JD Wetherspoon has this morning delivered something of a shot in the arm to the eating and drinking-out market, announcing a successful bank debt refinancing and the subsequent re-instatement of dividend payments to shareholders. The group has secured a new £530m four-year facility with a syndicate of 11 banks. The group took the opportunity of its interim results announcement to reveal a plan to step further into the breakfast market, with all of its pubs set to open at 7am from the end of April. The news came as the group, which operates 746 high-volume pubs, said like-for-like sales for the first six weeks of its second half were down 0.4% - against marginal like-for-like growth in the first six months of 0.1%. Tim Martin, chairman and founder said the “record sales performance” came in the face of “immense pressure on the pub business from government legislation”. Pre-tax profits rose 17.5% to £36.2m on sales up 4.1% to £488.1m. Operating margins were held at 10.0%, with lower energy costs offset by a rise in cash spent on pub repairs. On the bank refinancing, the group said the process had been oversubscribed and had been secured on competitive market terms. The £530m facility replaces an old one of £435m due to expire in December 2010 and the additional headroom of almost £100m paves the way for the group to re-commence dividend payments to shareholders. The extension of trading hours to 7am comes as sales of coffee and breakfasts hit record levels – the group now sells 275,000 breakfasts per week and about 500,000 coffees and teas. It began opening its pubs at 9am five years ago. JDW said that it continued to improve its product range – it had recently successfully introduced Carlsberg and Tuborg lagers as well as Monster drinks – the number one energy drink in the USA. The first half saw JDW open 17 of a planned 50 pubs this year, taking its estate to 746 pubs – after two closures as a result of the closure of Terminal 2 at Heathrow airport. The majority of the 17 sites were already existing pubs – with rents and development costs below historic trends. On taxation, the company said taxes paid to the government were £197.8m, including VAT of £75.8m; excise duty of £61m; PAYE and National Insurance of £30.5m; property taxes of £19.5m and corporation tax of £11m. This was against JDW’s post-tax profits of £24.4m. JDW handed over a good part of its statement to criticise government attempts to tackle issues of binge drinking by a “zealous crackdown” on pubs. It said: “In our opinion, this has had counterproductive consequences in several ways. On a practical level, excessive penalties for pubs which inadvertently sell alcoholic drinks to those under 18 are unfair, since most parents permit 16 and 17-year-olds to use pubs. Indeed, almost without exception, today’s adults used pubs themselves at that age. “The only method which pubs can use to try to stop those under 18 is to check IDs constantly. This is exasperating for those over 18, while expensive and confrontational for publicans. This red tape and greatly increased taxes for pubs have contributed to pubs’ closing in unprecedented numbers in recent years, with a devastating reduction of many communities’ social life. “The crackdown on pubs may actually exacerbate the problems of binge drinking, since it has resulted in more drinking, especially by young people, in the unsupervised environments of parties, streets and parks. “In January 2010, the government’s attitude to pubs became yet more absurd: police have been instructed to recruit and employ those under 18 to try to buy alcoholic products in pubs, under police supervision. Should these purchases be ‘successful’ on two occasions, within a specified period, pubs’ licences are reviewed by the local licensing authorities, with devastating financial and personal consequences for publicans and their staff. “This sort of entrapment is prohibited in most areas of the law; it is an astonishing error of judgement to use such draconian tactics against pubs which are regarded by the great majority of people as extremely valuable social institutions.” In addition to securing a new facility the group said that in the six months its net borrowings had fallen by £4.7m to £383.5m, and borrowings had fallen by more than £50m in the 12 months to 24 January 2010. Its debt-to-ebitda ratio had fallen from 3.2 times to 2.7 times. The company will release an interim trading statement on May 5, 2010.