Final Results

1Separately disclosed items as disclosed in note 4.

Commenting on the results, Tim Martin, the Chairman of J D Wetherspoon plc, said:

"Sales continue to improve. In the last nine weeks, to 29 September 2024, like-for-like sales increased by 4.9%.

"In contrast, the World Health Organisation (WHO) reported on its findings in 2022.

(see pages 54-56 of Wetherspoon News

"The company currently anticipates a reasonable outcome for the current financial year, subject to our future sales performance."

• Visit our website jdwetherspoon.com
• The annual report and financial statements 2024 has been published on the Company's website on 04 October 2024.
• The current financial year comprises 52 trading weeks to 27 July 2025.
• The next trading update will be issued on 6 November 2024.

CHAIRMAN'S STATEMENT

Financial performance

The company was founded in 1979 - and this is the 41st year since incorporation in 1983.

The table below outlines some key aspects of our performance during that period.

Summary accounts for the years 1984-2024

Notes

Adjustments to statutory numbers

• EPS and free cash flow per share are calculated using dilutive shares in issue.

Continued Recovery

The recovery from the pandemic continued in FY24, the year under review.

In the first full post-lockdown financial year (FY22), like-for-like (LFL) sales declined by 4.7% compared to the pre-pandemic FY19. LFL sales, on the same basis, increased to 7.4% in FY23 and to 16.0% in FY24.

Total sales in FY24, which were £2,036 million, have increased by £217 million compared to FY19, although the number of pubs decreased from 879 at the FY19 year-end to 800 at FY24.

Profits, before tax and separately disclosed items, like sales, have also continued to make progress, improving from a loss of £30 million in FY22, to a profit before tax of £43 million in FY23 and to £74 million in FY24.

Increased Freehold Ownership

Since 2010, the company has invested £458 million in acquiring the freehold "reversions" of pubs where it was previously the tenant.

72% of pubs are now freehold, an increase from 41% in 2010.

Continued Expansion

As previously stated, our best estimate is that the company has potential for about 1,000 pubs in the UK. Examples of recent pub openings include The Captain Flinders near Euston Station, The Lion and the Unicorn in Waterloo Station, the Star Light, Heathrow Airport, and The Grand Assembly in Marlow, all in the London region.

In addition to new openings, there is potential to expand existing successful pubs, by adding gardens or, for example, by expanding existing customer areas into adjacent buildings.

Recent examples of the expansion of existing pubs include: The Prince of Wales, Cardiff; The Sir John Moore, Glasgow; The Six Chimneys, Wakefield; Wetherspoons, Victoria Station, London; The Red Lion, Skegness; The Talk of the Town, Paignton; The Albany Palace, Trowbridge and The Mile Castle, Newcastle.

As previously indicated, the company is also increasing investment in new staff rooms, changing rooms, glass racks above bars (to cater for increased usage of brewers' "branded glasses") and air conditioning.

Trading summary

Total sales in FY24 were £2,036 million, an increase of 5.7%, compared to FY23.

LFL sales, compared to FY23, increased by 7.6%. LFL bar sales increased by 8.9%, food sales by 5.6%, slot/fruit machine sales by 10.8% and hotel-room sales by 2.7%.

LFL sales were stronger than total sales due to a small number of pub disposals and lease terminations.

Operating profit, before separately disclosed items, was £139.5 million (2023: £107.1 million). The operating margin, before separately disclosed items, was 6.9% (2023: 5.6%).

Profit, before tax and separately disclosed items, was £73.9 million (2023: £42.6 million).

In the period, the company sold eighteen pubs and terminated the lease of an additional nine pubs. This gave rise to a cash inflow of £8.9 million.

There was an exceptional loss on disposal of approximately £13.4 million, recognised in the income statement, relating to these pubs.

The company opened two pubs in the year; the Star Light at Heathrow Airport and The Captain Flinders, close to Euston Station in London.

Franchises

Wetherspoon opened its first franchised pub in Hull University's student union in January 2022. The second opened at Newcastle University in September 2023, and the third at Haven Primrose Valley Holiday Park, Filey, North Yorkshire in March 2024. Further franchise proposals are under consideration.

Earnings

Earnings per share, before separately disclosed items, were 48.6p (2023: 27.0p).

Total capital investment was £116.5 million (2023: £78.5 million). £11.9 million was invested in new pubs and pub extensions (2023: £20.4 million), £82.6 million in existing pubs and IT (2023: £47.0 million) and £21.9 million in freehold reversions of properties where Wetherspoon was the tenant (2023: £11.2 million).

Separately disclosed items

Overall, there was a pre-tax 'separately disclosed loss' of £13.3 million (2023: £48.0 million gain).

Operating profit, after separately disclosed items, was £142.6 million (2023: £106.0 million).

Profit before tax, after separately disclosed items, was £60.6 million (2023: £90.5 million).

Details of the separately disclosed items are given in note 4 of the accounts.

The tax effect on separately disclosed items is a credit of £3.5 million (2023: debit of £22.2 million).

Following £19.9 million of impairment charges and £7.6 million of impairment reversals in the year, the net book value of the company's assets in the balance sheet is £1.37 billion, which is approximately seven times the company's EBITDA (pre IFRS-16 and pre separately disclosed items), in the last 12 months, of £192.8 million.

Free cash flow

There was a free cash inflow of £33.0 million in the period, including £14.8 million from the sale of interest rate swaps (2023: £271.1 million inflow, including £169.4 million from the sale of interest rate swaps).

Free cash flow was lower than profits due to:

• the amount that the company owed to suppliers and other third parties, such as HMRC, reducing from £329 million at the end of FY23 to £298 million at the end of the period under review.
• higher-than-usual levels of reinvestment in existing pubs, which increased from £47 million in FY23 to £83 million in FY24. This reinvestment, relating to the projects mentioned above, was around £17 million more than the P&L depreciation charge for the period.
• £5 million of loan issue costs in the period relating to the refinancing of the company's loans.

Balance sheet

Debt, excluding IFRS-16 lease debt, was £660.0 million at the period end (30 July 2023: £641.9 million).

On an IFRS-16 basis, which includes notional debt from leases, debt increased from £1.06 billion to £1.07 billion at the end of FY24.

Debt levels, excluding IFRS-16 lease debt, have decreased from £804.5 million to £660.0 million since January 2020, just before the first lockdown. On an IFRS-16 basis, debt decreased from £1.45 billion to £1.07 billion during this period.

Dividends and return of capital

As a result of the improved trading and financial position of the company, the board is recommending the payment of a final dividend, equivalent to the 2019 annual dividend, of 12 pence (2023: nil) per share.

During the period, 5,127,959 shares (4.1% of the share capital) were purchased by the company for cancellation, at a cost of £39.5 million, including stamp duty and fees, representing an average cost per share of 770p.

Financing

The company has total available finance facilities of £938.0 million.

On 6 June 2024, the company signed a new four-year £840.0 million banking agreement on attractive terms.

On 22 August 2023, the company disposed of all interest rate swaps in place, receiving £14.8 million to do so.

At the same time, the company took out a new interest-rate swap of £200.0 million from 23 August 2023 to 6 February 2025 at a rate of 5.67%.

On 25 September 2023, the company took out a further interest-rate swap of £400.0 million from 6 February 2025 to 6 February 2028 at a rate of 4.23%.

The total cost of the company's debt, in the period under review, including the banks' margin was 7.05% (30 July 2023: 6.09%).

Taxation

The total tax charge for the period was £15.4 million in respect of profits before separately disclosed items (2023: £8.7 million).

The total tax charge comprises two parts. The first part is the actual current tax (the 'cash' tax) which this year is £2.9 million (2023: nil).

The second part is deferred tax (the 'accounting' tax), which is tax payable in future periods, that must be recognised in the current period for accounting purposes. The accounting tax charge for the period is £12.5 million (2023: £8.7 million).

You cannot be serious

Pubs are highly regulated businesses, controlled by licensing laws, which originate in parliament.

In recent weeks, according to press reports, two potential changes to licensing regulations have been aired by government ministers and academic researchers, both aimed at lowering alcohol consumption.

The first is that pub and hospitality licensing hours might be reduced. Since 1988, pubs have been able to open all day, having previously been required to close for around two or three hours each afternoon.

In addition, in 2005, the then government further liberalised licensing laws, which resulted in many pubs opening an hour or two more in the evening - in Wetherspoon's case, usually until midnight on weekdays and until 1am on Fridays and Saturdays.

Counterintuitively, since these liberalisations, the share of alcohol consumption of the "on-trade" - pubs, clubs, restaurants etc - has plummeted.

In the early 1980s, the on-trade accounted for about 90% of beer sales, for example.

This dropped to about 50% before the pandemic and is now about 40%, probably due to the increase in price disparity with supermarkets, which stems from the tax disadvantage referred to in the section entitled "VAT equality" below.

The effect of reducing pub opening times would certainly further reduce on-trade consumption, but that reduction is likely to be replaced by "off-trade" consumption at home and in other "unregulated" environments.

Among the advantages of the on-trade, linked to regulation, are that consumption is supervised by trained licensees, police and local authorities, in many cases including CCTV coverage of premises, and so on.

This does not mean that pubs are invariably oases of tranquillity but, in general, pub behaviour is good and pubs are valued by communities.

The second, slightly daft, proposal is reported as emanating from Cambridge University - that pubs should sell beer in quantities of two-thirds of a pint (sometimes called schooners), rather than the traditional pint.

Common sense indicates that reducing glass sizes is unlikely, due to human nature, to reduce alcohol consumption in pubs, and would also have no effect whatsoever on drinks bought in supermarkets, unless container sizes in supermarkets were also, unrealistically, reduced.

For example, our Aussie cousins, notorious guzzlers, already use schooners without any noticeable reduction in consumption.

Both these proposals seem likely, if implemented, to encourage off-trade consumption at the expense of the on-trade, thereby exchanging the relatively highly priced and supervised pub environment for the inexpensive and unsupervised alternative of home, park and party consumption.

The word 'pub' may have a misleading connotation for some ministers and researchers. For example, Wetherspoon's highest selling draught product by far, is Pepsi. Coffee and tea volumes, which are not in the draught category, are approximately double those of Pepsi. The reality is that products sold in pubs have radically changed in recent decades.

In summary, neither of these proposals would seem to pass the common-sense test, as John McEnroe would no doubt aver.

Scottish Business Rates

In appendix 1 below, we explain how business rates for Scottish pubs, theoretically based on property values, have, by a strange process of legal reasoning, become a de facto sales tax, based on the sales performance of the occupier.

VAT equality

Wetherspoon, along with many in the hospitality industry, has been a strong advocate of tax equality between the off-trade, which consists mainly of supermarkets, and the on-trade, consisting mainly of pubs, clubs and restaurants.

It does not make economic sense for the tax system to favour mainly out-of-town supermarkets over mainly high-street pubs.

This imbalance is a major factor in town centre and high street dereliction.

Our more detailed arguments on this point, from our FY23 annual report, can be found in appendix 2 below.

How pubs contribute to the economy

Wetherspoon and other pub and restaurant companies have always generated far more in taxes than are earned in profit.

In the financial year ended 28 July 2024, the company generated taxes of £780.2 million.

The table below shows the £6.2 billion of tax revenue generated by the company, its staff and customers in the last ten years.

Each pub, on average, generated £7.1 million in tax during that period. The tax generated by the company, during this period, equates to approximately 26 times the company's profits after tax.

Republic of Ireland pubs contributed €14.0 million of Irish tax contributions during the year, of which €7.9 million related to VAT, €3.5 million alcohol duty and €2.3 million employment taxes.

Note - this table is prepared on a cash basis, is UK only and post IFRS-16 from FY20 onward.

Corporate Governance

Wetherspoon has been a strong critic of the composition of the boards of UK-quoted companies.

Directors of UK PLCs have, on average, relatively little experience of the companies they govern, due to the "nine-year rule", which limits their tenure, combined with the fact that most directors are part-time, and have never worked for the company in question, on a full-time basis.

The combination of arbitrary rules, the preponderance of part-time directors and overloaded institutional governance departments means that bureaucracy and virtue-signalling, rather than innovation and efficacy, dominate most UK PLC boardrooms.

In appendix 3 below, further details are provided on this issue from our FY23 annual report.

Further progress

In the period Wetherspoon awarded £49.0 million of bonuses and free shares to employees, of which 96.5% was paid to staff below board level and 86.3% was paid to staff working in our pubs. Approximately 24,500 of our 42,300 employees are shareholders in the company.

The average length of service of a pub manager increased to 14.9 years, and of a kitchen manager is 10.9 years. There are 26 employees who have worked for the company for more than 30 years, 662 for more than 20 years, 4,056 for more than 10 years and 11,444 for more than five years.

251 pubs feature in the 2025 Good Beer Guide, an increase of 15 compared to last year.

In November 2023, Wetherspoon was voted the Best Airport Retailer for Food & Beverages at the British Travel Awards.

In August 2024, our national distribution centre in Daventry, operated by DHL, had its 20th anniversary. 27 of the original colleagues from 2004 are still working there. In addition, we opened a secondary warehouse in Rugby which, as well as acting as a business continuity solution, will allow for further company volume growth.

The company's UK nominated charity is Young Lives vs. Cancer (previously CLIC Sargent). It supports children and young people with cancer. Since our partnership began in 2002, Wetherspoon has raised over £23.5 million for the charity, thanks to the generosity and efforts of our customers and employees.

677 of the company's washrooms have been awarded the highest platinum or diamond statuses by the National Loo of the Year awards. The awards are aimed at highlighting and improving standards of away-from home washrooms across the UK. The washrooms are judged against numerous criteria, including décor and maintenance, cleanliness, accessibility, hand-washing and drying equipment and overall management.

In January 2024, the company was awarded the highest rating by the Sustainable Restaurant

Association - the world's largest accreditation scheme for pubs and restaurants, see link to SRA article.

Wetherspoon came first in the 'Out to Lunch' league table, compiled by the Soil Association, when last awarded, in 2019 and 2021. Restaurants and pubs are judged and scored on a range of criteria: family friendliness, healthy options, food quality, value, sustainability and ingredients' provenance.

Cod and haddock are sourced from fisheries which have been certified to the MSC's (Marine Stewardship Council) standards for well-managed and sustainable fisheries.

Guinness have a 'Quality Accreditation Programme'. Independent assessors review 17 aspects of quality. 100% of pubs passed their Guinness accreditation.

Since 1999, Wetherspoon has worked with independent real-ale quality assessor Cask Marque to gauge the quality of ale being served in its pubs. Cask Marque carries out an 11-point audit covering stock rotation, beer line cleanliness, equipment maintenance, glass washing cleanliness and hygiene. A star rating is awarded from 1 to 5, with a target of 4 to 5 stars for all pubs. Cask Marque state that 66% of UK pubs achieve 4 or 5 stars. 98% of Wetherspoon pubs have achieved 4 or 5 stars.

Sustainability, recycling and the environment

Wherever possible, Wetherspoon separates waste into eight streams: glass; tins/cans; cooking oil; paper/cardboard; plastic; lightbulbs; food waste and general waste.

In partnership with Veolia, our waste service provider, 99.8% of general waste was diverted from landfill in FY24.

9,324 tonnes of recyclable waste were processed last year at our national recycling centre. In addition, food waste is sent for 'anaerobic digestion' and used cooking oil is converted to biodiesel for agricultural use.

Smart meters are installed in the majority of pubs (and are being installed into the rest of pubs) to facilitate energy consumption reporting.

According to ISTA, a leading company providing energy services, Wetherspoon has reduced greenhouse gas emissions by 66% over the last 10 years, after adjusting for sales growth. During that time, the company has also contributed £108.1m in climate change levies and carbon taxes.

Length of service

2 Excludes 2020, 2021 and 2022.

Food hygiene ratings

Wetherspoon has always emphasised the importance of hygiene standards.

We now have 735 pubs rated on the Food Standards Agency's website (see table below). The average score is 4.99, with 99.6% of the pubs achieving a top rating of five stars. We believe this to be the highest average rating for any substantial pub company.

Property litigation

Press corrections

In the febrile atmosphere of the first UK lockdown, a number of harmful inaccuracies were published in the press. A large number of corrections and apologies were received, as a result of legal representations by Wetherspoon.

(https://www.jdwetherspoon.com/wp-content/uploads/2024/08/Does-Truth-Matter_.pdf).

Pubwatch

Wetherspoon pubs are members of 532 schemes country wide, with 4 new schemes and 10 less schemes due to disposals.

In our view, Pubwatch is integral to making towns and cities a safe environment for everyone.

Current trading and outlook

As indicated above, sales continue to improve. In the last nine weeks, to 29 September 2024, like-for-like sales increased by 4.9%.

In contrast, the World Health Organisation (WHO) reported on its findings in 2022.

(see pages 54-56 of Wetherspoon News

The company currently anticipates a reasonable outcome for the current financial year, subject to our future sales performance.

APPENDIX 1 Extract from Wetherspoon FY23 Annual report, Chairman's Statement

Business rates transmogrified to a sales tax

APPENDIX 2 Extract from Wetherspoon FY23 Annual report, Chairman's Statement

VAT equality

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.

.

APPENDIX 3 Extract from Wetherspoon FY23 Annual report, Chairman's Statement

Corporate Governance

Wetherspoon has been a strong critic of the composition of the boards of UK-quoted companies.

APPENDIX 4 Extract from Wetherspoon FY23 Annual report, Chairman's Statement

Property Litigation

In 2013, Wetherspoon agreed an out-of-court settlement of approximately £1.25 million with developer Anthony Lyons, formerly of property leisure agent Davis Coffer Lyons, relating to claims that Mr Lyons had been an accessory to frauds committed by Wetherspoon's former retained agent Van de Berg and its directors Christian Braun, George Aldridge and Richard Harvey in respect of properties in Leytonstone (which currently trades as the Walnut Tree), Newbury (which was leased to Café Rouge) and Portsmouth (which currently trades as The Isambard Kingdom Brunel).

Of these three properties, only Portsmouth was pleaded by Wetherspoon in its 2008/9 case against Van de Berg. Mr Lyons denied the claim and the litigation was contested.

As part of a series of cases, Wetherspoon also agreed out-of-court settlements with:

• Property investor Jason Harris, formerly of First London and now of First Urban Group who paid £400,000 to Wetherspoon to settle a claim in which it was alleged that Harris was an accessory to frauds committed by Van de Berg. Harris contested the claim and did not admit liability.

Messrs Ferrari and Harris both contested the claims and did not admit liability.

INCOME STATEMENT for the 52 weeks ended 28 July 2024

1 Separately disclosed items is a measure not required by accounting standards. Post separately disclosed items is a GAAP measure.

STATEMENT OF COMPREHENSIVE INCOME for the 52 weeks ended 28 July 2024

Items which will be reclassified subsequently to profit or loss:

CASH FLOW STATEMENT for the 52 weeks ended 28 July 2024

1 Free cash flow is a measure not required by accounting standards.

BALANCE SHEET as at 28 July 2024

1Restated 30 July 2023.

STATEMENT OF CHANGES IN EQUITY

1Restated 30 July 2023.

Other reserves contain net proceeds received for share placements which took place in previous periods. During the year, £39.5 million was deducted from other reserves relating to share buybacks. Other reserves is used as this is determined to be distributable for the purposes of the Companies Act 2006.

As at 28 July 2024, the company had distributable reserves of £253.5 million (Restated 2023: £265.0 million).

NOTES TO THE FINANCIAL STATEMENTS

Revenue

1Included in cost of sales is £664.7 million (2023: £654.3 million) relating to the cost of inventory recognised as an expense.

Other operating income

Included in other operating income is a reversal of overcharged depreciation in relation to previously impaired fixed assets

and right-of-use assets, totalling £4,139,000. The overcharge of depreciation occurred between the periods ended 26 July 2020

and 30 July 2023, and was not material in any one period to any line item. As such, the overcharge has been reversed in

the current year.

Local government support grants

The company has recognised £14,000 (2023: £54,000) of local government support grants in the UK and the Republic of Ireland, associated with the COVID-19 pandemic.

Other operating costs

Other operating costs relate to a contractual dispute with a large supplier which has now been resolved. Costs of £1,846,000 (2023: 1,076,000) have been recognised in relation to this dispute. Further costs of £684,000 (2023: nil) are in relation to an historic employment tax issue. Income of £1,471,000 has been recognised in the period relating to a settlement agreement (2023: nil).

Property losses

In the table on the previous page, those costs classified under the 'separately disclosed property losses' relate to the loss on disposal of sites sold during the year.

Other property losses

Property impairment relates to pubs which are deemed unlikely to generate sufficient cash flows in the future to support their carrying value. In the year, a total impairment charge of £19,934,000 (2023: £35,966,000) was incurred in respect of property, plant and equipment and £2,161,000 (2023: £3,377,000) in respect of right-of-use assets, as required under IAS 36. There were impairment reversals of £8,678,000 recognised in the year (2023: £5,430,000).

In the year, a total impairment charge of £347,000 (2023: £4,448,441) was incurred in respect of the impairment of our investment properties.

There was £5,334,000 impairment charge relating to assets under construction (2023: nil).

Separately disclosed finance costs

In the previous year, the company recognised covenant waiver fees of £1,038,000.

Separately disclosed finance income

The separately disclosed finance income of £16,131,000 (2023: £97,724,000) relates to interest-rate swaps. A charge of £1,894,000 (2023: income of £71,124,000) relates to the fair value movement on interest-rate swaps. Income of £18,025,000 (2023: £13,310,000) relates to the amortisation of the hedge reserve to the P&L relating to discontinued hedges. As a result of no hedge accounting being applied, there has been no hedge ineffectiveness recognised in the P&L (2023: £13,290,000).

Taxation

The tax effect on separately disclosed items is a credit of £3,526,000 (2023: £22,190,000 charge).

Employee benefits expenses

1Restated 30 July 2023.

1Restated 30 July 2023.

Finance income and costs

• Income tax expense
• Tax on profit/(loss) on ordinary activities

The standard rate of corporation tax in the UK is 25%. The company's profits for the accounting period are taxed at a rate of 25% (2023: 21%).

• Income tax expense (continued)
• Reconciliation of the total tax charge

The taxation charge pre-separately disclosed items, for the 52 weeks ended 28 July 2024, is based on the profit before tax of £73.9m and the estimated effective tax rate for the 52 weeks ended 28 July 2024 of 20.8% (July 2023: 20.5%). This comprises of a current tax rate of 3.9% (July 2023: 0%) and a deferred tax charge of 16.9% (July 2023: 20.5% charge).

The UK standard weighted average tax rate for the period is 25% (2023: 21%). The current tax rate is lower than the UK standard weighted average tax rate owing to tax losses in the period.

• Income tax expense (continued)
• Deferred tax

The main rate of corporation tax increased to 25% on 1 April 2023. Deferred tax balances have been recognised at the rate they are expected to reverse. The deferred tax in the balance sheet is as follows:

The company has recognised deferred tax assets of £8.9 million (2023 restated: £23.8 million), which are expected to be offset against future profits. This includes a deferred tax asset of £1.1 million (2023: £17.1 million), in respect of UK tax losses. Included in other temporary differences is £5.7 million (2023 restated: £5.6 million) relating to capital losses capable of offset against rolled over gains.

Deferred tax assets and liabilities have been offset as follows:

1Restated 30 July 2023.

As at 28 July 2024, the company had a potential deferred tax asset of £5.4 million (2023: £4.1 million) relating to capital losses (gross tax losses £21.6 million (2023: £16.4 million)) and tax losses in the Republic of Ireland (gross tax losses £32.6 million (2023: £24.2 million)). Both types of loss do not expire and will be available to use in future periods indefinitely. A deferred tax asset has not been recognised, as there is insufficient certainty of recovery.

For periods commencing on or after 1 January 2024, additional reporting requirements will apply to ensure that the effective tax rate will be at least 15% in all countries, subject to various complex calculations. This is in line with the minimum taxation rules announced by the G7 and progressed by the OECD Inclusive Framework on Base Erosion and Profit Sharing. These rules have been implemented in the UK via the Multinational Top Up Tax legislation during the year and will first apply to the accounting period ending 27 July 2025.

Historically the company's effective tax rate has been above 15%. However, the company does operate in Ireland where the corporation tax rate is below 15%. The group has assessed the exposure to Multinational Top Up Taxes and any impact will be immaterial.

The company applies the exception to recognising and disclosing information about deferred tax assets and liabilities related to Pillar Two income taxes, as provided in the amendments to IAS 12 issued in May 2023.

Earnings and free cash flow per share

Weighted average number of shares

Basic earnings/(loss) per share is calculated by dividing the profit/(loss) after tax for the period by the weighted average number of ordinary shares in issue during the financial year of 125,291,770 (2023: 128,750,155) less the weighted average number of shares held in trust during the financial year of 4,956,072 (2023: 3,296,278). Shares held in trust are shares purchased by the company to satisfy employee share schemes which have not yet vested.

Diluted earnings/(loss) per share is calculated by dividing the profit/(loss) after tax for the period by the weighted average number of ordinary shares in issue during the financial year adjusted for both shares held in trust and the effects of potentially dilutive shares. In the event of making a loss during the year, the diluted loss per share is capped at the basic earnings per share as the impact of dilution cannot result in a reduction in the loss per share.

The non-cash movement in bank loans and the private placement relate to the amortisation of loan issue costs. The amortisation charge for the year of £439,000 (2023: £1,246,000) is disclosed in note 6. These are arrangement fees paid in respect of new borrowings and charged to the income statement over the loans' expected life.

Dividends paid and proposed

The board proposes, subject to shareholders' consent, to pay a final dividend of 12.0p (2023: nil) per share, on 28 November 2024, to those shareholders on the register on 25 October 2024, giving a total dividend for the year of 12.0p per share.

Intangible assets

The majority of intangible assets relates to computer software and software development. Examples include the development costs of the Wetherspoon customer-facing app and other bespoke company applications.

Property, plant and equipment

During the period, an amount of £76,389,000 (2023: £41,646,000) was spent on the reinvestment of existing pubs. £21,944,000 (2023: £11,202,000) was spent on freehold reversions. £11,933,000 (2023: £20,361,000) was spent on investment in new pubs and pub extensions. This led to a total capital expenditure of £110,266,000 (2023: £73,209,000).

Reclassifications relate to assets transferred from short leasehold property to freehold and long leasehold property on a freehold reversion.

Investment property

The company owns six (2023: six) freehold properties with existing tenants - and these assets have been classified

as investment properties:

Total £000

Cost:

Rental income received from investment properties in the period was £1,205,000 (2023: £1,197,000).

At the year end, the investment properties were independently valued at £18,290,000 giving rise to an impairment charge of £347,000 (2023: £4,448,000) and an impairment reversal of £73,000, to adjust their net book values

Events after the balance sheet date

There were no significant events after the balance sheet date.

Going Concern

In line with accounting standards, the going concern assessment period is the 12-months from the date of approval of this report (approximately the end of quarter 1 of FY26).

The Company has modelled a 'base case' forecast in which recent momentum of sales, profit and cash flow growth is sustained. Within this forecast, the Company has anticipated continued high levels of inflation, particularly on wages, utility costs and repairs. The base case scenario indicates that the Company will have sufficient resources to continue to settle its liabilities as they fall due and operate within its leverage covenants for the going concern assessment period.

A more cautious, yet plausible, scenario has been analysed, in which lower sales growth is realised. The Company has reviewed, and is satisfied with, the mitigating actions which it could take if such an outcome were to occur. Such actions could include reducing discretionary expenditure and/or implementing price increases. Under this scenario, the Company would still have sufficient resources to settle liabilities as they fall due and sensible headroom within its covenants through the duration of the going concern review period.

The Company has also performed a 'reverse stress case' which shows that it could withstand a 13% reduction in like-for-like sales from those assessed in the 'base case' throughout the going concern period, as well as costs assumed to increase at a similar level to the downside scenario, before the covenant levels would be exceeded towards the end of the period. The directors consider this scenario to be remote as, other than when the business was closed during the pandemic, it has never seen sales decline at anywhere close to that rate. Furthermore, the Company could take additional mitigating actions, in such a scenario, to prevent any covenant breach.

Prior year restatements

During the year, it was identified and agreed that two previous year restatements should be recognised for the period ended 31 July 2022. The restatements are disclosed and described below:

Restatement of IFRS 16 right-of-use asset

Due to errors identified in the lease database, in the period ended 28 July 2024 the company migrated to a new lease accounting system to manage the estate. As a result, the right-of-use asset and reserves balance as at 31 July 2022 has been restated by £8 million. The position as at 30 July 2023 has also been restated.

Restatement of deferred tax asset

During the period, it was identified that there was certainty of recovery of historical capital losses against rolled over gains relating to the year ended 31 July 2022 and therefore, a deferred tax asset should have been recognised at this point totalling £5.6 million. As a result, the position as at 30 July 2023 has also been restated.

The disclosures impacted as a result of the above two misstatements have been identified throughout the financial statements. The effect on specific financial statement line items within the Statement of changes in equity and Balance Sheet are as follows: