JD Wetherspoon (LSE: JDW) announced on Friday a strong performance for the financial year ended July 28, revealing a significant rebound in sales despite operating fewer pubs compared to pre-pandemic levels.
The pub and hotel operator reported a 33% drop in pretax profit, landing at £60.6 million, down from £90.5 million the previous year. However, adjusted pretax profit soared by 74% to £73.9 million, a marked improvement from £42.6 million.
This increase in adjusted profit excludes finance income linked to interest-rate swaps, which decreased to £16.1 million from £97.7 million a year prior. Revenue also saw a healthy rise, up 5.7% to £2.04 billion, compared to £1.93 billion last year, while operating costs increased moderately by 4.4%, from £1.8 million to £1.9 million.
Notably, the number of Wetherspoon pubs has declined to 800, down from 879 at the end of the financial year 2019. The company has proposed a full-year dividend of 12.0 pence per share, a welcome return after not declaring dividends last year.
Looking ahead, Wetherspoon remains optimistic: “The company currently anticipates a reasonable outcome for the current financial year, subject to our future sales performance.”
Despite a challenging economic environment, Wetherspoon shares have fallen 10% year-to-date. However, Charlie Huggins, manager of the ‘Quality Shares Portfolio’ at Wealth Club, noted the chain’s impressive recovery, attributing its resilience to competitive pricing and efficient operations.
Huggins remarked that while the backdrop for the sector remains tough, with rising wage pressures, Wetherspoon appears positioned to gain market share as interest rates begin to ease and inflation shows signs of moderation.
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