Trading Update Announcement

J D Wetherspoon plc ('Wetherspoon' or 'the company') announces an update on current trading, before entering its close period for its interim results, for the six months ending 28 January 2024, which are expected to be announced on 22 March 2024.

Current trading

In the 25 weeks to 21 January 2024, like-for-like (LFL) sales were +10.1% higher than the same period a year ago. Bar sales increased by +11.8%, food by +7.9% and slot/fruit machines by +10.4%. Hotel room sales increased by +3.1%.

LFL sales in the last 12 weeks were +11.1% higher than the same period a year ago.

Total sales have grown by +8.4% in the year to date.

The "Coffer CGA Business Tracker" reports monthly LFL sales for a number of multi-outlet pub and restaurant companies.

In December, the latest month for which information is available, the tracker reported industry LFL sales of +8.8%, compared to +15.2% for Wetherspoon.

LFL sales in the last three weeks of the period were +5.8%.

Wetherspoon has outperformed the tracker for 16 consecutive months.

Financing

Interest costs for FY24, excluding IFRS 16 notional interest, are expected to be approximately the same as they were in FY23 (£51 million).

Debt levels at the end of FY24 are currently expected to be broadly in line with the level reported at the end of FY23 (£642m).

Property

The company has opened two pubs in the year to date, at London's Heathrow airport and at London Euston railway station.

Five pubs have been sold and eight leasehold pubs have either been surrendered to the landlord or sublet. The disposals and surrenders resulted in a cash inflow of £3.8 million.

The company currently has a trading estate of 814 pubs.

Outlook

Wetherspoon chairman Tim Martin said:

"Wetherspoon, like the hospitality industry, has seen a consistent but slow recovery, following the pandemic.

"Although inflation is, in general, reducing, labour and energy costs are far higher than pre-pandemic.

"A main issue for the pub trade is that labour costs are around 30% of sales, compared to around 10% for supermarkets.

"The price of a pint in a supermarket is about £1, so a 10% increase in labour costs (which are around 10 pence per pint) necessitates a one pence increase in the selling price to cover costs.

"However, for pubs, the average selling price of a pint is around £4.50. The labour per pint is therefore around £1.35 (30% of £4.50), necessitating a 13.5 pence increase in the selling price to cover extra costs.

"The inevitable consequence is that increased labour costs raise the differential in prices between the hospitality industry and supermarkets.

"At the same time, pubs pay far higher VAT and business rates than supermarkets, further exacerbating the price disparity.

"In particular, pubs and restaurants pay 20% VAT in respect of food sales, whereas supermarkets pay almost nothing, a tax differential which is surely unfair.

"Notwithstanding these issues, Wetherspoon currently expects an outcome for the financial year in line with market expectations, and will provide further updates as the year progresses."

Ends.

Visit our website: www.jdwetherspoon.com

4.

• The current financial year comprises 52 trading weeks to 28 July 2024.
• The next trading update is expected to be the Company's interim results statement on 22 March 2024.