JD Wetherspoon today attempted to pre-empt critics who fear it might have to come back to the stock market to fund its continuing expansion by revealing it had £400m in hand to underpin its expansion plans "for the foreseeable future".

The company was unveiling yearly figures to July 28 which showed turnover up 24% to £601.3m, and profits before tax up 21% to £53.6m.

Like-for-like sales were up 5% and like-for-like profits by 3.8% in the year, Wetherspoon's 22nd year of like-for-like increases.

Chairman Tim Martin said the company opened 87 pubs during the year, down slightly on 94 in the previous year. Two more new pubs since the year-end have taken it to 610 in total, including 34 Lloyd's No 1 outlets.

He said Wetherspoons had £36m of unutilised banking facilities and £14m of cash at the end of its financial year, and. since then £55m of new banking facilities have been agreed, meaning total facilities, are now more than £400m. The company's own cash flow now funded 54% of new pub development, excluding capitalised interest, which together with its banking facilities meant it could fund its expansion "for the foreseeable future".

The company had a "good" pipeline of new sites, Martin said, with 25 sites in the course of construction, 60 with the necessary permissions for development, 60 more on which terms have been agreed and 166 "in negotiation", making 311 in all.

Its new pubs are slightly larger in size than recent years, and have been opening at "the highest level of initial sales that we have experienced," Martin said.

The company's operating margin fell to 11.7% from 12.1% last year, mainly as a result of higher labour costs, Wetherspoons said. Cash profits per pub increased marginally to £207,400. Free cash flow increased by 17% to £71.4m.

Martin said economic profit, calculated by adding depreciation to profit before tax and subtracting capital expenditure on existing pubs of £187m, increased by 22% to £71.2m. Total capital investment was £155.9m, 3.1% of turnover, against 3.3% of turnover last year.

Gearing excluding the impact of deferred taxation was 82%,up from 75% at the end of the previous year. Net interest was covered 4.2 times by operating profit, the same as in 2001.

Wetherspoons said since April it has had children's certificates in almost all its pubs, "resulting in a considerable improvement in food and soft drink sales." It is also intending to open all its pubs at 10am, one hour earlier than currently, to sell coffee and breakfasts.

The company said like-for-like sales increased by 5.9% in August, helped by good summer weather, with total company sales up by 25%.

JD Wetherspoon year ended 28 July 2002


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