Market report

Wetherspoon sales record | Barratt cuts target

JD Wetherspoon
Sales are up at Wetherpoons

Wetherspoons chairman Tim Martin said the pubs company is seeing record sales despite having fewer outlets.

He also hopes new Chancellor Rachel Reeves will create a level playing field for tax between pubs and supermarkets which he has long campaigned about.

Like-for-like sales increased by 5.8% in the 10 weeks to 07 July 2024, compared to the same period last year. Year-to-date (YTD) like-for-like sales increased by 7.7%. It has a trading estate of 801 pubs with 10 on the market..

It recently signed a four-year £840 million banking agreement “on attractive terms”.

Mr Martin said: “The gradual recovery in sales and profits, following the pandemic, has continued in the current financial year.

“Total sales are, again, at record levels, with fewer pubs.

“Sales per pub are approximately 21% higher than pre-pandemic levels, which has helped to compensate for the very substantial increase in costs.

“For example, compared to the 2019 financial year, labour in this financial year has increased by approximately £164 million, energy by £28 million, repairs (also affected by labour costs) by £38 million and interest (excluding IFRS 16 interest) by £16 million.

“Notwithstanding these cost pressures, the company continues to endeavour to “widen the moat” by investing in areas such as beer gardens, staff rooms, above-bar glass racks and improved beer dispense systems.

“Staff retention is at its highest ever level. 11,066 staff, an average of 14 per pub, have worked for the company for 5 years or more. Of those, 3,895 have worked for 10 years and 632 for 20 years.

“The average Wetherspoon pub has generated taxes of one sort or another of £7 million in the last 10 years, as well as generating considerable employment and social benefits.

“The last government failed to implement tax equality between pubs and supermarkets, leading to pub closures and underinvestment – Wetherspoon hopes that the current Chancellor, with a Bank of England pedigree, will understand how many beans make five, and rectify this inequality.”


Barratt Developments

Barratt Developments is to build fewer homes next year in an indication of how Labour’s new targets will take some time to take effect.

Barratt is planning between 13,000 and 13,500 home completions in the new financial year – 1,000 short of the 14,004 built in the financial year that just ended (FY23: 17,206).

Adjusted profit before tax is expected to be slightly ahead of the company’s previous expectations. 

CEO David Thomas said. “Looking ahead, we are pleased that the proposed combination with Redrow was strongly supported by both sets of shareholders in the Spring and, subject to the CMA’s approval, we look forward to bringing together two businesses to create an exceptional UK housebuilder ensuring we are well-positioned for the future.

“We welcome the new Government’s urgency and focus on housebuilding and reform of the planning system as key to both unlocking economic growth and tackling the chronic undersupply of new homes.

“We look forward to working with Government and wider stakeholders to address supply side constraints and deliver the new homes, of all tenures, the country needs.”


Dyson

Applicance manufacturer Dyson’s plan to cut its UK workforce by a quarter is a significant blow not just to those losing their jobs but also Labour’s push to get the economy growing, says Danni Hewson, head of financial analysis at AJ Bell.

“The company has made it clear the plans were a long time in the making but there have been questions about the future of the business in the UK since 2019 when it shifted its headquarters to Singapore. 

“Though its research and development facility will remain, the decision is an uncomfortable one and begs the question why Sir James Dyson and his company believe the future must be found elsewhere.”



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