at or above the rates of
McDonald's, for example. Since our prices are substantially lower
than pub competitors, it is untrue, and illogical, to say that
there has been a "sacrifice", as Bloomberg has asserted.
In addition, Wetherspoon has awarded bonuses and free shares to
employees, equivalent to 55% of its profits after tax, in the last
15 years (see table below). Approximately 83% of the awards have
been to employees working in pubs. 15,032 employees own shares in
the company. Since the share scheme was introduced, Wetherspoon has
awarded 20.6 million free shares to employees, approximately 16% of
the shares in issue today. Few companies in any industry match this
record, which further undermines the Bloomberg allegation of a
"sacrifice".
Wetherspoon: bonuses and free shares vs profits, 2006 - 2020
Bonus (Loss)/Profit
and free after
shares tax
--------------
Bonus
etc as
Financial Year GBPm GBPm % of profits
---------------- ---------- -------------- --------------
2020 33 -30 -
2019 46 80 58%
2018 43 84 51%
2017 44 77 57%
2016 33 57 58%
2015 31 57 53%
2014 29 59 50%
2013 29 65 44%
2012 24 57 42%
2011 23 52 43%
2010 23 51 44%
2009 21 45 45%
2008 16 36 45%
2007 19 47 41%
2006 17 40 41%
--------------
Total 428 777 55%
*Source: J D Wetherspoon plc Annual Reports and Accounts 2006 -
2020
The article also says that Wetherspoon "took advantage of a beer
supply surplus to secure cheap contracts". This is pure fiction.
Wetherspoon beer contracts usually run for five to ten years and
beer is brewed in short cycles of a few weeks, reflecting current
demand. It is therefore nonsense to claim that Wetherspoon secured
"contracts" due to an imaginary, short-term "beer supply
surplus".
The article says that Wetherspoon plays "host to drunken
students". "Playing host", which infers a premeditated strategy,
would be unlawful, since pubs have a legal obligation, strictly
enforced by the licensing authorities, to prevent drunkenness. Pub
liquor licences can be lost if legislation is not adhered to.
Wetherspoon has never, in its history, lost a licence on these
grounds - or on any other grounds, although many companies
have.
The Bloomberg article says that Wetherspoon "unlike traditional
pubs ... divides its pubs into gridlike seating plans...reducing
the frequency of chance interactions". This claim is completely
nonsensical. There is no observable difference between Wetherspoon
seating layouts and those of many competitors. Indeed, since
Wetherspoon normally converts unlicensed buildings, which vary in
size and shape, into pubs, there is a vast difference in the type
of seating layouts that are used. Implying some sort of strategy to
reduce "chance interactions" is absurd.
The article says that Wetherspoon is "Most-loved, Most-hated".
"Most-hated" is tribal and sectarian, and is untrue. An independent
market research survey by CGA BrandTrack of 5,000 consumers in
2018, for example, reported that Wetherspoon is "the preferred
brand to eat out at". A similar survey in 2019, also by CGA
BrandTrack, found that Wetherspoon was the "standout choice for
branded drinking occasions".
The article says that I (Tim Martin) am a "lifelong skeptic of
the EU" and that I "began in the 1990s to push for Britain to prune
its ties with Brussels, then to sever them entirely". This is
complete cobblers.
My first opposition to EU policy, which was NOT opposition to
the EU itself, was when it was proposed that the UK join the euro
in around 2000, following the failure of the euro's predecessor,
the exchange rate mechanism, in the early 1990s.
I did not vote in the 2014 European elections, won by UKIP,
which precipitated a referendum, nor did I ever personally campaign
for there to be a referendum on the issue.
I only decided to "vote leave", as did millions of others,
following the then Prime Minister's difficulty in obtaining the
"fundamental (EU) reform" he had sought in early 2016.
It is obviously ridiculous to describe someone as a "lifelong
skeptic" of the EU, if they decide to "vote leave" at the age of
60.
The article repeats the myth, since corrected by, for example,
the Times, that I said "go work at Tesco". I never said those
words, as reputable news organisations have now acknowledged. In
fact, I said, at a time of high anxiety about empty supermarket
shelves, with Tesco alone seeking 45,000 extra workers, "if you
think it's a good idea (to work at a supermarket), do it, I can
completely understand it. If you've worked for us before I promise
you, we'll give you first preference if you want to come back".
Bloomberg appears to be unaware that hospitality workers are
entitled to earn a second income from supermarkets, in addition to
their furlough payments.
The article says that Wetherspoon "leverage[ed] its scale to
beat out smaller competitors". This is misleading. The main
historical competitors to Wetherspoon, as is clearly obvious, have
been large pub and restaurant companies, and supermarkets. Many
smaller pub competitors, trading in close proximity to Wetherspoon,
like Loungers, Fuller's, Young's and St Austell have grown
substantially.
As a final example, the article incorrectly said that
Wetherspoon "brought in" workers from Europe and "staff were as
likely to be from Warsaw or Sofia as Wiltshire or Suffolk". In
fact, Wetherspoon did not "bring in" anyone - and only 8% of our
workforce, invariably excellent employees, have European
passports.
The article contains too many other errors to correct, without
boring shareholders - including basic errors as to the number of
pubs the company has operated at various stages.
Bloomberg is not a member of the Independent Press Standards
Organisation ("IPSO"), the UK's press regulatory body, which can
compel corrections to inaccuracies. However, Bloomberg's own code
("The Bloomberg Way") says, "Show, don't tell: back up statements
with facts...". It also says:
"Be accurate: there is no such thing as being first if the news
is wrong".
"The Bloomberg Way" was written by Bloomberg News
Editor-in-Chief emeritus, Matthew Winkler. A possible explanation
for the errors is that the UK journalist, who wrote the article,
contacted HENRY Winkler, known as "The Fonz", by mistake. This may
be unlikely, since The Fonz frequently intoned "exactamundo" and
"correctamundo" - not a creed that is evident in the article.
Outlook
As indicated above, Wetherspoon and its employees, along with
the hospitality industry, have worked very hard to comply with
ever-changing government guidelines. It is disappointing that so
many regulations, implemented at tremendous cost to the nation,
appear to have had no real basis in common sense or science - for
example, curfews, "substantial meals" with drinks, and masks for
bathroom visits.
The future of the industry, and of the UK economy, depends on a
consistent set of sensible policies, based on scientific evidence,
rather than on political expediency.
Tim Martin
Chairman
19 March 2021
Appendix 1 - Corporate Governance, Extract from Wetherspoon 2019
Annual Report
The underlying ethos of corporate governance is to comply with
the guidelines or to explain why you do not.
The original creators of the rules must have realised that
business success takes many forms, so a rigid structure, applicable
to all companies cannot be devised - hence the requirement to
explain non-compliance.
Wetherspoon has always explained its approach. For example, in
2016, our approach to corporate governance was summed up in the
annual report as follows:
"...I have said that many aspects of current corporate
governance advice, as laid out in the Combined Code, are deeply
flawed..."
I then went on to say:
"I believe that the following propositions represent the views
of sensible shareholders:
The Code itself is faulty, since it places excessive emphasis on
meetings between directors and shareholders and places almost no
emphasis on directors taking account of the views of customers and
employees which are far more important, in practice, to the future
well-being of any company.
For example, in the UK Corporate Governance Code (September
2014), there are 64 references to shareholders, but only three to
employees and none to customers - this emphasis is clearly
mistaken.
-- The average institutional shareholder turns over his
portfolio twice annually, so it is advisable for directors to be
wary of the often perverse views of 'Mr Market' (in the words of
Benjamin Graham), certainly in respect of very short-term
shareholders.
-- A major indictment of the governance industry is that modern
annual reports are far too long and often unreadable. They are full
of semiliterate business jargon, including accounting jargon, and
are cluttered with badly written and incomprehensible governance
reports.
-- It would be very helpful for companies, shareholders and the
public, if the limitations of corporate governance systems were
explicitly recognised. Common sense, management skills and business
savvy are more important to commercial success than board
structures.
All of the major banks and many supermarket and pub companies
have suffered colossal business and financial problems, in spite
of, or perhaps because of, their adherence to inadvisable
governance guidelines.
-- There should be an approximately equal balance between
executives and non-executives. A majority of executives is not
necessarily harmful, provided that non-executives are able to make
their voice heard.
-- It is often better if a chairman has previously been the
chief executive of the company. This encourages chief executives,
who may wish to become a chairman in future, to take a long-term
view, avoiding problems of profit-maximisation policies in the
years running up to the departure of a chief executive.
-- A maximum tenure of nine years for non-executive directors is
not advisable, since inexperienced boards, unfamiliar with the
effects of the 'last recession' on their companies, are likely to
reduce financial stability.
-- An excessive focus on achieving financial or other targets
for executives can be counter-productive. There's no evidence that
the type of targets preferred by corporate governance guidelines
actually works and there is considerable evidence that attempting
to reach ambitious financial targets is harmful.
-- As indicated above, it is far more important for directors to
take account of the views of employees and customers than of the
views of institutional shareholders. Shareholders should be
listened to with respect, but caution should be exercised in
implementing the views of short-term shareholders. It should also
be understood that modern institutional shareholders may have a
serious conflict of interest, as they are often concerned with
their own quarterly portfolio performance, whereas corporate health
often requires objectives which lie five, 10 or 20 years in the
future."
I also quoted Sam Walton of Walmart in the 2014 annual report.
He said:
"What's really worried me over the years is not our stock price,
but that we might someday fail to take care of our customers or
that our managers might fail to motivate and take care of our
(employees).... Those challenges are more real than somebody's
theory that we're heading down the wrong path.... As business
leaders, we absolutely cannot afford to get all caught up in trying
to meet the goals that some ... institution ... sets for us. If we
do that, we take our eye off the ball.... If we fail to live up to
somebody's hypothetical projection for what we should be doing, I
don't care. We couldn't care less about what is forecast or what
the market says we ought to do."
PRE-IFRS 16 INCOME STATEMENT for the 26 weeks ended 24 January
2021
J D Wetherspoon plc, company
number: 1709784
The pre-IFRS 16 statements are included for information
purposes only and do not form part of the GAAP primary statements
Notes Unaudited Unaudited Unaudited Unaudited Unaudited Unaudited
26 weeks 26 weeks 26 weeks 26 weeks 52 weeks 52 weeks
ended ended ended ended ended ended
24 January 24 January 26 January 26 January 26 July 26 July
2021 2021 2020 2020 2020 2020
Before After Before After Before After
exceptional exceptional exceptional exceptional exceptional exceptional
items items items items items items
GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
---------------------- ------ ------------ ------------ ------------ ------------ ------------ ------------
Revenue 1 431,072 431,072 933,021 933,021 1,262,048 1,262,048
Operating costs (451,816) (451,816) (856,461) (856,461) (1,254,896) (1,254,896)
Operating costs
- exceptional 4 - (7,536) - - - (13,201)
---------------------- ------ ------------ ------------ ------------ ------------ ------------ ------------
Operating
(loss)/profit 2 (20,744) (28,280) 76,560 76,560 7,152 (6,049)
Property
(losses)/gains 3 (1,320) (1,320) (172) (172) (641) (641)
Property losses
- exceptional 3 - (57) - (15,948) - (47,476)
---------------------- ------ ------------ ------------ ------------ ------------ ------------ ------------
(Loss)/profit before
interest and tax (22,064) (29,657) 76,388 60,440 6,511 (54,166)
Finance income 6 167 167 41 41 161 161
Finance costs 6 (24,275) (24,275) (18,508) (18,508) (40,767) (40,767)
Finance costs -
exceptional 6 - (5,511) - - - -
---------------------- ------ ------------ ------------ ------------ ------------
(Loss)/profit before
tax (46,172) (59,276) 57,921 41,973 (34,095) (94,772)
Income tax
(expense)/credit 7 2,510 2,510 (12,487) (12,487) 4,158 4,158
Income tax expense
- exceptional 7 - 5,171 - 1,801 - 1,004
---------------------- ------ ------------ ------------ ------------ ------------ ------------ ------------
(Loss)/profit for
the period (43,662) (51,595) 45,434 31,287 (29,937) (89,610)
---------------------- ------ ------------ ------------ ------------ ------------ ------------ ------------
(Loss)/earnings per
ordinary share (p)
- Basic (1) 8 (36.4) (43.1) 44.3 30.5 (27.6) (82.6)
- Diluted (1) 8 (36.4) (43.1) 43.3 29.8 (27.6) (82.6)
---------------------- ------ ------------ ------------ ------------ ------------ ------------ ------------
RECONCILIATION TO THE STATUTORY PROFIT for the 26 weeks ended 24
January 2021
Notes Unaudited Unaudited Unaudited Unaudited Unaudited Unaudited
26 weeks 26 weeks 26 weeks 26 weeks 52 weeks 52 weeks
ended ended ended ended ended ended
24 January 24 January 26 January 26 January 26 July 26 July
2021 2021 2020 2020 2020 2020
Before After Before After Before After
exceptional exceptional exceptional exceptional exceptional exceptional
items items items items items items
GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
------------------------ ------ ------------ ------------ ------------ ------------ ------------ ------------
(Loss)/profit before
IFRS 16 (43,662) (53,728) 45,434 31,287 (29,937) (89,610)
Operating costs 26,078 26,078 28,443 28,443 58,503 58,503
Amortisation and
depreciation 23
Right-of-use assets (23,042) (23,042) (24,425) (24,425) (49,059) (49,059)
Lease premium 86 86 192 192 368 368
Disposal of leases 3 1,088 1,088 347 347 1,125 1,125
Impairment 3
Right-of-use assets - (2,133) - - - (4,722)
Property, plant
and equipment - 1,504 - - - 3,311
Onerous leases
provision - 629 - - - 1,411
Finance costs 6 (11,015) (11,015) (11,078) (11,078) (21,980) (21,980)
Finance income 6 210 210 225 225 451 451
Income tax expense 7 3,887 1,532 1,189 1,189 2,012 2,641
------------------------ ------ ------------ ------------
(Loss)/profit for
the period (46,370) (58,791) 40,327 26,180 (38,517) (97,561)
------------------------ ------ ------------ ------------ ------------ ------------ ------------ ------------
PRE-IFRS 16 CASH FLOW STATEMENT for the 26 weeks ended 24
January 2021
J D Wetherspoon plc, company number:
1709784
The pre-IFRS 16 statements are included for information purposes
only and do not form part of the GAAP primary statements
Notes Unaudited Unaudited Unaudited Unaudited Unaudited Unaudited
cash free cash free cash free
flow cash flow cash flow cash
flow flow flow
(1) (1) (1)
26 weeks 26 weeks 26 weeks 26 weeks 52 weeks 52 weeks
ended ended ended ended ended ended
24 January 24 January 26 January 26 January 26 July 26 July
2021 2021 2020 2020 2020 2020
GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
---------------------------- ------ ----------- ----------- ----------- ----------- ---------- ----------
Cash flows from operating
activities
Cash used in/generated
from operations 9 (42,944) (42,944) 131,546 131,546 38,718 38,718
Interest received 105 105 40 40 59 59
Interest paid (29,185) (29,185) (17,027) (17,027) (29,914) (29,914)
Corporation tax paid 12,201 12,201 (21,480) (21,480) (10,971) (10,971)
----------- ----------- ---------- ----------
Net cash flow from
operating
activities (59,823) (59,823) 93,079 93,079 (2,108) (2,108)
---------------------------- ------ ----------- ----------- ----------- ----------- ---------- ----------
Cash flows from investing
activities
Reinvestment in pubs (9,602) (9,602) (32,764) (32,764) (43,370) (43,370)
Reinvestment in business
and IT projects (872) (872) (1,768) (1,768) (926) (926)
Investment in new pubs
and pub extensions (7,115) - (34,773) - (50,408) -
Freehold reversions
and investment properties (1,423) - (70,633) - (98,467) -
Proceeds of sale of
property, plant and
equipment - - 4,160 - 4,810 -
----------- ----------- ---------- ----------
Net cash flow from
investing
activities (19,012) (10,474) (135,778) (34,532) (188,361) (44,296)
---------------------------- ------ ----------- ----------- ----------- ----------- ---------- ----------
Cash flows from financing
activities
Equity dividends paid 11 - - (8,371) - (8,371) -
Purchase of own shares
for cancellation - - (6,455) - (6,456) -
Purchase of own shares for
share-based payments (6,771) (6,771) (9,260) (9,260) (11,125) (11,125)
Loan issue cost 10 (238) (238) (321) (321) (1,323) (1,323)
Advances under private
placement - - 98,000 - 98,000 -
Advances under/repayment
of bank loans 10 48,333 - (25,000) - 100,000 -
Advances under
asset-financing 10 - - - - 16,152 -
Issue of share capital 26 91,523 - - - 137,995 -
Asset financing principal
payments 10 (3,439) - (1,431) - (2,902) -
---------------------------- ------ ----------- ----------- ----------- ----------- ---------- ----------
Net cash flow from
financing
activities 129,408 (7,009) 47,162 (9,581) 321,970 (12,448)
---------------------------- ------ ----------- ----------- ----------- ----------- ---------- ----------
Net change in cash and
cash equivalents 10 50,573 - 4,463 - 131,501 -
---------------------------- ------ ----------- ----------- ----------- ----------- ---------- ----------
Opening cash and cash
equivalents 18 174,451 - 42,950 - 42,950 -
Closing cash and cash
equivalents 18 225,024 - 47,413 - 174,451 -
---------------------------- ------ -----------
Free cash flow 8 - (77,306) - 48,966 - (58,852)
---------------------------- ------ ----------- ----------- ----------- ----------- ---------- ----------
Free cash flow per ordinary
share 8 - (64.5)p - 46.7p - (54.2)p
[1] Free cash flow is a measure not required by accounting
standards; a definition is provided in our accounting policies.
PRE-IFRS 16 BALANCE SHEET as at 24 January 2021
J D Wetherspoon plc, company number: 1709784
The pre-IFRS 16 statements are included for information purposes
only and do not form part of the GAAP primary statements
Notes Unaudited Unaudited Unaudited
24 January 26 January Restated
26 July
2021 2020 2020
GBP000 GBP000 GBP000
---------------------------------- ------ ------------ ------------ ------------
Assets
Non-current assets
Property, plant and equipment 1,422,888 1,458,531 1,439,467
Intangible assets 12 8,956 12,378 8,895
Investment property 14 6,037 11,572 11,527
Other non-current assets 7,434 7,696 7,520
Deferred tax assets 7 11,580 9,706 15,617
Total non-current assets 1,456,895 1,499,883 1,483,026
---------------------------------- ------ ------------ ------------ ------------
Current assets
Assets held for sale 17 - 350 -
Inventories 15 22,369 23,453 23,095
Receivables 26,187 27,544 36,387
Cash and cash equivalents 18 225,024 47,413 174,451
Current income tax receivables 7 - - 7,672
Total current assets 273,580 98,760 241,605
------------ ------------
Total assets 1,730,475 1,598,643 1,724,631
---------------------------------- ------ ------------ ------------ ------------
Liabilities
Current liabilities
Borrowings 20 (7,610) (3,286) (7,610)
Trade and other payables (197,335) (314,831) (267,677)
Current income tax liabilities 7 (4,180) (1,275) -
Provisions (4,518) (3,116) (4,759)
Total current liabilities (213,643) (322,508) (280,046)
---------------------------------- ------ ------------ ------------ ------------
Non-current liabilities
Borrowings 20 (1,029,343) (848,654) (983,828)
Derivative financial instruments 22 (65,477) (57,096) (82,194)
Deferred tax liabilities 7 (30,273) (38,212) (42,138)
Provisions 21 (1,488) (1,659) (1,488)
Other liabilities 23 (9,738) (10,607) (9,738)
Total non-current liabilities (1,136,319) (956,228) (1,119,386)
---------------------------------- ------ ------------ ------------ ------------
Total liabilities (1,349,962) (1,278,736) (1,399,432)
---------------------------------- ------ ------------ ------------ ------------
Net assets 380,513 319,907 325,199
---------------------------------- ------ ------------ ------------ ------------
Shareholders' equity
Share capital 26 2,575 2,094 2,408
Share premium account 143,294 143,294 143,294
Capital redemption reserve 2,337 2,337 2,337
Other reserves 234,579 - 141,002
Hedging reserve (49,369) (47,390) (66,577)
Currency translation reserve 5,089 1,603 7,089
Retained earnings 42,008 217,969 95,646
---------------------------------- ------ ------------
Total shareholders' equity 380,513 319,907 325,199
---------------------------------- ------ ------------ ------------ ------------
INCOME STATEMENT for the 26 weeks ended 24 January 2021
J D Wetherspoon plc, company
number: 1709784
Notes Unaudited Unaudited Unaudited Unaudited Audited Audited
26 weeks 26 weeks 26 weeks 26 weeks 52 weeks 52 weeks
ended ended ended ended ended ended
24 January 24 January 26 January 26 January 26 July 26 July
2021 2021 2020 2020 2020 2020
Before After Before After Before After
exceptional exceptional exceptional exceptional exceptional exceptional
items items items items items items
GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
------------------ ------ ------------ ------------ ------------ ------------ ------------ ------------
Revenue 1 431,072 431,072 933,021 933,021 1,262,048 1,262,048
Operating costs (448,694) (448,694) (852,251) (852,251) (1,245,084) (1,245,084)
Operating costs
- exceptional - (7,536) - - - (13,201)
------------------ ------ ------------ ------------ ------------ ------------ ------------ ------------
Operating
(loss)/profit 2 (17,622) (25,158) 80,770 80,770 16,964 3,763
Property gains 3 (232) (232) 175 175 484 484
Property losses
- exceptional 3 - (2,190) - (15,948) - (47,476)
------------------ ------ ------------ ------------ ------------ ------------ ------------ ------------
(Loss)/profit
before interest
and tax (17,854) (27,580) 80,945 64,997 17,448 (43,229)
Finance income 6 377 377 266 266 612 612
Finance costs 6 (35,290) (35,290) (29,586) (29,586) (62,747) (62,747)
Finance costs
- exceptional 6 - (5,511) - - - -
------------------ ------ ------------ ------------ ------------ ------------ ------------
(Loss)/profit
before tax (52,767) (68,004) 51,625 35,677 (44,687) (105,364)
Income tax
(expense)/credit 7 6,397 6,397 (11,298) (11,298) 6,170 6,170
Income tax
(expense)/credit
- exceptional 7 - 2,816 - 1,801 - 1,633
------------------ ------ ------------ ------------ ------------ ------------ ------------ ------------
(Loss)/profit
for the period (46,370) (58,791) 40,327 26,180 (38,517) (97,561)
------------------ ------ ------------ ------------ ------------ ------------ ------------ ------------
Earnings per
ordinary
share (p)
- Basic (1) 8 (38.7) (49.1) 39.3 25.5 (35.5) (89.9)
- Diluted (1) 8 (38.7) (49.1) 38.5 25.0 (35.5) (89.9)
------------------ ------ ------------ ------------ ------------ ------------ ------------ ------------
STATEMENT OF COMPREHENSIVE INCOME for the 26 weeks ended 24
January 2021
Notes Unaudited Unaudited Audited
26 weeks 26 52 weeks
weeks
ended ended ended
24 January 26 26 July
January
2021 2020 2020
GBP000 GBP000 GBP000
---------------------------------------------------- ------ ----------- ---------- ----------
Items which will be reclassified subsequently
to profit or loss:
Interest-rate swaps: gain/(loss) taken to
other comprehensive income 22 21,245 (8,024) (33,122)
Tax on items taken directly to other comprehensive
income 7 (4,037) 1,364 7,275
Currency translation differences (1,933) (3,109) 1,293
---------------------------------------------------- ------ ----------- ---------- ----------
Net gain/(loss) recognised directly in other
comprehensive income 15,275 (9,769) (24,554)
(Loss)/profit for the period (58,791) 26,180 (97,561)
---------------------------------------------------- ------ ----------- ---------- ----------
Total comprehensive (loss)/income for the
period (43,516) 16,411 (122,115)
---------------------------------------------------- ------ ----------- ---------- ----------
CASHFLOW STATEMENT for the 26 weeks ended 24 January 2021
J D Wetherspoon plc, company
number: 1709784
Notes Unaudited Unaudited Unaudited Unaudited Audited Audited
cash free cash free cash free
flow cash flow cash flow cash
flow flow flow
(1) (1) (1)
26 weeks 26 weeks 26 weeks 26 weeks 52 weeks 52 weeks
ended ended ended ended ended ended
24 January 24 January 26 January 26 January 26 July 26 July
2021 2021 2020 2020 2020 2020
GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
-------------------------------- ------ ----------- ----------- ----------- ----------- ---------- ---------
Cash flows from operating
activities
Cash (used in)/generated
from operations 9 (28,749) (28,749) 160,036 160,036 75,665 75,665
Interest received 105 105 40 40 59 59
Interest paid (29,185) (29,185) (17,027) (17,027) (29,914) (29,914)
Corporation tax paid 12,201 12,201 (21,480) (21,480) (10,971) (10,971)
Lease interest (10,843) (10,843) (9,134) (9,134) (18,080) (18,080)
----------- ----------- ---------- ---------
Net cash flow from operating
activities (56,471) (56,471) 112,435 112,435 16,759 16,759
-------------------------------- ------ ----------- ----------- ----------- ----------- ---------- ---------
Cash flows from investing
activities
Reinvestment in pubs (9,602) (9,602) (32,764) (32,764) (43,370) (43,370)
Reinvestment in business
and IT projects (872) (872) (1,768) (1,768) (926) (926)
Investment in new pubs
and pub extensions (7,115) - (34,773) - (50,408) -
Freehold reversions and investment
properties (1,423) - (70,633) - (98,467) -
Proceeds of sale of property,
plant and equipment - - 4,160 - 4,810 -
----------- ----------- ---------- ---------
Net cash flow from investing
activities (19,012) (10,474) (135,778) (34,532) (188,361) (44,296)
-------------------------------- ------ ----------- ----------- ----------- ----------- ---------- ---------
Cash flows from financing
activities
Equity dividends paid 11 - - (8,371) - (8,371) -
Purchase of own shares
for cancellation 26 - - (6,455) - (6,456) -
Purchase of own shares for
share-based payments (6,771) (6,771) (9,260) (9,260) (11,125) (11,125)
Loan issue cost 10 (238) (238) (321) (321) (1,323) (1,323)
Advances under private
placement - - 98,000 - 98,000 -
Advances under/repayment
of bank loans 10 48,333 - (25,000) - 100,000 -
Advances under asset-financing 10 - - - - 16,152 -
Lease principal payments 23 (3,352) (3,352) (19,356) (19,356) (18,867) (18,867)
Issue of share capital 26 91,523 - - - 137,995 -
Asset-financing principal
payments 10 (3,439) - (1,431) - (2,902) -
-------------------------------- ------ ----------- ----------- ----------- ----------- ---------- ---------
Net cash flow from financing (10,361
activities 126,056 ) 27,806 (28,937) 303,103 (31,315)
-------------------------------- ------ ----------- ----------- ----------- ----------- ---------- ---------
Net change in cash and
cash equivalents 10 50,573 - 4,463 - 131,501 -
-------------------------------- ------ ----------- ----------- ----------- ----------- ---------- ---------
Opening cash and cash
equivalents 18 174,451 - 42,950 - 42,950 -
Closing cash and cash
equivalents 18 225,024 - 47,413 - 174,451 -
-------------------------------- ------ -----------
Free cash flow 8 - (77,306) - 48,966 - (58,852)
-------------------------------- ------ ----------- ----------- ----------- ----------- ---------- ---------
Free cash flow per ordinary
share 8 - (64.5)p - 46.7p - (55.2)p
[1] Free cash flow is a measure not required by accounting
standards; a definition is provided in our accounting policies.
BALANCE SHEET as at 24 January 2021
J D Wetherspoon plc, company number:
1709784
Notes Unaudited Unaudited Audited
24 January 26 January 26 July
2021 2020 2020
Restated(1) Restated(1)
GBP000 GBP000 GBP000
-------------------------------------- ------ ------------ ------------ ------------
Assets
Non-current assets
Property, plant and equipment 13 1,425,570 1,458,531 1,442,778
Intangible assets 12 8,956 12,378 8,895
Investment property 14 6,037 11,572 11,527
Right-of-use assets 23 527,614 597,590 532,584
Deferred tax assets 7 11,580 9,706 15,617
Lease assets 23 10,506 11,319 11,115
-------------------------------------- ------
Total non-current assets 1,990,263 2,101,096 2,022,516
-------------------------------------- ------ ------------ ------------ ------------
Current assets
Inventories 15 22,369 23,453 23,095
Assets held for sale 17 - 350 -
Receivables 16 27,268 22,391 32,176
Cash and cash equivalents 18 225,024 47,413 174,451
Current income tax receivables 7 - - 10,313
Lease assets 23 1,691 1,561 1,736
Total current assets 276,352 95,168 241,771
------------ ------------
Total assets 2,266,615 2,196,264 2,264,287
-------------------------------------- ------ ------------ ------------ ------------
Liabilities
Current liabilities
Borrowings 20 (7,610) (3,286) (7,610)
Trade and other payables 19 (184,742) (315,773) (255,085)
Current income tax liabilities 7 - (86) -
Provisions 21 (2,797) (3,116) (3,038)
Lease liabilities 23 (72,481) (59,328) (65,343)
Total current liabilities (267,630) (381,589) (331,076)
-------------------------------------- ------ ------------ ------------ ------------
Non-current liabilities
Borrowings 20 (1,029,343) (848,654) (983,828)
Derivative financial instruments 22 (65,477) (57,096) (82,194)
Deferred tax liabilities 7 (30,273) (38,212) (42,138)
Lease liabilities 23 (508,518) (555,913) (507,803)
Total non-current liabilities (1,633,611) (1,499,875) (1,615,963)
-------------------------------------- ------ ------------ ------------ ------------
Total liabilities (1,901,241) (1,881,464) (1,947,039)
-------------------------------------- ------ ------------
Net assets 365,374 314,800 317,248
-------------------------------------- ------ ------------ ------------ ------------
Shareholders' equity
Share capital 26 2,575 2,094 2,408
Share premium account 143,294 143,294 143,294
Capital redemption reserve 2,337 2,337 2,337
Other reserves 234,579 - 141,002
Hedging reserve (49,369) (47,390) (66,577)
Currency translation reserve 5,089 1,603 7,089
Retained earnings 26,869 212,862 87,695
-------------------------------------- ------ ------------
Total shareholders' equity 365,374 314,800 317,248
-------------------------------------- ------ ------------ ------------ ------------
See note 31 for restatement details
The financial statements, approved by the board of directors and
authorised for issue on 19 March 2021, are signed on its behalf
by:
John Hutson Ben Whitley
Director Director
STATEMENT OF CHANGES IN EQUITY
J D Wetherspoon plc, company number: 1709784
Notes Share Share Capital Other Hedging Currency Retained Total
Reserves
capital premium redemption reserve translation earnings
account reserve reserve
GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
---------------------- ------ -------- ---------- ----------- --------- --------- ------------ ---------- ----------
At 28 July 2019 2,102 143,294 2,329 - (40,730) 5,370 204,447 316,812
Total comprehensive
income - - - - (6,660) (3,767) 26,838 16,411
Profit for the
period - - - - - - 26,180 26,180
Interest-rate swaps:
cash flow hedges 22 - - - - (8,024) - - (8,024)
Tax on items taken
directly
to comprehensive
income 7 - - - - 1,364 - - 1,364
Currency translation
differences - - - - - (3,767) 658 (3,109)
---------------------- ------ -------- ---------- ----------- --------- --------- ------------ ---------- ----------
Purchase of own
shares for
cancellation (8) - 8 - - - (6,455) (6,455)
Share-based payment
charges - - - - - - 5,543 5,543
Tax on share-based
payment 7 - - - - - - 120 120
Purchase of own
shares
for share-based
payments - - - - - - (9,260) (9,260)
Dividends 11 - - - - - - (8,371) (8,371)
---------------------- ------ -------- ---------- ----------- --------- --------- ------------ ---------- ----------
At 26 January 2020 2,094 143,294 2,337 (47,390) 1,603 212,862 314,800
---------------------- ------ -------- ---------- ----------- --------- --------- ------------ ---------- ----------
Total comprehensive
income - - - - (19,187) 5,486 (124,825) (138,526)
Loss for the period - - - - - - (123,741) (123,741)
Interest-rate swaps:
cash flow hedges 22 - - - - (25,097) - - (25,097)
Tax on items taken
directly
to comprehensive
income 7 - - - - 5,910 - - 5,910
Currency translation
differences - - - - - 5,486 (1,084) 4,402
---------------------- ------ -------- ---------- ----------- --------- --------- ------------ ---------- ----------
Issued share capital 314 137,681 - - - - - 137,995
Purchase of own
shares
for cancellation - - - - - - (1) (1)
Share-based payment
charges - - - - - - 5,162 5,162
Tax on share-based
payment 7 - - - - - - (317) (317)
Purchase of own
shares
for share-based
payments - - - - - - (1,865) (1,865)
Dividends 11 - - - - - - - -
---------------------- ------ -------- ---------- ----------- --------- --------- ------------ ---------- ----------
At 26 July 2020 2,408 280,975 2,337 - (66,577) 7,089 91,016 317,248
Reserve
reclassification - (137,681) - 141,002 - - (3,321) -
At 26 July 2020
restated 2,408 143,294 2,337 141,002 (66,577) 7,089 87,695 317,248
Total comprehensive
income - - - - 17,208 (2,000) (58,724) (43,516)
Loss for the period - - - - - - (58,791) (58,791)
Interest-rate swaps:
cash flow hedges 22 - - - - 21,245 - - 21,245
Tax on items taken
directly
to comprehensive
income 7 - - - - (4,037) - - (4,037)
Tax on items taken
directly
to comprehensive
income - - - - - (2,000) 67 (1,933)
---------------------- ------ -------- ---------- ----------- --------- --------- ------------ ---------- ----------
Issued share capital
(net of expenses) 167 - - 93,577 - - (2,222) 91,522
Share-based payment
charges - - - - - - 6,420 6,420
Tax on share-based
payment - - - - - - 471 471
Purchase of own
shares
for share-based
payments - - - - - - (6,771) (6,771)
---------------------- ------ -------- ---------- ----------- --------- --------- ------------ ---------- ----------
At 24 January 2021 2,575 143,294 2,337 234,579 (49,369) 5,089 26,869 365,374
---------------------- ------ -------- ---------- ----------- --------- --------- ------------ ---------- ----------
The currency translation reserve contains the accumulated
currency gains and losses on the long-term financing and balance
sheet translation of the overseas branch. The currency translation
difference reported in retained earnings is the restatement of the
opening reserves in the overseas branch at the current period end
currency exchange rate.
As at 24 January 2021, the company had distributable reserves of
GBP217.2m.
On 20 January 2021, the company raised gross proceeds of
GBP93.7m via a share placing. The placing shares were issued for
non-cash consideration by way of a 'cash box' structure, involving
a newly incorporated Jersey subsidiary of the company ('JerseyCo').
This structure involved the issue of ordinary and preference shares
by JerseyCo to the investment bank advising the company in respect
of the placing. These preference and ordinary shares were
subsequently acquired by the company and the preference shares
redeemed by JerseyCo. The acquisition by the company of the
ordinary shares in JerseyCo held by the investment bank resulted in
the company securing over 90% of the equity share capital of
JerseyCo. The company was able to rely, therefore, on section 612
of the Companies Act 2006, which provides relief from the
requirements under section 610 of the Companies Act 2006 to create
a share premium account. Therefore, no share premium was recorded
in relation to the placing shares. The premium over the nominal
value of the placing shares was credited to another reserve. This
other reserve is determined to be distributable for the purposes of
the Companies Act 2006.
Within the period the company reclassified the net proceeds from
a share placing completed on 30 April 2020 which had been
structured in exactly the same way as the more recent placing. The
financial statements for the last financial year have been restated
as a result.
NOTES TO THE FINANCIAL STATEMENTS
1. Revenue
Revenue disclosed in the income Unaudited Unaudited Audited
statement is analysed as follows:
26 weeks 26 weeks 52 weeks
ended ended ended
24 January 26 January 26 July
2021 2020 2020
GBP000 GBP000 GBP000
------------------------------------ ----------- ----------- ----------
Bar 239,927 559,426 761,065
Food 174,326 337,241 452,150
Slot/fruit machines 12,046 26,080 35,931
Hotel 4,570 9,468 11,780
Other 203 806 1,122
------------------------------------ ----------- ----------- ----------
431,072 933,021 1,262,048
------------------------------------ ----------- ----------- ----------
Included within food and drink revenue for the 26 weeks ended 24
January 2021 is an amount of GBP23.2m received from the government
in relation to the Eat Out to Help Out scheme which operated during
August 2020.
2. Operating (loss)/profit - analysis of costs by nature
This is stated after charging/(crediting): Unaudited Unaudited Audited
26 weeks 26 weeks 52 weeks
ended ended ended
24 January 26 January 26 July
2021 2020 2020
GBP000 GBP000 GBP000
-------------------------------------------- ----------- ----------- ------------
Variable concession rental payments 2,607 4,293 4,609
Short term leases 102 108 204
Repairs and maintenance 25,609 46,112 75,861
Net rent receivable (1,076) (841) (1,484)
Share-based payments (note 5) 6,420 5,543 10,705
Depreciation of property, plant
and equipment (note 13) 37,014 37,718 75,386
Amortisation of intangible assets
(note 12) 1,694 1,925 3,806
Depreciation of investment properties
(note 14) 12 34 79
Amortisation of right of use
assets (note 23) 23,042 24,425 49,059
-------------------------------------------- ----------- ----------- ------------
Analysis of continuing operations Unaudited Unaudited Audited
26 weeks 26 weeks 52 weeks
ended ended ended
24 January 26 January 26 July
2021 2020 2020
GBP000 GBP000 GBP000
-------------------------------------------- ----------- ----------- ------------
Revenue 431,072 933,021 1,262,048
Cost of sales (439,375) (828,189) (1,217,521)
-------------------------------------------- ----------- ----------- ------------
Gross (loss)/profit (8,303) 104,832 44,527
Administration costs (16,855) (24,062) (40,764)
-------------------------------------------- -----------
Operating profit/(loss) after
exceptional items (25,158) 80,770 3,763
-------------------------------------------- ----------- ----------- ------------
Included within cost of sales is GBP145.9m (2020: GBP325.9m)
relating to cost of inventory recognised as expense.
3. Property gains and losses
Unaudited Unaudited Audited
26 weeks 26 weeks 52 weeks
ended ended ended
24 January 26 January 26 July
2021 2020 2020
GBP000 GBP000 GBP000
--------------------------------------------- ----------- ----------- ---------
Non-exceptional property (gains)/losses
Disposal of fixed assets 1,268 (90) 1,002
Additional costs of disposal 52 217 258
Disposal of leases (1,088) (347) (1,125)
Other property gains - 45 (619)
----------- ---------
232 (175) (484)
Exceptional property (gains)/losses
Disposal of fixed assets - 3,003 2,769
Additional costs of disposal 57 619 684
Impairment of property, plant and equipment - 2,786 28,602
Impairment of intangible assets - 9,540 10,699
Impairment of right of use assets 2,133 - 4,722
----------- ---------
2,190 15,948 47,476
Total property losses 2,422 15,773 46,992
--------------------------------------------- ----------- ----------- ---------
Non-exceptional property losses, excluding disposal of lease
assets (note 8d), were GBP1,320,000 in the period (2020:
GBP172,000).
4. Exceptional items
Unaudited Unaudited Audited
26 weeks 26 weeks 52 weeks
ended ended ended
24 January 26 January 26 July
2021 2020 2020
GBP000 GBP000 GBP000
------------------------------- ----------- ----------- ---------
Operating exceptional items
Stock losses 2,200 - 5,862
Duty drawback (3,699) - -
Equipment 2,516 - 6,167
Local government support (5,238) - -
grants
Staff costs 11,562 - 17,062
Gaming machine settlement - - (15,890)
Other 195 - -
------------------------------- ----------- ----------- ---------
Total exceptional operating
costs 7,536 - 13,201
-------------------------------- ----------- ----------- ---------
Exceptional property losses
Disposal programme
Loss on disposal of pubs 57 3,622 3,453
Impairment of property plant
and equipment - 1,496 4,698
-------------------------------- ----------- ----------- ---------
57 5,118 8,151
Other property losses
Impairment of property, plant
and equipment - 1,290 23,904
Impairment of intangible
assets - 9,540 10,699
Impairment of right-of-use
asset 2,133 - 4,722
-------------------------------- ----------- ----------- ---------
2,133 10,830 39,325
Total exceptional property
losses 2,190 15,948 47,476
-------------------------------- ----------- ----------- ---------
Exceptional finance costs 5,511 - -
Exceptional tax
Exceptional tax items (2,816) - 4,252
Tax effect on exceptional
items - ( 1,801) (5,885)
-------------------------------- ----------- ----------- ---------
(2,816) ( 1,801) (1,633)
Total exceptional items 12,421 14,147 59,044
-------------------------------- ----------- ----------- ---------
Stock and duty drawback
A provision of GBP2,200,000 was made for perished stock, as a
result of the current closure period. A credit of GBP3,699,000 for
supplier credits was received for perished stock during the first
closure period.
Exceptional equipment
The company has recognised GBP2,516,000 for personal protective
equipment and hygiene products relating to the COVID-19
pandemic.
Local government support grants
The company has recognised GBP5,238,000 income of local
government support grants relating to the COVID-19 pandemic. These
are recognised on receipt.
Staff costs
The company has recognised an exceptional charge of GBP11.6m
which included GBP5.4m of payments made by the company
to staff over and above the furlough grants received and GBP6.2m
of redundancy and restructuring payments.
Exceptional finance costs
The company has recognised an exceptional charge of GBP5.5m,
GBP4.5m of which relates to an ineffective portion of hedge
accounting which has been recognised in the income statement in the
period. The company adopts hedge accounting, meaning that the
effective portion of the changes in the fair value of the
derivatives is recognised in comprehensive income, with any gain or
loss relating to an ineffective portion accounted for immediately
in the income statement. The remaining GBP1.0m is related to
covenant-waiver fees.
Taxation
The exceptional deferred tax credit of GBP2.8m relates to the
creation of a deferred tax asset in respect of tax losses
arising
from exceptional expenditure (GBP5.4m) and a prior-year
adjustment to a deferred tax liability recognised as exceptional
in
a prior period (GBP2.6m).
5. Employee benefits expenses
Unaudited Unaudited Audited
26 weeks 26 weeks 52 weeks
ended ended ended
24 January 26 January 26 July
2021 2020 2020
GBP000 GBP000 GBP000
------------------------------------ ----------- ----------- ----------
Wages and salaries 256,022 299,199 565,032
Government grants (97,539) - (131,539)
Social security costs 11,130 18,077 31,710
Other pension costs 4,058 4,324 8,308
Share-based payments 6,420 5,543 10,705
Redundancy and restructuring costs 6,179 - -
186,270 327,143 484,216
------------------------------------ ----------- ----------- ----------
Government grants disclosed above are amounts claimed by the
company under the coronavirus job retention scheme.
Employee numbers Unaudited Unaudited Audited
2021 2020 2020
Number Number Number
--------------------------- ---------- ---------- --------
Full-time equivalents
Managerial/administration 4,613 4,594 4,696
Hourly paid staff 19,659 21,647 20,952
--------------------------- ---------- ---------- --------
24,272 26,241 25,648
--------------------------- ---------- ---------- --------
2021 2020 2020
Number Number Number
--------------------------- ---------- ---------- --------
Total employees
Managerial/administration 4,722 4,687 4,792
Hourly paid staff 34,694 38,517 38,427
---------------------------
39,416 43,204 43,219
--------------------------- ---------- ---------- --------
The totals above relate to the monthly average number of
employees during the period (including directors on a service
contract).
Share-based payments Unaudited Unaudited Audited
26 weeks 26 weeks 52 weeks
ended ended ended
24 January 26 January 26 July
2021 2020 2020
----------------------------------------- ----------- ----------- ---------
Shares awarded during the year (shares) 852,261 568,821 568,821
Average price of shares awarded (pence) 957 1,542 1,542
Market value of shares vested during
the year (GBP000) 4,150 9,774 14,097
Total liability of the share-based
payments scheme (GBP000) 15,047 14,999 14,999
----------------------------------------- ----------- ----------- ---------
The shares awarded as part of the above schemes are based on the
cash value of the bonuses at the date of the awards. These awards
vest over three years, with their cost spread over their three-year
life. The share-based payment charge above represents the annual
cost of bonuses awarded over the past three years. All awards are
settled in equity.
The company operates two share-based compensation plans. In both
schemes, the fair values of the shares granted are determined by
reference to the share price at the date of the award. The shares
vest at a GBPNil exercise price - and there are
no market-based conditions to the shares which affect their
ability to vest.
6. Finance income and costs
Unaudited Unaudited Audited
26 weeks 26 weeks 52 weeks
ended ended ended
24 January 26 January 26 July
2021 2020 2020
GBP000 GBP000 GBP000
----------------------------------------- ----------- ----------- ---------
Finance costs
Interest payable on bank loans and
overdrafts 11,725 9,738 21,292
Amortisation of bank loan issue costs
(note 10) 860 722 1,541
Interest payable on swaps 9,115 6,561 14,522
Interest payable on asset-financing 352 207 503
Interest payable on private placement 2,223 1,280 2,909
Finance costs, excluding lease interest 24,275 18,508 40,767
Interest payable on leases 11,015 11,078 21,980
Total finance costs 35,290 29,586 62,747
Bank interest receivable (167) (41) (161)
Lease interest receivable (210) (225) (451)
-----------
Total finance income (377) (266) (612)
Net finance costs before exceptional
items 34,913 29,320 62,135
----------------------------------------- ----------- ----------- ---------
Exceptional finance costs (note 4) 5,511 - -
Net finance costs after exceptional
items 40,424 29,320 62,135
----------------------------------------- ----------- ----------- ---------
7. Income tax expense
(a) Tax on profit on ordinary activities
The standard rate of corporation tax in the UK is 19.00%. The
company's profits for the accounting period are taxed
at a rate of 19.00% (2020: 19.00%).
Unaudited Unaudited Unaudited Unaudited Audited Audited
26 weeks 26 weeks 26 weeks 26 weeks 52 weeks 52 weeks
ended ended ended ended ended ended
24 January 24 January 26 January 26 January 26 July 26 July
2021 2021 2020 2020 2020 2020
Before After Before After Before After
exceptional exceptional exceptional exceptional exceptional exceptional
items items items items items items
and prior and prior and prior
year adjustments year year
adjustments adjustments
GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
----------------------- ------------- ------------------ ------------- ------------- ------------- -------------
Taken through income
statement
Current income tax:
Current year current
income tax
(credit)/charge - - 12,367 10,858 (2,827) (10,329)
Previous year current
income tax
charge/(credit) - 2,641 (18) (18) 227 227
----------------------- ------------- ------------------ ------------- ------------- ------------- -------------
Total current income
tax - 2,641 12,349 10,840 (2,600) (10,102)
Deferred tax:
Origination and
reversal
of temporary
differences (6,297) (9,192) (1,051) (1,343) (3,660) (2,043)
Previous year deferred
tax (credit)/charge (100) (2,662) - - 90 90
Impact of change in
UK tax rate - - - - - 4,252
----------------------- ------------------
Total deferred tax (6,397) (11,854) (1,051) (1,343) (3,570) 2,299
Tax (credit)/charge (6,397) (9,213) 11,298 9,497 (6,170) (7,803)
----------------------- ------------- ------------------ ------------- ------------- ------------- -------------
Taken through equity
Current tax 4 4 (259) (259) (226) (226)
Deferred tax (8) (8) 139 139 423 423
(4) (4) (120) (120) 197 197
----------------------- ------------- ------------------ ------------- ------------- ------------- -------------
Taken through
comprehensive
income
Deferred tax
charge/(credit)
on swaps 4,037 4,037 (1,364) (1,364) (5,720) (5,720)
Impact of change in
UK tax rate - - - - (1,555) (1,555)
----------------------- -------------
Tax charge/(credit) 4,037 4,037 (1,364) (1,364) (7,275) (7,275)
----------------------- ------------- ------------------ ------------- ------------- ------------- -------------
7. Income tax expense (continued)
(b) Reconciliation of the total tax charge
The taxation charge for the 26 weeks ended 24 January 2021 is
based on the pre-exceptional loss before tax of GBP52.8m and the
estimated effective tax rate before exceptional items for the 26
weeks ended 24 January 2021 of 12.1% (2020: 13.8%).
This comprises a pre-exceptional current tax rate of 0% (2020:
5.8%) and a pre-exceptional deferred tax charge of 13.2%
(2020: 8.0% charge).
The UK standard weighted average tax rate for the period is
19.0% (2020: 19.0%). The current tax rate is lower than the UK
standard weighted average tax rate, owing to tax losses in the
period.
Unaudited Unaudited Un audited Unaudited Audited Audited
26 weeks 26 weeks 26 weeks 26 weeks 52 weeks 52 weeks
ended ended ended ended ended ended
24 January 24 January 26 January 26 January 26 July 26 July
2021 2021 2020 2020 2020 2020
Before After Before After Before After
exceptional exceptional exceptional exceptional exceptional exceptional
items items items items items items
GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
---------------------------- ------------- ------------- ------------- ------------- ------------- -------------
(Loss)/profit before income
tax (52,767) (68,004) 51,625 35,677 (44,687) (105,364)
(Loss)/profit multiplied
by the UK standard rate
of corporation tax 19.00%
(2019: 19.00%) (10,027) (12,921) 9,463 6,539 (8,491) (20,019)
Abortive acquisition costs
and disposals - - 95 95 6 6
Expenditure not allowable 69 69 (357) 199 86 216
Other allowable deductions (34) (34) (33) (33) (35) (35)
Non-qualifying depreciation
and disposals 2,287 2,287 1,442 2,009 83 5,122
Capital gains - effects
of reliefs 168 168 150 150 603 603
Share options and SIPs 181 181 41 41 622 622
Deferred tax on
balance-sheet-only
items - - (23) (23) (67) (67)
Effect of different tax
rates and unrecognised
losses in overseas
companies 1,059 1,059 539 539 706 1,180
Adjust current year
deferred
tax movement to average
of 19% - - - - - 4,252
Previous year adjustment
- current tax - 2,640 (19) (19) 227 227
Previous year adjustment
- deferred tax (100) (2,662) - - 90 90
---------------------------- ------------- ------------- ------------- ------------- ------------- -------------
Total tax expense reported
in the income statement (6,397) (9,213) 11,298 9,497 (6,170) (7,803)
---------------------------- ------------- ------------- ------------- ------------- ------------- -------------
7. Income tax expense (continued)
(c) Deferred tax
The deferred tax in the balance sheet is as follows:
Accelerated Other Total
tax depreciation temporary
Deferred tax liabilities differences
GBP000 GBP000 GBP000
------------------------------------ ------------------ ------------- --------
At 26 July 2020 36,217 6,739 42,956
Previous year movement posted to
the income statement - (2,561) (2,561)
Movement during year posted to the
income statement 142 (116) 26
At 24 January 2021 (unaudited) 36,359 4,062 40,421
------------------------------------ ------------------ ------------- --------
Share Tax losses Interest-rate Total
based & interest swaps
payments capacity
carried
Deferred tax assets forward
GBP000 GBP000 GBP000
---------------------------------------------- ---------- ------------ -------------- --------
At 26 July 2020 818 - 15,617 16,435
Movement during year posted to the
income statement 5 9,317 - 9,322
Movement during year posted to comprehensive
income - - (4,037) (4,037)
Movement during year posted to equity 8 - - 8
---------------------------------------------- ---------- ------------ -------------- --------
At 24 January 2021 (unaudited) 831 9,317 11,580 21,728
---------------------------------------------- ---------- ------------ -------------- --------
The company has recognised deferred tax assets of GBP21.7m
(2020: GBP16.4m), which are expected to offset against future
profits. This includes a deferred tax asset of GBP9.3m (2020:
GBPNil) in respect of UK tax losses and current-year interest
restrictions capable of reactivation in future periods. This is on
the basis that it is probable that profits will arise in the
foreseeable future, enabling the assets to be utilised.
Deferred tax assets and liabilities have been offset as
follows:
2021 2020
GBP000 GBP000
----------------------------------------- --------- -------
Deferred tax liabilities 40,421 42,956
Offset against deferred tax assets (10,148) (818)
------------------------------------------ --------- -------
Deferred tax liability 30,273 42,138
------------------------------------------ --------- -------
Deferred tax assets 21,728 16,435
Offset against deferred tax liabilities (10,148) (818)
------------------------------------------ --------- -------
Deferred tax asset 11,580 15,617
------------------------------------------ --------- -------
As at 24 January 2021, the company had a potential deferred tax
asset of GBP7.4m (2020: GBP4.9m) relating to capital losses and tax
losses in the Republic of Ireland. A deferred tax asset has not
been derecognised, as there is insufficient certainty of
recovery.
On 3 March 2021 the Chancellor confirmed that the UK rate of
corporation tax will increase to 25% from 1 April 2023. Deferred
tax has been calculated at the rate of 19%, being the rate
substantively enacted at the balance sheet date. The overall impact
of the rate change on the deferred tax liability is expected to
increase the net liability by GBP6m.
8. Earnings and free cash flow per share
(a) Weighted average number of shares
Earnings per share are based on the weighted average number of
shares in issue of 120,565,127 (2020: 104,810,288), including those
held in trust in respect of employee share schemes. Earnings per
share, calculated on this basis, are usually referred to as
'diluted', since all of the shares in issue are included.
Accounting standards refer to 'basic earnings' per share - these
exclude those shares held in trust in respect of
employee share schemes.
During a period where a company makes a loss, accounting
standards require that 'dilutive' shares - for the company,
those
held in trust in respect of employee share schemes - not be
included in the earning per share calculation, because they
will
reduce the reported loss per share; consequently, all per-share
measures in the current period are based on the number of
shares in issue less shares held in trust of 119,827,162.
From financial year 2021, the weighted average number of shares
held in trust for employee share schemes has been adjusted to
exclude those shares which are expected to vest, yet remain in
trust.
Weighted average number of shares Unaudited Unaudited Audited
26 weeks 26 weeks 52 weeks
ended ended ended
24 January 26 January 26 July
2021 2020 2020
------------------------------------ ------------ ------------ ------------
Shares in issue 120,565,127 104,810,288 108,550,647
Shares held in trust (737,965) (2,143,674) (1,996,358)
Shares in issue less shares held
in trust 119,827,162 102,666,614 106,554,289
------------------------------------ ------------ ------------ ------------
(b) Earnings per share
26 weeks ended 24 January 2021 Loss Basic EPS Diluted
unaudited EPS
GBP000 pence pence
------------------------------------------- --------- ---------- --------
Earnings (loss after tax) (58,791) (49.1) (49.1)
Exclude effect of exceptional
items after tax 12,421 10.4 10.4
------------------------------------------- ---------
Earnings before exceptional items (46,370) (38.7) (38.7)
Exclude effect of property gains/(losses) 232 0.2 0.2
---------
Underlying earnings before exceptional
items (46,138) (38.5) (38.5)
------------------------------------------- --------- ---------- --------
26 weeks ended 24 January 2021 Loss Basic EPS Diluted
unaudited - Pre IFRS16 EPS
GBP000 pence pence
------------------------------------------- --------- ---------- --------
Earnings (loss after tax) (51,595) (43.1) (43.1)
Exclude effect of exceptional
items after tax 7,933 6.7 6.7
------------------------------------------- ---------
Earnings before exceptional items (43,662) (36.4) (36.4)
Exclude effect of property gains/(losses) 1,320 1.1 1.1
---------
Underlying earnings before exceptional
items (42,342) (35.3) (35.3)
------------------------------------------- --------- ---------- --------
26 weeks ended 26 January 2020 Profit Basic EPS Diluted
unaudited EPS
GBP000 pence pence
------------------------------------------- -------- ---------- --------
Earnings before IFRS 16 31,287 30.5 29.8
Impact of IFRS 16 (5,107) (5.0) (4.8)
------------------------------------------- -------- ---------- --------
Earnings (profit after tax) 26,180 25.5 25.0
Exclude effect of exceptional
items after tax 14,147 13.8 13.5
------------------------------------------- --------
Earnings before exceptional items 40,327 39.3 38.5
Impact of IFRS16 5,107 5.0 4.8
------------------------------------------- -------- ---------- --------
Earnings before exceptional items
and IFRS 16 45,434 44.3 43.3
Exclude effect of property gains/(losses) 172 0.1 0.2
--------
Underlying earnings before exceptional
items 45,606 44.4 43.5
------------------------------------------- -------- ---------- --------
8. Earnings and free cash flow per share (continued)
52 weeks ended 26 July 2020 Loss Basic EPS Diluted
EPS
GBP000 pence pence
------------------------------------------- --------- ---------- --------
Earnings (loss after tax) (97,561) (91.6) (91.6)
Exclude effect of exceptional
items after tax 59,044 55.5 55.5
------------------------------------------- ---------
Earnings before exceptional items (38,517) (36.1) (36.1)
Exclude effect of property gains/(losses) (484) (0.5) (0.5)
---------
Underlying earnings before exceptional
items (39,001) (36.6) (36.6)
------------------------------------------- --------- ---------- --------
(c) Free cash flow per share
The calculation of free cash flow per share is based on the net
cash generated by business activities and available for investment
in new pub developments and extensions to current pubs, after
funding interest, corporation tax, all other reinvestment in pubs
open at the start of the period and the purchase of own shares
under the employee Share Incentive Plan ('free cash flow'). It is
calculated before taking account of proceeds from property
disposals, inflows and outflows of financing from outside sources
and dividend payments. The weighted average number of shares in
issue is defined in the same way as it is for earnings per share
(see note 8a).
Free cash Basic free Diluted
free
flow cash flow cash flow
per share per share
GBP000 pence pence
-------------------------------- ---------- ----------- ----------
26 weeks ended 24 January 2021 (77,306) (64.5) (64.5)
26 weeks ended 26 January 2020 48,966 47.7 46.7
52 weeks ended 26 July 2020 (58,852) (55.2) (55.2)
-------------------------------- ---------- ----------- ----------
(d) Owners' earnings per share
Owners' earnings measure those earnings attributable to
shareholders from current activities adjusted for significant
non-cash items and one-off items. Owners' earnings are calculated
as profit before tax, exceptional items, depreciation and
amortisation and property gains and losses less reinvestment in
current properties and cash tax. Cash tax is defined as the current
year's current tax charge. The weighted average number of shares in
issue is defined in the same way as it is for earnings per share
(see note 8a).
26 weeks ended 24 January 2021 unaudited Owners' Basic Diluted
Earnings Owners' Owners'
EPS EPS
GBP000 pence pence
---------------------------- -------------- --------- -------- --------
Loss before tax and exceptional items
(pre-IFRS 16 income statement) (46,172) (38.5) (38.5)
Exclude depreciation and amortisation
(note 2) 38,719 32.3 32.3
Less reinvestment in current properties
and IT (7,633) (6.3) (6.3)
Exclude property gains and losses
(note 3) 1,320 1.1 1.1
Less cash tax (note 7a) - - -
Owners' earnings (13,766) (13,766) (11.4) (11.4)
----------------------------- -------------- --------- -------- --------
26 weeks ended 26 January 2020 Owners' Basic Diluted
unaudited
Earnings Owners' EPS Owners'
EPS
GBP000 pence pence
----------------------------------------- --------- ------------ --------
Loss before tax and exceptional
items (pre-IFRS 16 income statement) 57,921 56.4 55.3
Exclude depreciation and amortisation
(note 2) 39,677 38.6 37.9
Less reinvestment in current properties
and IT (34,124) (33.2) (32.6)
Exclude property gains and losses
(note 3) 172 0.2 0.2
Less cash tax (note 7a) (12,367) (12.0) (11.8)
Owners' earnings 51,279 50.0 49.0
----------------------------------------- --------- ------------ --------
52 weeks ended 26 July 2020 audited Owners' Basic Diluted
Earnings Owners' EPS Owners'
EPS
GBP000 pence pence
----------------------------------------- --------- ------------ --------
Loss before tax and exceptional
items (pre-IFRS 16 income statement) (34,095) (32.0) (31.4)
Exclude depreciation and amortisation
(note 2) 79,271 74.4 73.0
Less reinvestment in current properties
and IT (32,062) (30.1) (29.5)
Exclude property gains and losses
(note 3) 641 0.6 0.6
Less cash tax (note 7a) 2,827 2.7 2.6
Owners' earnings 16,582 15.6 15.3
----------------------------------------- --------- ------------ --------
Analysis of additions by type Unaudited Unaudited Audited
26 weeks 26 weeks 52 weeks
ended ended ended
24 January 26 January 26 July
2021 2020 2020
------------------------------------ ----------- ----------- ---------
Reinvestment in existing pubs 8,130 34,124 32,062
Investment in new pubs and
pub extensions 7,663 23,679 41,047
Lease premiums 276 - -
Freehold reversions and investment
properties 1,359 70,732 98,463
17,248 128,535 171,572
------------------------------------ ----------- ----------- ---------
Analysis of additions by category Unaudited Unaudited Audited
26 weeks 26 weeks 52 weeks
ended ended ended
24 January 26 January 26 July
2021 2020 2020
------------------------------------ ----------- ----------- ---------
Property, plant and equipment
(note 13) 15,194 121,687 164,450
Intangible assets (note 12) 2,234 773 1,047
Investment properties - 6,075 6,075
17,428 128,535 171,572
------------------------------------ ----------- ----------- ---------
9. Cash used in/generated from operations
Unaudited Unaudited* Unaudited Audited
26 weeks 26 weeks 26 weeks 52 weeks
ended ended ended ended
24 January 24 January 26 January 26 July
2021 2021 2020 2020
GBP000 GBP000 GBP000 GBP000
--------------------------------------- ----------- ----------- ----------- ---------
(Loss)/profit for the period (58,791) (51,595) 26,180 (97,561)
Adjusted for:
Tax (note 7) (9,213) (2,510) 9,497 (7,803)
Share-based charges (note 2) 6,420 6,420 5,543 10,705
Loss/(gain) on disposal of property,
plant and equipment (note 3) 1,268 1,268 2,913 3,771
Disposal of capitalised leases (note
3) (1,088) - (347) (1,125)
Net impairment charge (note 3) 2,133 - 12,326 44,023
Interest receivable (note 6) (167) (167) (41) (161)
Interest payable (note 6) 23,415 23,415 17,786 39,226
Lease interest receivable (note
6) (210) - (225) (451)
Lease interest payable (note 6) 11,015 - 11,078 21,980
Exceptional interest (note 6) 5,511 5,511 - -
Amortisation of bank loan issue
costs (note 6) 860 860 722 1,541
Depreciation of property, plant
and equipment (note 13) 37,014 37,014 37,718 75,386
Amortisation of intangible assets
(note 12) 1,694 1,694 1,925 3,806
Depreciation on investment properties
(note 14) 11 11 34 79
Aborted properties costs 17 10 33 33
Cancelled principal payments (note (7,322) - - -
23)
Amortisation of right-of-use assets
(note 23) 23,042 - 24,425 49,059
--------------------------------------- ----------- ----------- ----------- ---------
35,611 21,931 149,567 142,508
Change in inventories 726 726 264 622
Change in receivables 4,908 2,429 (6,341) (17,052)
Change in payables (69,994) (68,030) 16,546 (50,413)
Cash flow from operating activities (28,749) (42,944) 160,036 75,665
--------------------------------------- ----------- ----------- ----------- ---------
*This column shows the cash generated from operations as it
would have been reported, before the introduction of IFRS 16.
10. Analysis of change in net debt
26 July Cash Non-cash 24 January
2020 flows movement 2021
Restated
GBP000 GBP000 GBP000 GBP000
-------------------------------- ------------ --------- --------- ------------
Borrowings
Cash and cash equivalents 174,451 50,573 - 225,024
Asset-financing creditor
- due before one year (7,610) - - (7,610)
--------------------------------- ------------ --------- --------- ------------
Current net borrowings 166,841 50,573 - 217,414
Bank loans - due after one
year (870,572) (48,096) (836) (919,504)
Asset-financing creditor
- due after one year (15,533) 3,439 - (12,094)
Private placement - due after
one year (97,722) - (23) (97,745)
--------------------------------- ------------ --------- --------- ------------
Non-current net borrowings (983,827) (44,671) (859) (1,029,343)
Net debt (816,986) 5,916 (859) (811,929)
--------------------------------- ------------ --------- --------- ------------
Derivatives
Interest-rate swaps liability
- due after one year (82,194) - 16,717 (65,477)
------------
Total derivatives (82,194) - 16,717 (65,477)
--------------------------------- ------------ --------- --------- ------------
Net debt after derivatives (899,180) 5,902 15,858 (877,420)
--------------------------------- ------------ --------- --------- ------------
Leases
Lease assets - due before
one year 1,736 (655) 610 1,691
Lease assets - due after
one year 11,115 - (609) 10,506
Lease obligations - due before
one year (65,343) 4,007 (11,145) (72,481)
Lease obligations - due after
one year restated (507,803) - (715) (508,518)
Net lease liabilities (560,295) 3,352 (11,859) (568,802)
--------------------------------- ------------ --------- --------- ------------
Net debt after derivatives
and lease liabilities (1,459,475) 9,254 3,899 (1,446,223
--------------------------------- ------------ --------- --------- ------------
The cash movement on bank loans is the addition of a
GBP48,333,332 CLBILS loan offset by associated loan issue
costs.
The cash movement on asset-financing is principal payments of
GBP3,439,000.
Non-cash movements
The non-cash movement in bank loans and the private placement
relate to the amortisation of loan issue costs.
The amortised charge for the half year of GBP860,000 is
disclosed in note 6. These are arrangement fees paid in respect of
new borrowings and are charged to the income statement over the
expected life of the loans.
The movement in interest-rate swaps relates to the change in the
'mark to market' valuations for the year for swaps subject to hedge
accounting.
Non-cash movement in net lease liabilities Unaudited
26 January
2020
GBP000
---------------------------------------------- -----------
Recognition of new leases (note 23c) (12,483)
Remeasurements of existing leases (note 23c) (8,485)
Cancelled principal payments 7,322
Disposals of lease (note 23c) 1,761
Exchange differences (note 23c) 26
Non-cash movement in net lease liabilities (11,859)
------------------------------------------------- -----------
10. Analysis of change in net debt (continued)
The table below calculates a ratio between net debt, being
borrowing less cash and cash equivalents, and earnings before
interest, tax, and depreciation (EBITDA). The numbers in this table
are all before the effect of IFRS 16.
Unaudited Unaudited Audited
26 weeks 26 weeks 52 weeks
ended ended ended
24 January 26 January 26 July
2021 2020 2020
GBP000 GBP000 GBP000
----------------------------------- ----------- ----------- ---------
(Loss)/Profit before tax (income
statement) (46,172) 57,921 (34,095)
Interest (note 6) 24,108 18,467 40,606
Depreciation (note 2) 38,719 39,869 79,639
Earnings before interest, tax and
depreciation (EBITDA) 16,655 116,257 86,150
------------------------------------ ----------- ----------- ---------
Rolling EBITDA
Last full year 86,150 219,327 -
Last half year (116,257) (108,111) -
Earnings before interest, tax and
depreciation (EBITDA) (13,452) 227,473 86,150
------------------------------------ ----------- ----------- ---------
Net debt/EBITDA (60.36) 3.54 9.48
------------------------------------- ----------- ----------- ---------
11. Dividends paid and proposed
Unaudited Unaudited Audited
26 weeks 26 weeks 52 weeks
ended ended ended
24 January 26 January 26 July
2021 2020 2020
GBP000 GBP000 GBP000
------------------------------------ ------------ ----------- ---------
Paid in the period
2019 final dividend - 8,371 8,371
2020 interim dividend - - -
2020 final dividend - - -
- 8,371 8,371
------------------------------------------------- ----------- ---------
Dividends in respect of the period
Interim dividend - - -
Final dividend - - -
- - -
------------------------------------ ------------ ----------- ---------
Dividend per share (p) - - 8
Dividend cover - 3.1 -
------------------------------------ ------------ ----------- ---------
Dividend cover is calculated as profit after tax and exceptional
items over dividend paid. Dividend cover has not been shown for the
prior year, as the company reported a loss.
12. Intangible assets
Computer Assets Total
software under
and
development construction
GBP000 GBP000 GBP000
------------------------------ ------------ ------------- ---------
At 26 January 2020 74,081 1,338 75,419
-------------------------------- ------------ ------------- ---------
Additions 459 (185) 274
Transfers 349 (349) -
Disposals (41,472) - (41,472)
At 26 July 2020 33,417 804 34,221
-------------------------------- ------------ ------------- ---------
Additions 849 1,385 2,234
At 24 January 2021 34,266 2,189 36,455
-------------------------------- ------------ ------------- ---------
Accumulated amortisation and
impairment:
At 26 January 2020 (63,041) - (63,041)
-------------------------------- ------------ ------------- ---------
Provided during the
period (1,881) - (1,881)
Impairment loss (1,159) - (1,159)
Disposals 40,755 - 40,755
At 26 July 2020 (25,326) - (25,326)
-------------------------------- ------------ ------------- ---------
Provided during the
period (1,694) - (1,694)
Disposals / Other (479) - (479)
At 24 January 2021 (27,499) - (27,499)
-------------------------------- ------------ ------------- ---------
Net book amount at
24 January 2021 6,767 2,189 8,956
-------------------------------- ------------ ------------- ---------
Net book amount at
26 July 2020 8,091 804 8,895
-------------------------------- ------------ ------------- ---------
Net book amount at
26 January 2020 11,040 1,338 12,378
-------------------------------- ------------ ------------- ---------
The majority of intangible assets relates to computer software
and software development. Examples include the development costs of
our SAP accounting system, our Wisdom property-maintenance system
and the Wetherspoon app.
13. Property, plant and equipment
Freehold Short- Equipment, Assets Total
and
long-leasehold leasehold fixtures under
property property and fittings construction
GBP000 GBP000 GBP000 GBP000 GBP000
-------------------------- --------------- ---------- ------------- ------------- ----------
Cost:
At 28 July 2019 1,229,172 327,159 656,261 69,051 2,281,643
--------------------------- --------------- ---------- ------------- ------------- ----------
Additions 64,215 480 15,650 41,342 121,687
Transfers 18,826 636 5,963 (25,425) -
Exchange differences (1,426) (148) (424) (1,608) (3,606)
Transfer to held
for sale (1,335) - (458) - (1,793)
Disposals (4,677) (3,828) (4,492) - (12,997)
Reclassification 24,914 (24,914) - - -
At 26 January 2020 1,329,689 299,385 672,500 83,360 2,384,934
--------------------------- --------------- ---------- ------------- ------------- ----------
Additions 33,204 1,984 8,958 (1,383) 42,763
Transfers (7,022) 1,039 3,449 2,534 -
Exchange differences 2,111 187 544 2,113 4,955
Transfer to held
for sale 1,335 - 458 - 1,793
Disposals (1,335) (2,462) (1,177) - (4,974)
Reclassification 5,124 (5,124) - - -
At 26 July 2020 1,363,106 295,009 684,732 86,624 2,429,471
--------------------------- --------------- ---------- ------------- ------------- ----------
Additions 4,356 - 3,434 7,404 15,194
Transfers 3,964 901 1,321 (6,186) -
Exchange differences (58) (5) (13) (61) (137)
Disposals - (1,878) (1,262) - (3,140)
Reclassification 676 (676) - - -
Movement from investment
property 5,768 - - - 5,768
At 24 January 2021 1,377,812 293,351 688,212 87,781 2,447,156
--------------------------- --------------- ---------- ------------- ------------- ----------
Accumulated depreciation
and impairment:
At 28 July 2019 (253,825) (176,452) (466,395) - (896,672)
----------------------------- ---------- ---------- ---------- ------- ------------
Provided during the period (9,697) (5,501) (22,520) - (37,718)
Exchange differences 122 (40) 178 - 260
Impairment loss (495) (682) (1,609) - (2,786)
Transfer to held for sale 1,028 - 415 - 1,443
Disposals 1,030 3,841 4,199 - 9,070
Reclassification (14,860) 14,860 - - -
-----------------------------
At 26 January 2020 (276,697) (163,974) (485,732) - (926,403)
----------------------------- ---------- ---------- ---------- ------- ------------
Provided during the period (9,978) (5,325) (22,365) - (37,668)
Exchange differences (169) (37) (340) - (546)
Impairment loss (17,136) (3,440) (5,240) - (25,816)
Transfer to held for sale (1,028) - (415) - (1,443)
Disposals 1,021 2,457 1,705 - 5,183
Reclassification (3,310) 3,310 - - -
-----------------------------
At 26 July 2020 (307,297) (167,009) (512,387) - (986,693)
----------------------------- ---------- ---------- ---------- ------- ------------
Provided during the period (9,585) (5,688) (21,741) - (37,014)
Exchange differences - - - - -
Disposals - 1,325 1,086 - 2,411
Reclassification 419 (419) - - -
Movement from investment
property (290) - - - (290)
At 24 January 2021 (316,753) (171,791) (533,042) - (1,021,586)
----------------------------- ---------- ---------- ---------- ------- ------------
Net book amount at 24
January 2021 1,061,060 121,559 155,169 87,781 1,425,570
----------------------------- ---------- ---------- ---------- ------- ------------
Net book amount at 26
July 2020 1,055,809 128,000 172,345 86,624 1,442,778
----------------------------- ---------- ---------- ---------- ------- ------------
Net book amount at 26
January 2020 1,052,992 135,411 186,768 83,360 1,458,531
----------------------------- ---------- ---------- ---------- ------- ------------
Net book amount at 28
July 2019 975,347 150,707 189,866 69,051 1,384,971
----------------------------- ---------- ---------- ---------- ------- ------------
13. Property, plant and equipment (continued)
Impairment of property, plant and equipment
In assessing whether a pub has been impaired, the book value of
the pub is compared with its anticipated future cash flows and fair
value. Assumptions are used about sales, costs and profit, using a
pre-tax discount rate for future years of 7% (2020: 7%).
If the value, based on the higher of future anticipated cash
flows and fair value, is lower than the book value, the
difference
is written off as property impairment.
As a result of this exercise, no impairment was charged at the
half year.
14. Investment property
The company owns two (2020: three) freehold properties with
existing tenants - and these assets have been classified
as investment properties. During the year, the company developed
one of its investment properties into a pub.
The property has been transferred to property, plant and
equipment.
GBP000
------------------------------------------ --------
Cost:
At 26 January 2020 11,842
---------------------------------------------- --------
At 26 July 2020 11,842
---------------------------------------------- --------
Transfer to property,
plant and equipment (5,768)
At 24 January 2021 6,074
---------------------------------------------- --------
Accumulated depreciation and impairment:
At 28 July 2019 (236)
---------------------------------------------- --------
Provided during the period (34)
At 26 January 2020 (270)
---------------------------------------------- --------
Provided during the period (45)
At 26 July 2020 (315)
---------------------------------------------- --------
Provided during the period (12)
Transfer to property,
plant and equipment 290
At 24 January 2021 (37)
---------------------------------------------- --------
Net book amount at 24
January 2021 6,037
---------------------------------------------- --------
Net book amount at 26
July 2020 11,527
---------------------------------------------- --------
Net book amount at 26
January 2020 11,572
---------------------------------------------- --------
Net book amount at 28
July 2019 5,531
---------------------------------------------- --------
Rental income received in the period from investment properties
was GBP161,250 (2020: GBP 326,000 ).
Operating costs, excluding depreciation, incurred in relation to
these properties amounted to GBP2 ,000 (2020: GBP 2,000 ).
In the opinion of the directors, the fair value of the
investment property is approximately equal to its book value.
15. Inventories
Bar, food and non-consumable stock held at our pubs and national
distribution centre.
Unaudited Unaudited Audited
24 January 26 January 26
July
2021 2020 2020
GBP000 GBP000 GBP000
------------------ ----------- ----------- --------
Goods for resale
at cost 22,369 23,453 23,095
----------------------- ----------- ----------- --------
16. Receivables
This category relates to situations in which third parties owe
the company money. Examples include rebates from suppliers
and overpayments of certain taxes.
Prepayments relate to payments which have been made in respect
of liabilities after the period's end.
Unaudited Unaudited Audited
24 January 26 January 26
July
2021 2020 2020
GBP000 GBP000 GBP000
------------------- ----------- ----------- --------
Other receivables 1,015 1,810 974
Accrued income 440 1,777 737
Prepayment 25,813 18,804 30,465
27,268 22,391 32,176
------------------- ----------- ----------- --------
Accrued income relates to discounts which are calculated based
on certain products delivered at an agreed rate per item.
Included in prepayments is GBP16.5m in government grants
receivable under the coronavirus job retention scheme.
Credit risk Unaudited Unaudited Audited
24 January 26 January 26
July
2021 2020 2020
GBP000 GBP000 GBP000
-------------------- ----------- ----------- --------
Due from suppliers
- not due 883 1,451 -
Due from suppliers
- overdue 132 359 974
------------------------- ----------- ----------- --------
1,015 1,810 974
-------------------- ----------- ----------- --------
Credit risk is the risk that a counterparty does not settle its
financial obligation with the company. At the period's end, the
company has assessed the credit risk on amounts due from suppliers,
based on historic experience, meaning that the expected lifetime
credit loss was immaterial. Cash and cash equivalents are also
subject to the impairment requirements of IFRS 9 - the identified
impairment loss was immaterial.
17. Assets held for sale
These relate to situations in which the company has exchanged
contracts to sell a property, but the transaction is not yet
complete. As at 24 January 2021, no sites were classified as held
for sale (2020: one).
Unaudited Unaudited Audited
24 January 26 January 26 July
2021 2020 2020
GBP000 GBP000 GBP000
---------------- ----------- ----------- --------
Property, plant - 350 -
and equipment
---------------- ----------- ----------- --------
18. Cash and cash equivalents
Unaudited Unaudited Audited
24 January 26 January 26 July
2021 2020 2020
GBP000 GBP000 GBP000
--------------------------- ----------- ----------- --------
Cash and cash equivalents 225,024 47,413 174,451
------------------------------- ----------- ----------- --------
Cash at bank earns interest at floating rates, based on daily
bank deposit rates.
19. Trade and other payables
This category relates to money owed by the company to third
parties.
Accruals refer to allowances made by the company for future
anticipated payments to suppliers and other creditors.
Unaudited Unaudited Audited
24 January 26 January 26 July
2021 2020 2020
GBP000 GBP000 GBP000
------------------------------------ ----------- ----------- --------
Trade payables 67,406 165,309 104,145
Other payables 16,835 27,362 27,260
Other tax and social security 48,502 55,398 54,135
Accruals and deferred income 51,999 67,704 69,545
184,742 315,773 255,085
------------------------------------ ----------- ----------- --------
20. Borrowings
Unaudited Unaudited Audited
24 January 26 January 26 July
2021 2020 2020
GBP000 GBP000 GBP000
------------------------------- ----------- ----------- --------
Current (due within
one year)
Other
Asset-financing 7,610 3,286 7,610
------------------------------------ ----------- ----------- --------
Total current
borrowings 7,610 3,286 7,610
------------------------------------ ----------- ----------- --------
Non-current (due after
one year)
Bank loans
Variable-rate
facility 875,000 750,000 875,000
CLBILS 48,333 - -
Unamortised bank loan
issue costs (3,829) (4,222) (4,428)
-------------------------------- ----------- ----------- --------
919,504 745,778 870,572
Private placement
Fixed-rate facility 98,000 98,000 98,000
Unamortised private placement
issue costs (255) (301) (278)
--------------------------------- ----------- ----------- --------
97,745 97,699 97,722
Other
Asset-financing 12,094 5,177 15,534
-----------
Total non-current
borrowings 1,029,343 848,654 983,828
-------------------------------- ----------- ----------- --------
Total borrowings 1,036,953 851,940 991,438
------------------------------------ ----------- ----------- --------
The coronavirus large business interruption loan scheme (CLBILS)
was agreed on by the company on 7 August 2020.
21. Provisions
Legal
claims
GBP000
----------------------- --------
As at 26 July
2020 3,038
Charged to the income
statement:
- Additional charges 1,724
- Unused amounts
reversed (1,096)
- Used during
year (869)
At 24 January
2021 2,797
--------------------------- --------
Legal claims
The amounts represent a provision for ongoing legal claims
brought against the company in the normal course of business by
customers and employees. Owing to the nature of the business, we
expect to have a continuous provision for outstanding
employee and public liability claims. All claim provisions are
considered current and are not, therefore, discounted to take into
account the passage of time.
22. Financial instruments
The table below analyses the company's financial liabilities in
relevant maturity groupings, based on the remaining period
at the balance sheet date to the contractual maturity date. The
amounts disclosed in the table are the contractual undiscounted
cash flows.
Maturity profile of financial liabilities
Within More
than
1 year 1-2 2-3 3-4 4-5 years 5 years Total
years years years
GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
----------------------------- -------- ------- ------- ------- ---------- -------- --------
At 24 January 2021
(unaudited)
Bank loans 21,547 21,547 21,547 42,248 855,637 - 962,526
Bank loans - CLBILS 920 920 48,841 - - - 50,681
Private placement 3,655 3,655 3,655 3,656 3,656 101,655 119,932
Trade and other payables 139,170 - - - - - 139,170
Derivatives 15,381 12,189 10,315 8,428 8,292 31,096 85,701
Lease liabilities 72,481 54,150 53,329 52,653 49,564 478,722 760,899
Asset-financing obligations 7,610 6,788 4,317 2,154 - - 20,869
----------------------------- -------- ------- ------- ------- ---------- -------- --------
Within More
than
1 year 1-2 2-3 3-4 4-5 years 5 years Total
years years years
GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
----------------------------- -------- ------- ------- -------- ---------- -------- --------
At 26 July 2020
Bank loans 21,809 17,013 17,013 177,340 723,693 - 956,868
Private placement 3,288 2,920 2,920 2,920 2,920 102,381 117,349
Trade and other payables 200,950 - - - - - 200,950
Derivatives 18,171 12,044 11,959 8,280 8,061 34,381 92,896
Lease liabilities
(restated) 66,043 53,245 52,516 51,844 50,313 482,506 756,467
Asset-financing obligations 7,610 7,610 5,145 4,324 - - 24,689
----------------------------- -------- ------- ------- -------- ---------- -------- --------
The lease liabilities restated for 26 July 2020 reflect the
recalculation of a lease liability.
22. Financial instruments (continued)
On 20 January 2021, the company agreed on a one-year extension
for a further GBP140m of its existing bank loans, having previously
agreed on an extension of GBP715m in January 2020.
On 7 August 2020, the company agreed a three-year secured loan
under the coronavirus large business interruption loan scheme
(CLBILS) for GBP48,333,332.
At the balance sheet date, the company had loan facilities of
GBP1,041m (2020: GBP993m) as detailed below:
n Secured revolving-loan facility of GBP875m
o GBP20m matures February 2024
o GBP855m February 2025
o 14 participating lenders
n Sale of senior secured notes GBP98m
o Matures August 2026
o Five participating lenders
n CLBILS secured loan of GBP48m
o Matures August 2023
o Three participating lenders
n Overdraft facility of GBP20m
The company has hedged its interest-rate liabilities to its
banks by swapping the floating-rate debt into fixed-rate debt
which
has fixed GBP770m of these borrowings at rates of 0.61-3.84%.
The effective weighted average interest rate of the swap agreements
used during the year is 2.42% (2020: 2.82%), fixed for a weighted
average period of 3.6 years (2020: 4.6 years).
In addition, the company has entered into forward-starting
interest-rate swaps as detailed in the table below.
Weighted average by swap period:
From To Total swap Weighted average
value GBPm interest %
----------- ----------- ------------ -----------------
2/7/2018 29/7/2021 770 2.42
30/7/2021 30/7/2023 770 1.61
31/7/2023 30/7/2026 770 1.10
31/7/2026 30/6/2028 770 1.33
1/7/2028 29/3/2029 770 1.32
----------- ------------ ------------ -----------------
At the balance sheet date, GBP875m (2020: GBP750m) was drawn
down under the GBP875m secured-term revolving-loan facility. The
amounts drawn under this agreement can be varied, depending on the
requirements of the business. It is expected that the draw-down
required by the company will not drop below GBP770m for the
duration of the interest-rate swaps detailed above.
Capital risk management
The company's capital structure comprises shareholders' equity
and loans. The objective of capital management
is to ensure that the company is able to continue as a going
concern and provide shareholders with returns on
their investment, while managing risk.
The company does not have a specific measure for managing
capital structure; instead, the company plans its capital
requirements and manages its loans, dividends and share buybacks
accordingly. In a normal trading year, the company measures loans
using a net debt to EBITDA ratio which was 3.54 times in 2020. With
covenant waivers agreed, management's primary metric is
liquidity.
Financial risks associated with financial instruments, including
credit risk and liquidity risk, are discussed in the
annual report 2020 in the section 2, page 65.
Fair value of financial assets and liabilities
IFRS 13 requires disclosure of fair value measurements by level,
using the following fair value measurement hierarchy:
n Quoted prices in active markets for identical assets or
liabilities (level 1)
n Inputs other than quoted prices included in level 1 which are
observable for the asset or liability,
either directly or indirectly (level 2)
n Inputs for the asset or liability which are not based on
observable market data (level 3)
The fair value of the interest-rate swaps is considered to be
level 2. All other financial assets and liabilities
are measured in the balance sheet at amortised cost, with their
valuation also considered to be level 2.
Interest-rate and currency risks of financial liabilities
An analysis of the interest-rate profile of financial
liabilities, after taking account of all interest-rate swaps,
is set out in the following table.
22. Financial instruments (continued)
Interest-rate and currency
risks of financial liabilities
Unaudited Unaudited Audited
24 January 26 January 26 July
2021 2020 2020
GBP000 GBP000 GBP000
-------------------------------------- ----------- ----------- --------
Analysis of interest-rate profile of
financial liabilities
Floating rate due after
one year 101,171 - 100,572
Fixed rate due after one
year 818,333 745,778 770,000
------------------------------------------ ----------- --------
919,504 745,778 870,572
Asset-financing obligations
Fixed rate due in one year 7,610 3,286 7,610
Fixed rate due after one
year 12,094 5,177 15,534
19,704 8,463 23,144
Private placement
Fixed rate due after one
year 97,745 97,699 97,722
------------------------------------------ ----------- ----------- --------
97,745 97,699 97,722
1,036,953 851,940 991,438
-------------------------------------- ----------- ----------- --------
The floating-rate borrowings are interest-bearing borrowings at
rates based on LIBOR, fixed for periods of up to one month.
The fixed-rate loan is the element of the company's borrowings
which has been fixed with interest-rate swaps.
Fair values
In some cases, payments which are due to be made in the future
by the company or due to be received by the company
have to be given a fair value. The table below highlights any
differences between book value and fair value of financial
instruments.
Unaudited Unaudited Unaudited Unaudited Audited Audited
Restated Restated Restated Restated
24 January 24 January 26 January 26 January 26 July 26 July
2021 2021 2020 2020 2020 2020
Book Fair Book Fair Book Fair
value value value value value value
GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
----------------------------- ------------ ------------ ------------ ------------ ------------ ------------
Financial assets at
amortised cost
Cash and cash equivalents 225,024 225,024 47,413 47,413 174,451 174,451
Receivables 1,015 1,015 1,810 1,810 974 974
Lease assets 12,197 12,185 12,880 12,955 12,851 12,939
----------------------------- ------------ ------------ ------------ ------------ ------------ ------------
238,236 238,224 62,103 62,178 188,276 188,364
Financial liabilities
at amortised cost
Trade and other payables (136,240) (136,240) (260,375) (260,375) (200,950) (200,950)
Asset-financing obligations (19,704) (19,712) (8,463) (8,478) (23,144) (23,485)
Lease obligations (580,999) (593,892) (596,825) (606,018) (573,146) (578,456)
Private placement (97,745) (99,358) (97,699) (99,457) (97,722) (99,171)
Borrowings (919,504) (928,699) (745,778) (746,554) (870,572) (879,088)
----------------------------- ------------ ------------ ------------ ------------ ------------ ------------
(1,754,192) (1,777,901) (1,709,140) (1,720,882) (1,765,534) (1,781,150)
Derivatives - cash
flow hedges
Non-current derivative
financial liability (65,477) (65,477) (57,096) (57,096) (82,194) (82,194)
-----------------------------
(65,477) (65,477) (57,096) (57,096) (82,194) (82,194)
----------------------------- ------------ ------------ ------------ ------------ ------------ ------------
The lease obligations restated for 26 January 2020 and 26 July
2020 reflect the recalculation of a lease.
22. Financial instruments (continued)
The fair value of derivatives has been calculated by discounting
all future cash flows by the market yield curve at the balance
sheet date. The fair value of borrowings has been calculated by
discounting the expected future cash flows at the year end's
prevailing interest rates.
Obligations under asset-financing
The minimum lease payments under asset-financing fall due as
follows:
Unaudited Unaudited Audited
24 January 26 January 26 July
2021 2020 2020
GBP000 GBP000 GBP000
------------------------------------- ----------- ----------- --------
Within one year 7,610 3,286 7,610
In the second to fifth
year, inclusive 13,244 5,751 17,079
--------
20,854 9,037 24,689
Less future finance
charges (1,150) (574) (1,545)
----------- ----------- --------
Present value of lease
obligations 19,704 8,463 23,144
Less amount due for settlement
within one year (7,610) (3,286) (7,610)
----------- ----------- --------
Amount due for settlement during
the second to fifth year, inclusive 12,094 5,177 15,534
----------- ----------- --------
All asset-financing obligations are in respect of various
equipment used in the business. No escalation clauses are
included
in the agreements.
22. Financial instruments (continued)
Interest-rate swaps
At 24 January 2021, the company had fixed-rate swaps designated
as hedges of floating-rate borrowings.
The floating-rate borrowings are interest-bearing borrowings at
rates based on LIBOR, fixed for periods of up to one month.
Loss/(gain) Deferred Charged
on
interest-rate tax to equity
swaps
GBP000 GBP000 GBP000
As at 26 January 2020 57,096 (9,706) 47,390
Change in fair value posted to comprehensive
income 25,098 - 25,098
Deferred tax posted to comprehensive
income - (5,911) (5,911)
As at 26 July 2020 82,194 (15,617) 66,577
Change in fair value posted to comprehensive
income (16,717) - (16,717)
Hedge ineffectiveness - - (4,528)
Deferred tax posted to comprehensive
income - 4,037 4,037
As at 24 January 2021 65,477 (11,580) 49,369
The company adopts hedge accounting, meaning that the effective
portion of changes in the fair value of derivatives is recognised
in comprehensive income, with any gain or loss relating to an
ineffective portion accounted for in the income statement. A change
in fair value of GBP4,528,000 has been recognised in the income
statement for hedge ineffectiveness
Interest-rate hedges
The company's interest-rate swap agreements are in place as
protection against future changes in borrowing costs.
Under these agreements, the company pays a fixed interest charge
and receives variable interest income which matches
the variable interest payments made on the company's
borrowings.
There is an economic relationship among the company's
revolving-loan facility, the hedged item and the company's
interest-rate swaps, the hedging instruments, where the company
pays a floating interest charge on the loan and receives a
floating
interest-rate credit on the interest-rate swap. The
interest-rate swap agreement allows the company to receive a
floating interest-rate credit and requires the company to pay an
agreed fixed interest charge.
The company has established a hedging ratio of 1:1 between the
interest-rate swaps and the company's floating-rate borrowings,
meaning that floating interest rates paid should be identical to
those amounts received for a given amount
of borrowings.
These hedges could be ineffective if the:
n period over which the borrowings were drawn were changed. This
could result in the borrowings
being made at a different floating rate than the interest-rate
swap.
n gross amount of borrowings were less than the value
swapped.
n impact of LIBOR reform were to cause a mismatch between the
interest rate of the swaps and
that of the company's debt.
The company tests hedge effectiveness prospectively using the
hypothetical derivative method and compares the changes
in the fair value of the hedging instrument with those in the
fair value of the hedged item attributable to the hedged risk.
Interest-rate sensitivity
During the 26 weeks ended 24 January 2021, if the interest rates
on UK-denominated borrowings had been 1% higher, with all other
variables constant, pre-tax profit for the year would have been
reduced by GBP524,000 and equity increased by GBP62,092,000. The
movement in equity arises from a change in the 'mark to market'
valuation of the interest-rate swaps into which the company has
entered, calculated by a 1% shift of the market yield curve. The
company considers that a 1% movement in interest rates represents a
reasonable sensitivity to potential changes. However, this analysis
is for illustrative purposes only.
23. Leases
About 36% of the company's pubs are leasehold. New leases are
normally for 30 years, with a break clause after 15 years. Most
leases have upwards-only rent reviews, based on open-market rental
at the time of review, but most new pub leases
have an uplift in rent which is fixed at the start of the
lease.
(a) Right-of-use assets
The table below shows the movements in the company's
right-of-use assets.
GBP000
---------------------------
Cost
As at 26 July
2020 562,793
Restatement 18,819
--------------------------------------
As at 26 July
2020 restated 581,612
Additions 12,483
Remeasurement 2,116
Exchange differences 10
Disposals and derecognised
leases (1,815)
At 24 January 2021
(unaudited) 594,406
Accumulated depreciation
and impairment:
At 26 July 2020 (48,624)
Restatement (404)
--------------------------------------
As at July 2020
restated (49,028)
Provided during
the period (23,042)
Exchange differences 8
Impairment loss (2,134)
Remeasurement 7,281
Disposals and derecognised
leases 123
At 24 January 2021
(unaudited) (66,792)
Net book amount at
24 January 2021 527,614
Net book amount at 26 July
2020 restated 532,584
During the period, 17 leases were remeasured as a result of
changes in the agreed payments under the lease contracts and
changes in the lease terms.
Disposals and derecognised leases in the period represent the
purchasing of one formerly leasehold property.
The July-2020 position has been restated to reflect a
recalculation of lease assets. See note 31 for further details.
23. Leases (continued)
(b) Lease maturity profile
The tables below analyse the company's lease liabilities and
assets in relevant maturity groupings, based on the remaining
period at the balance sheet date to the end of the lease. The
amounts disclosed in the table are the contractual undiscounted
cash flows. The impact of discounting reconciles these amounts to
the values disclosed in the balance sheet.
Lease liabilities Unaudited Audited
Restated
2021 2020
GBP000 GBP000
Within one year 72,481 66,043
Between one and
two years 54,150 53,245
Between two and
three years 53,329 52,516
Between three and
four years 52,653 51,844
Between four and
five years 49,564 50,313
After five years 478,722 482,185
Lease commitments
payable 760,899 756,146
Discounting lease
liability (179,900) (183,000)
Lease liability 580,999 573,146
Lease assets Unaudited Audited
2021 2020
GBP000 GBP000
Within one year 1,691 1,736
Between one and
two years 1,604 1,638
Between two and
three years 1,360 1,586
Between three and
four years 1,114 1,130
Between four and
five years 1,070 1,084
After five years 7,790 8,325
14,629 15,499
Discounting lease
asset (2,432) (2,648)
Lease asset 12,197 12,851
The comparative numbers disclosed above are those included in
the 2020 annual report.
23. Leases (continued)
(c) Lease liability
The tables below show the movements in the period of the lease
liability and the lease asset.
Lease liability Unaudited
2020
GBP000
----------------------
At 26 July 2020 554,731
Restatement of
lease liability 18,416
---------------------------
As at 26 July
2020 restated 573,147
Additions 12,483
Remeasurements
of leases 8,485
Cancelled principal
payments (7,322)
Disposals (1,761)
Exchange differences (26)
Lease liabilities
before payments 585,006
Interest due 9,478
Payments made (13,485)
Net principal
repayments (4,007)
---------------------------
At 24 January
2021 580,999
---------------------------
The company has applied the practical expedient in the May-2020
amendment to IFRS 16 - an amendment which
allows reductions in rent payments made before June 2021 to be
credited to the profit and loss account, rather than requiring
the remeasuring of the lease and spreading rent reduction
received in this period over the term of the lease. The application
of this amendment results in principal payments of GBP8,019,000
being credited to the profit and loss account and a reduction in
associated interest charges of GBP1,532,000, resulting in a total
credit to the profit and loss account of GBP8,854,000. Future
rental payments, up to the end of the lease, are capitalised,
including any agreed increases.
Future rent payments could change as a result of open-market
rent reviews or options being exercised to terminate a lease early.
Any changes in the minimum unavoidable lease payments will be
included as a remeasurement of the lease liability.
Leases with lease terms of under one year are not
capitalised.
Lease assets Unaudited
2020
GBP000
----------------------
At 26 July 2020 12,851
Exchange differences 1
Lease assets before
payments 12,852
--------------------------- ---------
Interest due 214
Payments received (869)
Net principal
repayments (655)
--------------------------- ---------
At 24 January
2021 12,197
--------------------------- ---------
The company has sublet several of its leases which have been
capitalised above, with lease assets being the capitalised
future rent receivables from sublet sites. The company monitors
the receipts of rental charges on sublet sites and will take
the
appropriate steps where any amounts remain unpaid. It is the
company's view that there are no significant credit losses on
the sublease assets. The interest payable and receivable shown
in the tables above is the interest element of the payments made
and received in the period. These amounts differ from the lease
interest charged/credited to the income statement in the period -
see note 6. The amounts charged/credited to the income statement in
the period will also include amounts due, but not paid, in the
period. The incremental borrowing rate applied to lease liabilities
and assets was 2.7-3.9%, depending on the lease's length.
Transition: On 29 July 2019, the company adopted the standard
using the modified retrospective approach.
For the full details of transition, please see pages 49-51 of
the annual report for 2020.
24. Capital commitments
At 24 January 2021, the company had GBP 5.0 m (July 2020: GBP
7.1 m) of capital commitments, relating to the purchase of
six (July 2020: eight) sites, for which no provision had been
made in respect of property, plant and equipment.
The company had some other sites in the property pipeline;
however, any legal commitment is contingent on planning
and licensing. Therefore, there are no commitments at the
balance sheet date.
25. Related-party disclosures
J D Wetherspoon is the owner of the share capital of the
following companies:
Company name Country of incorporation Ownership Status
J D Wetherspoon (Scot) Limited Scotland Wholly owned Dormant
J D Wetherspoon Property Holdings Limited England Wholly owned Dormant
Moon and Spoon Limited England Wholly owned Dormant
Moon and Stars Limited England Wholly owned Dormant
Moon on the Hill Limited England Wholly owned Dormant
Moorsom & Co Limited England Wholly owned Dormant
Sylvan Moon Limited England Wholly owned Dormant
Checkline House (Head Lease) Limited Wales Wholly owned Dormant
Project Lima Ltd. Jersey Wholly owned Live
All of these companies are dormant and contain no assets or
liabilities and are, therefore, immaterial. As a result,
consolidated accounts have not been produced. The company has an
overseas branch in the Republic of Ireland.
26. Share capital
Number
of Share
shares capital
000s GBP000
Balance at 28 July 2019 (audited) 105,098 2,102
Repurchase of shares (420) (8)
Balance at 26 January 2020 (unaudited) 104,678 2,094
Repurchase of shares - -
Issue of shares 15,702 314
Balance at 26 July 2020 (audited) 120,380 2,408
Issue of shares 8,370 167
Balance at 24 January 2021 (unaudited) 128,750 2,575
The total authorised number of 2p ordinary shares is 500,000,000
(2020: 500,000,000). All issued shares are fully paid.
On 20 January 2021, 8,370,000 shares were issued by the company,
representing 6.95% of the issued share
capital, at a value of GBP93.7m, before fees, representing an
average cost per share of 1,120p.
While the memorandum and articles of association allow for
preferred, deferred or special rights to attach
to ordinary shares, no shares carried such rights at the balance
sheet date.
27. Events after the balance sheet date
Following the prime minister's announcement of the 'road map'
for the easing of lockdown restrictions, J D Wetherspoon announced
that it will be opening beer gardens, roof-top gardens and patios
at 394 of its pubs in England from 12 April 2021.
On 18 March 2021, the company agreed on a two year five months
secured loan, under the coronavirus large business interruption
loan scheme, for GBP51,700,000
28. General information
J D Wetherspoon plc is a public limited company, incorporated
and domiciled in England and Wales.
Its registered office address is: Wetherspoon House, Central
Park, Reeds Crescent, Watford, WD24 4QL
The company is listed on the London Stock Exchange.
This condensed half-yearly financial information was approved
for issue by the board on 19 March 2021.
This interim report does not comprise statutory accounts within
the meaning of sections 434 and 435 of the Companies Act 2006.
Statutory accounts for the year ended 27 July 2020 were approved by
the board of directors on 16 October 2020 and delivered to the
Registrar of Companies. The report of the auditors on those
accounts was unqualified, did not contain an emphasis-of-matter
paragraph or any statement under sections 498-502 of the Companies
Act 2006.
There are no changes to the principal risks and uncertainties as
set out in the financial statements for the 52 weeks ended
26 July 2020 which may affect the company's performance in the
next 26 weeks. The most significant risks and uncertainties relate
to widespread pub closures, the taxation on, and regulation of, the
sale of alcohol, cost increases and UK disposable consumer incomes.
For a detailed discussion of the risks and uncertainties facing the
company, refer to pages 64-65 of the annual report for 2020.
29. Basis of preparation
This condensed half-yearly financial information of J D
Wetherspoon plc (the 'Company'), which is abridged and unaudited,
has been prepared in accordance with the Disclosure and
Transparency Rules of the Financial Services Authority and with
International Accounting Standards (IAS) 34, Interim Financial
Reporting, in conformity with the requirements of the Companies Act
2006. This interim report should be read in conjunction with the
annual financial statements for the 52 weeks ended
26 July 2020 which were prepared in accordance with IFRSs as
adopted by the European Union.
The directors have made enquiries into the adequacy of the
Company's financial resources, through a review of the Company's
budget and medium-term financial plan, including capital
expenditure plans and cash flow forecasts. All of the Company's
pubs are currently closed, with revenue at zero.
The Company has modelled a range of scenarios in which sales
recover to pre-COVID levels gradually over the
next 12-18 months. These scenarios consider a range of pub
reopening dates and sales performance.
The directors are satisfied that the Company has sufficient
liquidity to withstand all of the scenarios considered. The length
of the liquidity period, in relation to each outcome, depends on
those actions which the Company chooses to take (eg the extent to
which cash expenditure is reduced) and also the level of government
financial support (eg reduced business rates) which the Company
might receive.
In addition, the directors have noted the range of possible
additional liquidity options available to the Company, should
they
be required.
Material uncertainty, which may cast significant doubt over the
Company's ability to trade as a going concern, has resulted from
the impact of the COVID-19 pandemic on the economy and the
hospitality industry. It is unclear when operating restrictions,
such as social distancing measures and reduced pub opening times,
will be removed, allowing trade to return to 'normal'
pre-COVID levels, once pubs have reopened.
The Company has agreed with its lenders to replace existing
financial covenant tests with a minimum liquidity covenant for the
period up to and including July 2021. There is material uncertainty
beyond this date about whether financial covenant tests will be
satisfied or whether further waivers will be agreed on by lenders.
The Company will remain in regular dialogue with its lenders
throughout the period.
As a result, the directors have satisfied themselves that the
Company will continue in operational existence for the foreseeable
future. For this reason, the Company continues to adopt the
going-concern basis in preparing its financial statements.
The financial information for the 52 weeks ended 26 July 2020 is
extracted from the statutory accounts of the Company
for that year.
The interim results for the 26 weeks ended 24 January 2021 and
the comparatives for 26 January 2020 are unaudited,
yet have been reviewed by the independent auditor..
30. Accounting policies
The accounting policies adopted in the preparation of the
interim report are consistent with those applied in the preparation
of the Company's annual report for the year ended 26 July 2020,
with the same methods of computation and presentation used.
Income tax
Taxes on income in the interim periods are accrued using the tax
rate which would be applicable to expected total
annual earnings.
31. Disclosure of prior period errors
In the period, it was identified that two restatements should be
made.
First, the share placement funds (net of fees) have been
reclassified as other reserves. This affects the balance sheet
(including the pre IFRS 16 balance sheet) and the SOCIE. GBP137.7m
has been reclassified from the share premium account to other
reserves and retained earnings (both of which are deemed
distributable).
Secondly, there was an error in the calculation of a lease asset
and liability affecting the numbers reported for the 26 January
2020 and 26 July 2020. The asset and liability had previously been
understated by GBP18.4m. As a result, the balance sheet has been
restated, the P&L has not been restated as the impact is not
material and the following notes have been restated:
-- Note 10: Analysis of change in net debt:
o Line: Lease obligations - due after one year
-- Note 22: Financial instruments
o Lines: Lease liabilities and the fair values table
-- Note 23: Leases
(a) Right-of-use assets
(b) Lease maturity profile
(c) Lease liability
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IR MZGMFGLKGMZG
(END) Dow Jones Newswires
March 19, 2021 03:00 ET (07:00 GMT)
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