CHAIRMAN’S STATEMENT
f
J D Wetherspoon plc
ANNUAL REPORT AND FINANCIAL STATEMENTS 2023
Wetherspoon owns
and operates pubs
throughout the UK
and Ireland. The
company aims to
provide customers
with good-quality
food and drinks,
served by well-trained
and friendly staff, at
reasonable prices.
The pubs are
individually designed,
and the company aims
to maintain them in
excellent condition.
Contents
SECTION 1
Chairman’s statement
Income statement
Statement of comprehensive income
Cash flow statement
Balance sheet
Statement of changes in equity
Notes to the financial statements
SECTION 2
Accounting policies
Strategic report
Strategic report – environmental matters
Independent auditors’ report
Directors and officers
Directors’ report
Directors’ remuneration report
Corporate governance
Information for shareholders
Company information
Glossary
1
9
9
10
11
12
13
41
47
51
54
63
64
67
76
82
83
84
Financial calendar
Year end
28 July 2024
Preliminary announcement for 2024
October 2024
Interim report for 2024
March 2024
Annual general meeting
16 November 2023
View this report online:
jdwetherspoon.com/investors-home
CHAIRMAN’S STATEMENT
SECTION 1
Financial performance
The company was founded in 1979 – and this is the 40th year since incorporation in 1983.
The table below outlines some key aspects of our performance during that period.
Summary accounts for the years 1984-2023
Financial year
Total number
of pubs
(sites)
Total sales
£000
1984
1985
1986
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
20054
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
20206
20213
20223
20233
1
2
2
5
6
9
19
31
45
67
87
110
146
194
252
327
428
522
608
635
643
655
657
671
694
731
775
823
860
886
927
951
926
895
883
879
872
861
852
826
818
1,890
2,197
3,357
3,709
5,584
7,047
13,192
21,380
30,800
46,600
68,536
100,480
139,444
188,515
269,699
369,628
483,968
601,295
730,913
787,126
809,861
847,516
888,473
907,500
955,119
996,327
1,072,014
1,197,129
1,280,929
1,409,333
1,513,923
1,595,197
1,660,750
1,693,818
1,818,793
1,262,048
772,555
1,740,477
1,925,044
Profit/(loss)
before tax and
separately disclosed
items
£000
(7)
Earnings per
share before
separately disclosed
items
pence3
0
Free cash flow
£000
Free cash flow
per share
pence2,3
185
219
382
248
789
603
1,098
2,020
4,171
6,477
9,713
15,200
17,566
20,165
26,214
36,052
44,317
53,568
56,139
54,074
47,177
58,388
62,024
58,228
66,155
71,015
66,781
72,363
76,943
79,362
77,798
80,610
102,830
107,249
102,459
(44,687)
(154,676)
(30,448)
42,559
0.2
0.2
0.3
0.3
0.6
0.4
0.8
1.9
3.3
3.6
4.9
7.8
8.7
9.9
12.9
11.8
14.2
16.6
17.0
17.7
16.9
24.1
28.1
27.6
32.6
36.0
34.1
39.8
44.8
47.0
47.0
48.3
69.2
79.2
75.5
(35.5)
(119.2)
(19.6)
26.4
915
732
1,236
3,563
5,079
5,837
13,495
20,968
28,027
28,448
40,088
49,296
61,197
71,370
83,097
73,477
68,774
69,712
52,379
71,411
99,494
71,344
78,818
91,542
65,349
92,850
109,778
90,485
107,936
93,357
96,998
(58,852)
(83,284)
21,922
271,095
0.4
0.4
0.6
2.1
3.9
3.6
7.4
11.2
14.4
14.5
20.3
24.2
29.1
33.5
38.8
36.7
37.1
42.1
35.6
50.6
71.7
52.9
57.7
70.4
51.8
74.1
89.8
76.7
97.0
88.4
92.0
(54.2)
(67.8)
17.3
211.4
Notes
Adjustments to statutory numbers
1. Where appropriate, the earnings/losses per share (EPS), as disclosed in the
statutory accounts, have been recalculated to take account of share splits,
the issue of new shares and capitalisation issues.
2. Free cash flow per share excludes dividends paid which were included
in the free cash flow calculations in the annual report and accounts for
the years 1995–2000.
3. EPS and free cash flow per share are calculated using dilutive shares in
issue.
4. Before 2005, the accounts were prepared under UKGAAP.
All accounts from 2005 to date have been prepared under IFRS.
5. Apart from the items in notes 1–4, all numbers are as reported
in each year’s published accounts.
6. From financial year 2020 data is based on post-IFRS 16 numbers following
the transition from IAS17 to IFRS 16.
7. Free cash flow is defined in the APM section within accounting policies on
page 46. The free cash flow calculation can be found on
the cash flow statement.
J D WETHERSPOON PLC
ANNUAL REPORT AND FINANCIAL STATEMENTS 2023
1
CHAIRMAN’S STATEMENT
Comparison to Pre-Pandemic Period (FY19)
Trading summary
The sales recovery, following the pandemic,
continued in FY23.
Like-for-like sales for the financial year increased by
7.4% (FY22: -4.7%), compared to FY19. Bar sales
increased by 2.1%, food sales by 13.7%, slot/fruit
machine sales by 43.0% and hotel sales by 15.4%.
Like-for-like sales, compared to FY19, have
continued to improve in the first 9 weeks of the
current financial year (FY24) and are 17.3% ahead
of the equivalent 9-week period.
The comparisons in the remainder of this statement
are with the previous financial year, which ended on
31 July 2022.
Cash flow
Free cash flow, including pre-tax proceeds of
approximately £169 million from the sale of the
majority of the company’s interest rate swaps, was
£271.1 million (2022: £21.9 million).
Excluding the proceeds from the swaps, free cash
flow was approximately £102 million.
Free cash flow was calculated after capital
payments of £47.0 million for existing pubs (2022:
£45.9 million), £12.3 million for share purchases for
employees (2022: £12.8 million) and payments of
tax and interest.
Balance sheet
Wetherspoon’s balance sheet is significantly
stronger than it was in the period before the
pandemic.
Debt levels, excluding IFRS-16 lease debt, have
decreased by £163 million since January 2020, just
before the first lockdown, to £641.9 million.
This reduction has been achieved after investments
in freehold reversions (pubs where Wetherspoon
was previously the tenant) of £81.7 million and
£108.5 million in new pubs.
During the pandemic, the company raised a total of
£229 million of new equity.
On an IFRS-16 basis, which includes notional debt
from leases, debt decreased from £1.45 billion to
£1.06 billion between January 2020 and the end of
FY23.
Total sales for FY23 were £1,925 million, an
increase of 10.6%, compared to the 53 weeks
ended 31 July 2022.
Like-for-like sales, compared to FY22, increased by
12.7%. Like-for-like bar sales increased by 9.0%,
food sales by 17.7%, slot/fruit machine sales by
26.4% and hotel rooms by 11.8%.
The operating profit, before separately disclosed
items, was £107.1 million (2022: £25.7 million). The
operating margin, before separately disclosed items,
was 5.6% (2022: 1.5%).
The profit before tax and separately disclosed items
was £42.6 million (2022: £30.4 million loss),
including property gains of £2.2 million (2022: £2.1
million).
In the year, the company sold 13 pubs, terminated
the leases of 14 pubs, and closed 4 pubs. This gave
rise to a cash inflow of £7.0 million after associated
fees. There was a loss on disposal of £9.4 million,
recognised in the income statement, relating to
these pubs.
Earnings per share before separately disclosed
items, were 27.0p (2022: losses per share of 19.6p).
Total capital investment was £78.5 million (2022:
£122.7 million). £20.4 million was invested in new
pubs and pub extensions (2022: £51.1 million),
£47.0 million in existing pubs and IT (2022: £45.9
million) and £11.2 million in freehold reversions of
properties where Wetherspoon was the tenant
(2022: £25.8 million).
Separately disclosed items
Overall, there was a pre-tax ‘separately disclosed
gain’ of £48.0 million (2022: £56.7 million).
There was a £97.7 million gain related to the fair
value movement of interest rate swaps; a £9.4
million charge relating to the disposal of pubs; and a
£38.3 million property impairment charge, in respect
of pubs which were deemed unlikely to generate
sufficient cash flows, in the future, to support their
carrying value.
Although there have been a number of impairments
over the years in respect of individual properties, the
book value of the company’s assets is £1.38 billion,
which is approximately eight times the company’s
EBITDA of £170 million. There are many pubs in the
estate where expected future cash flows would
result in a valuation which is considerably in excess
of book value. However, accounting rules do not
take account of these potential valuations. This
2
ANNUAL REPORT AND FINANCIAL STATEMENTS 2023
J D WETHERSPOON PLC
CHAIRMAN’S STATEMENT
historical cost accounting approach can also create
anomalies in pub valuations.
For example, one pub in South London has made
an estimated return on equity, since opening over
20 years ago, after all costs including interest and
tax, of £4.4 million; yet its valuation has been
impaired due to low profitability in the aftermath of
the pandemic.
Dividends and return of capital
The board has not recommended the payment of a
final dividend (2022: £0). There have been no share
buybacks in the financial year to date (2022: £0).
Financing
As at 30 July 2023, the company’s total net debt,
excluding derivatives and lease liabilities, was
£641.9 million (2022: £891.7 million), a decrease of
£249.8 million.
In November 2022, the company repaid government
“CLBILS” loans of £100 million, which had been due
to mature in August 2023. The company has total
available finance facilities of £983 million.
The company has interest rate swaps in place in
respect of £200 million, from August 2023 to
February 2025. The swap rate currently being paid,
excluding the banks’ margin, is 5.67%. The total
cost of the company’s debt, in the year under
review, including the banks’ margin was 6.25%.
Property
The company opened three pubs during the year
and sold, closed or terminated the leases of 31
pubs. The company had a trading estate of 826
pubs at the financial year end.
In the last 12 years, the company has increased the
ratio of freehold pubs it owns from 43% to 70%, as a
result of investment in freehold reversions and
opening freehold pubs.
As indicated above, at 30 July 2023, the net book
value of the property, plant and equipment of the
company was £1.38 billion.
The properties have not been revalued since 1999.
Taxation
The total tax charge is £8.7 million in respect of
profits before separately disclosed items (2022: £5.6
million credit).
The total tax charge comprises two parts. The first
part is the actual current tax (the ‘cash’ tax) which
this year is nil (2022: nil) because of losses carried
forward from prior years.
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 in
the year is £8.7 million (2022: £5.6 million credit).
The company is seeking a refund of historic excise
duty from HMRC, totalling £524k , in relation to
goods sent to the Republic of Ireland, when
Wetherspoon pubs first opened in that country. The
company has been charged excise duty on the
same goods twice, as they were purchased in the
UK, and excise duty was paid in full. Irish excise
duty was then paid in addition.
Business rates transmogrified to a sales tax
Business rates are supposed to be based on the
value of the building, rather than the level of trade of
the tenant. This should mean that the rateable value
per square foot is approximately the same for
comparable pubs in similar locations. However, as a
result of the valuation approach adopted by the
government “Assessor” in Scotland, Wetherspoon
often pays far higher rates per square foot than its
competitors.
This is highlighted (in the tables below) by
assessments for the Omni Centre, a modern leisure
complex in central Edinburgh, where Wetherspoon
has been assessed at more than double the rate per
square foot of the average of its competitors, and for
The Centre in Livingston (West Lothian), a modern
shopping centre, where a similar anomaly applies.
As a result of applying valuation practice from
another era, which assumed that pubs charged
approximately the same prices, the raison d’être of
the rating system – that rates are based on property
values, not the tenant’s trade – has been
undermined.
Similar issues are evident in Galashiels, Arbroath,
Anniesland – and, indeed, at most Wetherspoon
pubs in Scotland. In effect, the application of the
rating system in Scotland discriminates against
businesses like Wetherspoon, which have lower
prices, and encourages businesses to charge higher
prices. As a result, consumers are likely to pay
higher prices, which cannot be the intent of rating
legislation.
J D WETHERSPOON PLC
ANNUAL REPORT AND FINANCIAL STATEMENTS 2023
3
CHAIRMAN’S STATEMENT
Omni Centre, Edinburgh
VAT equality
Occupier’s Name
Rateable
value (RV)
Customer
area (ft²)
Rates per
square
foot
Playfair (JDW)
£218,750
Unit 9 (vacant)
Unit 7 (vacant)
£48,900
£81,800
Frankie & Benny's
£119,500
Nando's
Slug & Lettuce
£122,750
£108,750
The Filling Station
£147,750
Tony Macaroni
£125,000
Unit 6 (vacant)
Cosmo
£141,750
£200,000
Average (exc JDW)
£121,800
2,756
1,053
2,283
2,731
2,804
3,197
3,375
3,427
3,956
7,395
3,358
£79.37
£46.44
£35.83
£43.76
£43.78
£34.02
£43.78
£36.48
£35.83
£27.05
£38.55
Occupier’s Name
The Newyearfield
(JDW)
Paraffin Lamp
Wagamana
Nando’s
Chiquito
ASK Italian
PizzaExpress
Prezzo
Harvester
Pizza Hut
Hot Flame
The Centre, Livingston
Rateable
value (RV)
Customer
Area (ft²)
Rates per
square
foot
£165,750
4,090
£40.53
£52,200
£67,600
£80,700
£68,500
£69,600
£68,100
£70,600
£98,600
£111,000
£136,500
2,077
2,096
2,196
2,221
2,254
2,325
2,413
3,171
3,796
4,661
2,721
£25.13
£32.25
£36.75
£30.84
£30.88
£29.29
£29.26
£31.09
£29.24
£29.29
£30.40
Average (exc JDW)
£82,340
As we have previously stated, the government
would generate more revenue and jobs if it were to
create tax equality among supermarkets, pubs and
restaurants.
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.
Pubs have lost 50% of their beer sales to
supermarkets in the last 35 or so years. It makes no
sense for supermarkets to be treated more leniently
than pubs, since pubs generate far more jobs per
pint or meal than do supermarkets, as well as far
higher levels of tax. Pubs also make an important
contribution to the social life of many communities
and have better visibility and control of those who
consume alcoholic drinks.
.
Tax equality is particularly important for residents of
less affluent areas, since the tax differential is more
important there – people can less afford to pay the
difference in prices between the on and off trade.
As a result, in these less affluent areas, there are
often fewer pubs, coffee shops and restaurants, with
less employment and increased high-street
dereliction. Tax equality would also be in line with
the principle of fairness – the same taxes should
apply to businesses which sell the same products.
In summary, as a result of the approach taken in
Scotland, business rates for pubs are de facto a
sales tax, rather than a property tax, as the above
examples clearly demonstrate.
4
ANNUAL REPORT AND FINANCIAL STATEMENTS 2023
J D WETHERSPOON PLC
CHAIRMAN’S STATEMENT
How pubs contribute to the economy
Wetherspoon and other pub and restaurant
companies have always generated far more in taxes
than are earned in profits.
In the financial year ended 30 July 2023, the
company generated taxes of £760.2 million.
The table below shows the £6.0 billion of tax
revenue generated by the company, its staff and
customers in the last 10 years. Each pub, on
average, generated £6.8 million in tax during that
period. The tax generated by the company, during
this 10-year period, equates to approximately 25
times the company’s profits after tax.
2023
2022
2021
2020
2019
2018
2017
2016
2015
2014
£m
£m
£m
£m
£m
£m
£m
£m
£m
£m
TOTAL
2014 to
2023
£m
VAT
372.3
287.7
93.8
244.3
357.9
332.8
323.4
311.7
294.4
275.1
2,893.4
Alcohol duty
166.1
158.6
70.6
124.2
174.4
175.9
167.2
164.4
161.4
157
1,519.8
PAYE and NIC
124.0
141.9
101.5
106.6
121.4
109.2
96.2
95.1
84.8
78.4
1,059.1
Business rates
49.9
50.3
1.5
39.5
57.3
55.6
53
50.2
48.7
44.9
450.9
Corporation tax
12.2
1.5
21.5
19.9
26.1
20.7
19.9
15.3
18.4
155.5
Corporation tax
credit (historic
capital
allowances)
Fruit/slot
machine duty
Climate change
levies
Stamp duty
Sugar tax
Fuel duty
Apprenticeship
levy
Carbon tax
Premise licence
and TV licences
Landfill tax
Furlough tax
Eat Out to Help
Out
Local
government
grants
TOTAL TAX
TAX PER PUB
(£m)
TAX AS % OF
NET SALES
PROFIT/(LOSS)
AFTER TAX
-
-
-
-
15.7
12.8
4.3
11.1
0.9
3.1
1.9
2.5
-
9.7
2.7
2.7
1.9
2.2
-
7.9
1.8
1.3
1.1
1.9
-
-
9
10
4.9
2
1.7
1.2
-
0.5
0.5
0.5
1.1
-
-
-
-
-
-
-4.4
-213
-124.1
-
-23.2
-1.4
-11.1
-
-
-
-
-
-
-2
-
-2.0
11.6
10.5
10.5
11
11.2
11.3
107.9
9.6
3.7
2.9
2.2
1.3
1.9
0.8
-
-
-
-
9.2
1.2
0.8
2.1
1.7
3
0.7
1.7
-
-
-
9.7
5.1
-
2.1
0.6
3.4
0.8
2.5
-
-
-
8.7
2.6
-
6.4
1.8
-
6.3
2.1
-
2.1
2.9
2.1
-
3.6
0.8
2.2
-
-
-
-
3.7
1.6
2.2
-
-
-
-
2.7
0.7
1.5
-
-
-
88.6
26.8
12.8
20.1
11.4
18.3
8.0
10.1
-341.5
-23.2
-12.5
760.2
666.7
38.9
441.9
764.9
730.5
695.2
672.3
632.4
600.5
6,003.5
0.92
0.78
0.05
0.51
0.87
0.83
0.78
0.71
0.67
0.66
6.78
39.5%
38.3%
5.0%
35.0%
42.1%
43.1%
41.9%
42.1%
41.8%
42.6%
39.0.%
33.8
-24.9
-146.5
-38.5
79.6
83.6
76.9
56.9
57.5
58.9
237.3
Note – this table is prepared on a cash basis. IFRS-16 from FY20 onwards.
J D WETHERSPOON PLC
ANNUAL REPORT AND FINANCIAL STATEMENTS 2023
5
CHAIRMAN’S STATEMENT
Corporate governance
Wetherspoon has been a strong critic of the
composition of the boards of UK-quoted companies.
As a result of the ‘nine-year rule’, limiting the tenure
of NEDs and the presumption in favour of
‘independent’, part-time chairmen, boards are often
composed of short-term directors, with very little
representation from those who understand the
company best - people who work for it full time, or
have worked for it full time.
Wetherspoon’s review of the boards of major banks
and pub companies, which teetered on the edge of
failure in the 2008-10 recession, highlighted the
short “tenure”, on average, of directors.
In contrast, Wetherspoon noted the relative
success, during this fraught financial period, of pub
companies Fuller’s and Young’s, the boards of
which were dominated by experienced executives,
or former executives.
As a result, Wetherspoon has increased the level of
experience on the Wetherspoon board by
appointing four “worker directors”.
All four worker directors started on the ‘shop floor’
and eventually became successful pub managers.
Three have been promoted to regional management
roles. They have worked for the company for an
average of 24 years.
Board composition cannot guarantee future
success, but it makes sensible decisions, based on
experience at the coalface of the business, more
likely.
The UK Corporate Governance Code 2018 (the
‘Code’) is a vast improvement on previous codes,
emphasising the importance of employees,
customers and other stakeholders in commercial
success. It also emphasises the importance of its
comply-or-explain ethos, and the consequent need
for shareholders to engage with companies in order
to understand their explanations.
A major impediment to the effective implementation
of comply or explain seems to be the undermanning
of the corporate governance departments of major
shareholders.
For example, Wetherspoon has met a compliance
officer from one major institution who is responsible
for around 400 companies - an impossible task.
As a result, it appears that compliance officers and
governance advisors, in practice, often rely on a
“tick-box” approach, which is, itself, in breach of the
Code.
A further issue is that many major investors, in their
own companies, for sensible reasons, do not
observe the nine-year rule, and other rules,
themselves. An approach of “do what I say, not
what I do” is clearly unsustainable.
Further progress
As always, the company has tried to improve as
many areas of the business as possible, on a week-
to-week basis, rather than aiming for ‘big ideas’ or
grand strategies.
Frequent calls on pubs by senior executives, the
encouragement of criticism from pub staff and
customers and the involvement of pub and area
managers, among others, in weekly decisions, are
the keys to success. Wetherspoon paid £36.0
million in respect of bonuses and free shares to
employees in the period ended 31 July 2023, of
which 98.6% was paid to staff below board level and
83.4% was paid to staff working in our pubs.
Wetherspoon has been the biggest corporate
sponsor of ‘Young Lives vs Cancer’ (previously
CLIC Sargent), having raised a total of £22.2 million
since 2002. During the pandemic, our contributions
had been reduced, but, since the reopening of our
pubs’ there have been great efforts seen and our
contributions have bounced back significantly.
Bonuses and free shares
As indicated above, Wetherspoon has, for many
years (see table below), operated a bonus and
share scheme for all employees. Before the
pandemic, these awards increased, as earnings
increased for shareholders.
Financial
year
Bonus and
free shares
Profit/(loss)
after tax1
£m
£m
Bonus and free
shares as % of
profits
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
2021
2022
2023
Total
19
16
21
23
23
24
29
29
31
33
44
43
46
33
23
30
36
503
47
36
45
51
52
57
65
59
57
57
77
84
80
(39)
(146)
(25)
34
591
41%
45%
45%
44%
43%
42%
44%
50%
53%
58%
57%
51%
58%
-
-
-
106%
53%2
1IFRS 16 was implemented in the year ending 26 July 2020 (FY20). From this
period all profit numbers in the above table are on a post-IFRS 16 basis.
Before this date all profit numbers are on a pre-IFRS 16 basis.
2 Excludes 2020, 2021 and 2022.
6
ANNUAL REPORT AND FINANCIAL STATEMENTS 2023
J D WETHERSPOON PLC
CHAIRMAN’S STATEMENT
Length of service
The attraction and retention of talented pub and
kitchen managers are important for any hospitality
business. As the table below demonstrates, the
retention of managers has improved, even during
the pandemic.
Financial
year
Average pub
manager length
of service
Average kitchen
manager length of
service
(Years)
(Years)
2013
2014
2015
2016
2017
2018
2019
2020
2021
2022
2023
9.1
10.0
10.1
11.0
11.1
12.0
12.2
12.9
13.6
13.9
14.3
6.0
6.1
6.1
7.1
8.0
8.1
8.1
9.1
9.6
10.4
10.6
Food hygiene ratings
Wetherspoon has always emphasised the
importance of hygiene standards.
We now have 753 pubs rated on the Food
Standards Agency’s website (see table below). The
average score is 4.99, with 99.2% of the pubs
achieving a top rating of five stars. We believe this
to be the highest average rating for any substantial
pub company.
In the separate Scottish scheme, which records
either a ‘pass’ or a ‘fail’, all of our 60 pubs have
passed.
Financial
Year
Total pubs
scored
Average
rating
Pubs with
highest
rating %
2013
2014
2015
2016
2017
2018
2019
2020
2021
2022
2023
771
824
858
836
818
807
799
781
787
775
753
4.85
4.91
4.93
4.89
4.89
4.97
4.97
4.96
4.97
4.98
4.99
87.0
92.0
94.1
91.7
91.8
97.3
97.4
97.0
98.4
98.6
99.2
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 case 2008/9 case
against Van de Berg. Mr Lyons denied the claim
and the litigation was contested.
In the Van de Berg litigation, Mr Justice Peter Smith
ruled that Van de Berg, but not Mr Lyons (who was
not a party to the case), fraudulently diverted the
freehold of Portsmouth from Wetherspoon to
Moorstown Properties Limited, a company owned
by Simon Conway, which leased the property to
Wetherspoon.
As part of a series of cases, Wetherspoon also
agreed out-of-court settlements with:
1) Paul Ferrari of London estate agent Ferrari Dewe
& Co, in respect of properties referred to as the
‘Ferrari Five’ by Mr Justice Peter Smith in the Van
de Berg case, and
2) Property investor Jason Harris, formerly of First
London and now of First Urban Group who paid
£400,000 to 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.
Press corrections
The press and media, over the decades, have
generally been fair and accurate in reporting on
Wetherspoon. However, in the febrile atmosphere of
the first lockdown, something went awry and a
number of harmful inaccuracies were published.
In order to try to set the record straight, a special
edition of Wetherspoon News was published, which
includes details of the resulting apologies and
corrections. It can be found on the company’s
website
https://www.jdwetherspoon.com/~/media/files/pdf-
documents/wetherspoon-news/does-truth-
matter_.pdf.
J D WETHERSPOON PLC
ANNUAL REPORT AND FINANCIAL STATEMENTS 2023
7
As we said last year, perhaps the biggest threat to
the hospitality industry is the possibility of further
lockdowns and restrictions.
Those interested in the UK Government’s response
to the pandemic may like to read the reports by
Professor Francois Balloux, director of the UCL
Genetics Institute, in The Guardian, and by
Professor Robert Dingwall, of Trent University, in
the Telegraph
(see pages 54-56 of Wetherspoon News
https://www.jdwetherspoon.com/~/media/files/pdf-
documents/wetherspoon-news/wetherspoon-news-
autumn-2022.pdf)
The conclusion of Professor Balloux, broadly
echoed by Professor Dingwall, based on an analysis
by the World Health Organisation of the pandemic,
is that Sweden (which did not lock down), had a
Covid-19 fatality rate “of about half the UK’s” and
that “the worst performer, by some margin, is Peru,
despite enforcing the harshest, longest lockdown.”
Professor Balloux concludes that “the strength of
mitigation measures does not seem to be a
particularly strong indicator of excess deaths.”
Indeed, as some commentators have noted,
lockdowns were not contemplated in the UK’s
laboriously compiled prepandemic plans. It appears
that these plans were jettisoned, early on in the
pandemic, in favour of copying China’s lockdown
approach - an example, perhaps, of Warren
Buffett’s so-called “institutional imperative” -
“everyone else has locked down, so we will, too”.
The company currently anticipates a reasonable
outcome for the financial year, subject to our future
sales performance.
Tim Martin
Chairman
6 October 2023
CHAIRMAN’S STATEMENT
Board changes
Su Cacioppo retired from the Wetherspoon board
on the 7th October 2022, after 31 years with the
company. Su started as a pub manager in 1991,
then became an area manager, before eventually
becoming the board director responsible for the
personnel, legal and marketing departments in
2008.
Sir Richard Beckett KC also retired from the board
at last year’s AGM, after 13 years as a non-
executive director of the company, latterly as head
of the nominations committee.
I would like to thank sincerely Su and Richard for
their dedicated, creative and conscientious work
over many years.
Pubwatch
Pubwatch is a forum which has improved wider town
and city environments, by bringing together pubs,
local authorities and the police, in a concerted way,
to encourage good behaviour and to reduce
antisocial activity.
Wetherspoon pubs are members of 538 schemes
country wide.
The company also helps to fund National Pubwatch,
founded in 1997 by just two licensees and a police
office. This is the umbrella organisation which helps
to set up, co-ordinate and support local schemes.
It is our experience that in some towns and cities,
where the authorities have struggled to control
antisocial behaviour, the setting up of a Pubwatch
has been instrumental in improving safety and
security - of not only licensed premises, but also the
town and city in general, as well as assisting the
police in bringing down crime.
Conversely, we have found, in several towns,
including some towns on the outskirts of London,
that the absence of an effective Pubwatch scheme
results in higher incidents of crime, disorder and
antisocial behaviour.
In our view, Pubwatch is integral to making towns
and cities a safe environment for everyone.
Current trading and outlook
Wetherspoon continues to perform well. In the first 9
weeks of the current financial year, to 1 October
2023, like-for-like sales increased by 9.9%,
compared to the 9 weeks to 2 October 2022.
8
ANNUAL REPORT AND FINANCIAL STATEMENTS 2023
J D WETHERSPOON PLC
INCOME STATEMENT for the 52 weeks ended 30 July 2023
J D Wetherspoon plc, company number: 1709784
Notes
52 weeks
ended
30 July
2023
Before
separately
disclosed
items
£000
Revenue
1
1,925,044
52 weeks
ended
30 July
2023
separately
disclosed
items
£000
-
52 weeks
ended
30 July
2023
After
separately
disclosed
items
£000
1,925,044
53 weeks
ended
31 July
2022
Before
separately
disclosed
items
£000
53 weeks
ended
31 July
2022
separately
disclosed
items
£000
53 weeks
ended
31 July
2022
After
separately
disclosed
items
£000
1,740,477
-
1,740,477
Other operating (costs)/income
-
(1,022)
(1,022)
-
29,384
29,384
Operating costs
Operating profit/(loss)
Property gains/(losses)
Finance income
Finance costs
Profit/(loss) before tax
Income tax (charge)/credit
Profit/(loss) for the period
Profit/(loss) per ordinary share (p)
- Basic
- Diluted1
1 Restated, see note 8.
3
6
6
7
8
8
(1,817,982)
107,062
2,231
1,351
(68,085)
42,559
(8,734)
33,825
-
(1,817,982)
(1,714,757)
-
(1,714,757)
(1,022)
(47,712)
97,724
(1,038)
47,952
106,040
(45,481)
99,075
(69,123)
90,511
25,720
29,384
55,104
2,142
(24,526)
(22,384)
531
52,859
53,390
(58,841)
(1,000)
(59,841)
(30,448)
56,717
26,269
(22,190)
(30,924)
5,560
(12,562)
(7,002)
25,762
59,587
(24,888)
44,155
19,267
27.0
26.4
20.5
20.1
47.5
46.5
(19.6)
(19.6)
34.8
34.6
15.2
15.0
STATEMEMENT OF COMPREHENSIVE INCOME for the 52 weeks ended 30 July 2023
Items which will be reclassified subsequently to profit or loss:
Interest-rate swaps: gain taken to other comprehensive income
Interest-rate swaps: loss reclassification to the income statement
Tax on items taken directly to other comprehensive income
Currency translation differences
Net gain recognised directly in other comprehensive income
Profit for the period
Total comprehensive profit for the period
Notes
22
22
7
52 weeks
ended
30 July
2023
£000
37,529
(13,310)
(6,055)
1,633
19,797
59,587
79,384
53 weeks
ended
31 July
2022
£000
48,452
(4,332)
(11,051)
(1,474)
31,595
19,267
50,862
J D WETHERSPOON PLC
ANNUAL REPORT AND FINANCIAL STATEMENTS 2023
9
CASH FLOW STATEMENT for the 52 weeks ended 30 July 2023
J D Wetherspoon plc, company number: 1709784
Notes
52 weeks
ended
30 July
2023
£000
free cash
flow1
52 weeks
ended
30 July
2023
£000
free cash
flow
53 weeks
ended
31 July
2022
£000
53 weeks
ended
31 July
2022
£000
Cash flows from operating activities
Cash generated from operations
Interest received
Interest paid
9
6
6
270,686
270,686
178,510
178,510
1,011
1,011
97
97
(50,545)
(50,545)
(41,044)
(41,044)
Cash proceeds on termination of interest-rate swaps
169,413
169,413
–
–
Corporation tax paid
Lease interest
(12,200)
(12,200)
(715)
(715)
23
(15,954)
(15,954)
(17,501)
(17,501)
Net cash flow from operating activities
362,411
362,411
119,347
119,347
Cash flows from investing activities
Reinvestment in pubs
(41,646)
(41,646)
(42,777)
(42,777)
Reinvestment in business and IT projects
(5,315)
(5,315)
(3,113)
(3,113)
Investment in new pubs and pub extensions
Freehold reversions and investment properties
Proceeds of sale of property, plant and equipment
(20,361)
(11,202)
11,349
–
–
–
(51,083)
(25,773)
10,547
–
–
–
Net cash flow from investing activities
(67,175)
(46,961)
(112,199)
(45,890)
Cash flows from financing activities
Purchase of own shares for share-based payments
(12,332)
(12,332)
(12,808)
(12,808)
Loan issue cost
Advances/(repayments) under bank loans
Other loan receivables
–
(200,033)
889
–
–
–
(192)
(192)
50,000
(3,542)
–
–
Lease principal payments
23
(32,023)
(32,023)
(38,535)
(38,535)
Asset-financing principal payments
(4,911)
–
(7,132)
–
Net cash flow from financing activities
(248,410)
(44,355)
(12,209)
(51,535)
Net change in cash and cash equivalents
Opening cash and cash equivalents
Closing cash and cash equivalents
18
18
46,826
40,347
87,173
(5,061)
45,408
40,347
Free cash flow1
1 Free cash flow is a measure not required by accounting standards; a definition is provided in the accounting policies
271,095
21,922
10
ANNUAL REPORT AND FINANCIAL STATEMENTS 2023
J D WETHERSPOON PLC
BALANCE SHEET as at 30 July 2023
J D Wetherspoon plc, company number: 1709784
Notes
Assets
Non-current assets
Property, plant and equipment
Intangible assets
Investment property
Right-of-use assets
Other loan receivable
Derivative financial instruments
Lease assets
Total non-current assets
Current assets
Lease assets
Assets held for sale
Inventories
Receivables
Current income tax receivables
Cash and cash equivalents
Total current assets
Total assets
Current liabilities
Borrowings
Derivative financial instruments
Trade and other payables
Provisions
Lease liabilities
Total current liabilities
Non-current liabilities
Borrowings
Derivative financial instruments
Deferred tax liabilities
Lease liabilities
Total non-current liabilities
Total liabilities
Net assets
Shareholders’ equity
Share capital
Share premium account
Capital redemption reserve
Other reserves
Hedging reserve
Currency translation reserve
Retained earnings
Total shareholders’ equity
13
12
14
23
16
22
23
23
17
15
16
18
20
22
19
21
23
20
22
7
23
27
22
30 July
2023
£000
31 July
2022
£000
1,377,816
1,426,862
6,505
18,740
387,353
1,986
11,944
8,450
5,409
23,364
419,416
2,739
61,367
9,264
1,812,794
1,948,421
1,361
400
34,558
27,267
8,351
87,173
2,001
800
26,402
29,400
2,000
40,347
159,110
1,971,904
100,950
2,049,371
(4,200)
(78)
(329,098)
(2,395)
(51,486)
(5,137)
–
(282,481)
(2,661)
(48,471)
(387,257)
(338,750)
(727,643)
–
(65,752)
(391,794)
(930,404)
(2,031)
(34,718)
(421,583)
(1,185,189)
(1,388,736)
(1,572,446)
(1,727,486)
399,458
321,885
2,575
143,170
2,337
234,579
31,781
2,148
(17,132)
399,458
2,575
143,294
2,337
234,579
13,617
(144)
(74,373)
321,885
The financial statements on pages 9-40, approved by the board of directors and authorised for issue on 6 October 2023, are
signed on its behalf by:
John Hutson
Director
Ben Whitley
Director
J D WETHERSPOON PLC
ANNUAL REPORT AND FINANCIAL STATEMENTS 2023
11
STATEMENT OF CHANGES IN EQUITY
Notes
Share
capital
Share
premium
account
£000
£000
Capital
Other
redemption
reserve
£000
reserves
£000
Hedging
reserve
£000
Currency
translation
reserve
£000
Retained
earnings
£000
Total
£000
2,575
143,294
2,337
234,579
(19,452)
1,851
(87,207)
277,977
22
22
7
22
22
7
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
33,069
(1,995)
19,788
50,862
-
48,452
(4,332)
(11,051)
-
-
-
-
-
-
-
-
19,267
19,267
-
-
-
48,452
(4,332)
(11,051)
(1,995)
521
(1,474)
-
-
-
5,874
5,874
(20)
(20)
(12,808)
(12,808)
2,575
143,294
2,337
234,579
13,617
(144)
(74,373)
321,885
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
(124)
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
18,164
2,292
58,928
79,384
37,529
(13,310)
(6,055)
-
-
-
-
-
-
-
-
-
59,587
59,587
-
-
-
37,529
(13,310)
(6,055)
2,292
(659)
1,633
-
-
-
-
-
(124)
10,545
10,545
100
100
(12,332)
(12,332)
2,575
143,170
2,337
234,579
31,781
2,148
(17,132)
399,458
As at 25 July 2021
Total comprehensive income
Loss for the period
Interest-rate swaps: cash flow
hedges
Interest-rate swaps: amount
reclassified to the income statement
Tax on items taken directly to
comprehensive income
Currency translation differences
Share-based payment charges
Tax on share-based payment
Purchase of own shares for share-
based payments
At 31 July 2022
Total comprehensive income
Profit for the period
Interest-rate swaps: cash flow
hedges
Interest-rate swaps: amount
reclassified to the income statement
Tax on items taken directly to
comprehensive income
Currency translation differences
Share capital expenses
Share-based payment charges
Tax on share-based payment
Purchase of own shares for share-
based payments
At 30 July 2023
The share premium account represents those proceeds received in excess of the nominal value of new shares issued. £124,000
has been recognised during the year (2022: nil) in relation to the issue of shares in previous periods.
The capital redemption reserve represents the nominal amount of share capital repurchased and cancelled in previous periods.
Other reserves contain net proceeds received for share placements which took place in previous periods. The other reserve as
used as this is determined to be distributable for the purposes of the Companies Act 2006.
See note 22 for details on the hedging reserve.
The currency translation reserve contains the accumulated currency gains and losses on the long-term financing and balance
sheet translation of the overseas branch. The currency translation difference reported in retained earnings is the retranslation of
the opening reserves in the overseas branch at the current period end’s currency exchange rate.
As at 30 July 2023, the company had distributable reserves of £251.4 million (2022: £173.7 million).
12
ANNUAL REPORT AND FINANCIAL STATEMENTS 2023
J D WETHERSPOON PLC
NOTES TO THE FINANCIAL STATEMENTS
1. Revenue
Bar
Food
Slot/fruit machines
Hotel
Other
52 weeks
53 weeks
ended
30 July
2023
£000
ended
31 July
2022
£000
1,093,368
1,024,677
742,067
639,683
62,579
24,939
2,091
51,639
22,848
1,630
1,925,044
1,740,477
2. Operating profit/(loss) – analysis of costs by nature
This is stated after charging/(crediting):
52 weeks
53 weeks
Variable concession rental payments (note 23)
Short-term leases (note 23)
Cancelled principal payments (note 23)
Repairs and maintenance
Net rent receivable (note 23)
Share-based payments (note 5)
Depreciation of property, plant and equipment (note 13)
Amortisation of intangible assets (note 12)
Depreciation of investment properties (note 14)
Amortisation of right-of-use assets (note 23)
Analysis of continuing operations
Revenue
Cost of sales1
Gross profit
Administration costs
Operating profit/(loss) after separately disclosed items
ended
30 July
2023
£000
16,980
504
-
94,011
(2,506)
10,546
70,173
1,827
185
37,556
ended
31 July
2022
£000
8,799
10
(4,726)
101,520
(2,001)
5,874
71,227
3,240
87
42,291
52 weeks
53 weeks
ended
30 July
2023
£000
ended
31 July
2022
£000
1,925,044
1,740,477
(1,765,970)
(1,640,202)
159,074
(53,034)
106,040
100,275
(45,171)
55,104
1Included in cost of sales is £654.3 million (2022: £599.8 million) relating to cost of inventory recognised as expense.
Auditor's remuneration
52 weeks
53 weeks
Fees payable for the audit of the financial statements
- Audit fees
- Additional audit work (for previous year audit)
Fees payable for other services
- Audit related services (interim audit procedures)
Total auditor's fee
ended
30 July
2023
£000
560
50
82
692
ended
31 July
2022
£000
415
85
55
555
J D WETHERSPOON PLC
ANNUAL REPORT AND FINANCIAL STATEMENTS 2023
13
NOTES TO THE FINANCIAL STATEMENTS
3. Property losses and gains
52 weeks
52 weeks
52 weeks
53 weeks
53 weeks
53 weeks
ended
30 July
2023
Before
ended
30 July
2023
separately
ended
ended
ended
ended
30 July
2023
After
31 July
2022
31 July
2022
Before
separately
separately
disclosed
separately
separately
disclosed
disclosed
items
disclosed
disclosed
items
31 July
2022
After
separately
disclosed
items
£000
items
£000
items
(note 4)
£000
£000
8,136
3,492
(16)
3,476
(1,404)
(7,368)
–
(7,368)
2,735
9,467
1,857
(2,019)
112
96
1,969
(1,923)
35,966
35,966
(5,430)
(5,430)
4,448
(74)
3,377
38,287
–
–
–
–
–
–
22,871
22,871
(3,420)
(3,420)
1,015
1,015
–
–
3,964
3,964
24,430
24,430
(1,409)
(123)
(864)
–
(2,273)
(123)
–
–
–
(123)
–
(123)
Disposals
Fixed assets
Leases
Additional costs of disposal
Impairments
Property, plant and equipment (note
13)
Reversal of property, plant and
equipment (note 13)
Investment properties (note 14)
Intangible assets Impairment
reversal
Right-of-use assets (note 23)
Other
Other property gains
Leases
items
£000
–
–
42
42
–
–
–
–
–
–
(1,409)
(864)
(2,273)
(note 4)
£000
8,136
(1,404)
2,693
9,425
4,448
(74)
3,377
38,287
–
–
–
Total property losses/(gains)
(2,231)
47,712
45,481
(2,142)
24,526
22,384
14
ANNUAL REPORT AND FINANCIAL STATEMENTS 2023
J D WETHERSPOON PLC
NOTES TO THE FINANCIAL STATEMENTS
4. Separately disclosed items
52 weeks
53 weeks
Operating items
Rank settlement
Local government support grants
Duty drawback
Operating income
Other
Operating costs
Total operating (profit)/loss
Property losses
Loss on disposal of pubs
Other property losses
Impairment of assets under construction
Impairment of intangible assets
Impairment of property, plant and equipment
Reversal of property, plant and equipment impairment
Impairment of investment properties
Impairment of right of use assets
ended
30 July
2023
£000
–
(54)
–
(54)
1,076
1,076
1,022
9,425
9,425
–
(74)
35,966
(5,430)
4,448
3,377
38,287
ended
31 July
2022
£000
(27,771)
(1,443)
(170)
(29,384)
–
–
(29,384)
96
96
2,215
–
19,904
(2,668)
1,015
3,964
24,430
Total property losses
47,712
24,526
Other items
Finance costs
Finance income
Taxation
Other tax Items
Tax effect on separately disclosed items
1,038
(97,724)
(96,686)
–
22,190
22,190
1,000
(52,859)
(51,859)
(2,102)
14,664
12,562
Total separately disclosed items
(25,762)
(44,155)
Rank settlement
In the previous year, the company recognised £27,771,000 from HMRC in relation to a long-standing claim, regarding the
historic VAT treatment of slot/fruit machines.
Local government support grants
The company has recognised £54,000 (2022: £1,443,000) of local government support grants in the UK and the Republic of
Ireland, associated with the COVID-19 pandemic.
Duty drawback
In the previous year, a credit of £170,000 was recognised for duty drawback was received for perished stock during the period in
relation to the COVID-19 lockdown in the UK.
Other operating costs
As outlined in note 29, the company is in an ongoing contractual dispute with a large supplier. Costs of £1,076,000 have been
recognised in relation to this dispute.
J D WETHERSPOON PLC
ANNUAL REPORT AND FINANCIAL STATEMENTS 2023
15
NOTES TO THE FINANCIAL STATEMENTS
4. Separately disclosed items (continued)
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 £35,966,345 (2022: £19,904,000) was incurred in respect of the of
property, plant and equipment and £3,377,000 (2022: £3,964,000) was incurred in respect of right of use assets, as required
under IAS 36. There were impairment reversals of £5,430,153 recognised in the year (2022: £2,668,000).
In the year, a total impairment charge of £4,448,441 (2022: £1,015,000) was incurred in respect of the impairment of our
investment properties.
There was no impairment charge relating to assets under construction (2022: £2,215,000).
Separately disclosed finance costs
The separately disclosed finance costs of £1,038,000 relate to covenant-waiver fees (2022: £1,000,000).
Separately disclosed finance income
The company has separately disclosed finance income of £97,724,000 (2022: £52,859,000). £71,124,000 (2022: £48,527,000)
relates to the fair value on interest-rate swaps recognised in the P&L, £13,290,000 (2022: £8,143,000) relates to hedge
ineffectiveness at termination, based on highly probable cash flows and £13,310,000 (2022: £3,802,000) relates to the
amortisation of the hedge reserve to the P&L relating to discontinued hedges. See note 22.
Taxation
The tax effect on separately disclosed items is a charge of £22,190,000 (2022: £14,664,000) and relates primarily to; derivative
contracts (£16,345,000 charge) (2022: £10,009,000).
16
ANNUAL REPORT AND FINANCIAL STATEMENTS 2023
J D WETHERSPOON PLC
NOTES TO THE FINANCIAL STATEMENTS
5. Employee benefits expenses
Wages and salaries
Employee support grants
Social security costs
Other pension costs
Share-based payments
Directors' emoluments
Aggregate emoluments
Aggregate amount receivable under long-term incentive schemes
Company contributions to money purchase pension scheme
52 weeks
53 weeks
ended
30 July
2023
£000
668,397
(768)
41,262
10,675
10,545
ended
31 July
2022
£000
639,366
(4,473)
41,637
9,657
5,874
730,111
692,061
2023
£000
1,788
455
173
2,416
2022
£000
1,984
527
195
2,706
Employee support grants disclosed above are amounts claimed by the company under the coronavirus job retention schemes in
the UK and the Republic of Ireland.
For further details of directors’ emoluments including the highest paid director and details on the number of directors’ accruing a
pension, please see the directors’ remuneration report on pages 67-75.
Full-time equivalents
Head office
Pub managerial
Pub hourly paid staff
Total employees
Head office
Pub managerial
Pub hourly paid staff
2023
Number
362
4,549
19,539
24,450
2023
Number
379
4,678
37,151
42,208
2022
Number
332
4,648
19,791
24,771
2022
Number
342
4,757
37,028
42,127
The totals above relate to the monthly average number of employees during the year, not the total of employees at the end of
the year.
Share - based payments
Shares awarded during the year (shares)
Average price of shares awarded (pence)
Market value of shares vested during the year (£000)
Share awards not yet vested (£000)
52 weeks
53 weeks
ended
30 July
2023
ended
31 July
2022
3,627,591
2,048,275
534
1,464
16,632
909
7,122
11,275
J D WETHERSPOON PLC
ANNUAL REPORT AND FINANCIAL STATEMENTS 2023
17
NOTES TO THE FINANCIAL STATEMENTS
5. Employee benefits expenses (continued)
For details of the share incentive plan and the deferred bonus scheme, refer to the directors’ remuneration report on pages
67-75.
The shares awarded as part of the above schemes are based on the cash value of the bonuses at the date of the awards.
These awards vest over three years, with their cost spread over their three-year life. The share-based payment charge
above represents the annual cost of bonuses awarded over the past three years. All awards are settled in equity.
The company operates two share-based compensation plans. In both schemes, the fair values of the shares granted are
determined by reference to the share price at the date of the award. The shares vest at a £Nil exercise price – and there
are no market-based conditions to the shares which affect their ability to vest.
6. Finance income and costs
Finance costs
Interest payable on bank loans and overdrafts
Amortisation of bank loan issue costs (note 10)
Interest payable on swaps
Interest payable on asset-financing
Interest payable on private placement
Finance costs excluding lease interest
Interest payable on leases
Total finance costs
Bank interest receivable
Lease interest receivable
Total finance income
52 weeks
53 weeks
ended
30 July
2023
£000
ended
31 July
2022
£000
43,469
22,869
1,246
1,894
205
4,977
1,983
9,220
448
6,238
51,791
40,758
16,294
68,085
(1,011)
(340)
(1,351)
18,083
58,841
(103)
(428)
(531)
Net finance costs before separately disclosed items
66,734
58,310
Separately disclosed finance costs (note 4)
Separately disclosed finance income (note 4)
1,038
(97,724)
(96,686)
1,000
(52,859)
(51,859)
Net finance (income)/costs after separately disclosed items
(29,952)
6,451
18
ANNUAL REPORT AND FINANCIAL STATEMENTS 2023
J D WETHERSPOON PLC
NOTES TO THE FINANCIAL STATEMENTS
7.
Income tax expense
(a) Tax on profit/(loss) on ordinary activities
The standard rate of corporation tax in the UK is 25.0%, having increased from 19% on 1 April 2023. The company’s profits for
the accounting period are taxed at a rate of 21.0% (2022: 19.0%) being the blended tax rate applicable in the period.
52 weeks
ended
30 July
2023
Before
separately
disclosed
items
£000
52 weeks
ended
30 July
2023
separately
disclosed
items
(note 4)
£000
52 weeks
ended
30 July
2023
After
separately
disclosed
items
£000
53 weeks
ended
31 July
2022
Before
separately
disclosed
items
£000
53 weeks
ended
31 July
2022
separately
disclosed
items
(note 4)
£000
53 weeks
ended
31 July
2022
After
separately
disclosed
items
£000
–
–
–
5,552
293
5,845
5,552
293
5,845
22
–
22
–
2
2
22
2
24
Taken through income statement
Current income tax:
Current income tax charge
Previous period adjustment
Total current income tax
Deferred tax:
Origination and reversal of temporary differences
Prior year deferred tax credit
Impact of change in UK tax rate
13,602
(4,868)
–
16,345
29,947
(4,529)
14,662
10,133
-
-
(4,868)
(1,053)
–
(1,053)
-
–
(2,102)
(2,102)
Total deferred tax
8,734
16,345
25,079
(5,582)
12,560
6,978
Tax charge/(credit)
8,734
22,190
30,924
(5,560)
12,562
7,002
52 weeks
ended
30 July
2023
Before
separately
disclosed
items
£000
–
(100)
(100)
52 weeks
ended
30 July
2023
Before
separately
disclosed
items
£000
–
–
–
52 weeks
ended
30 July
2023
separately
disclosed
items
(note 4)
£000
52 weeks
ended
30 July
2023
After
separately
disclosed
items
£000
53 weeks
ended
31 July
2022
Before
separately
disclosed
items
£000
53 weeks
ended
31 July
2022
separately
disclosed
items
(note 4)
£000
53 weeks
ended
31 July
2022
After
separately
disclosed
items
£000
–
–
–
–
(100)
(100)
(2)
22
20
–
–
–
(2)
22
20
52 weeks
ended
30 July
2023
separately
disclosed
items
(note 4)
£000
6,055
–
6,055
52 weeks
ended
30 July
2023
After
separately
disclosed
items
£000
53 weeks
ended
31 July
2022
Before
separately
disclosed
items
£000
53 weeks
ended
31 July
2022
separately
disclosed
items
(note 4)
£000
53 weeks
ended
31 July
2022
After
separately
disclosed
items
£000
6,055
–
8,404
2,647
6,055
11,051
–
–
–
8,404
2,647
11,051
Taken through equity
Current tax
Deferred tax
Tax (credit)/charge
Taken through comprehensive income
Deferred tax charge on swaps
Impact of change in UK tax rate
Tax charge
J D WETHERSPOON PLC
ANNUAL REPORT AND FINANCIAL STATEMENTS 2023
19
NOTES TO THE FINANCIAL STATEMENTS
7.
Income tax expense (continued)
(b) Reconciliation of the total tax charge
The taxation charge for the 52 weeks ended 30 July 2023 is based on the pre-separately disclosed profit before tax of £42.6
million and the estimated effective tax rate before separately disclosed items for the 52 weeks ended 30 July 2023 of 20.5%
(July 2022: 18.3%). This comprises a pre- separately disclosed current tax rate of 0% (July 2022: 0.1%) and a pre- separately
disclosed deferred tax charge of 20.5% (July 2022: 18.3% charge).
The UK standard weighted average tax rate for the period is 21% (2022:19%). The current tax rate is lower than the UK
standard weighted average tax rate owing to tax losses brought forward and previously disallowed interest being deductible in
the period.
Profit/(loss) before income tax
52 weeks
ended
30 July 2023
Before
separately
disclosed
items
£000
42,559
52 weeks
ended
30 July 2023
After
separately
disclosed
items
53 weeks
ended
31 July 2022
Before
separately
disclosed
items
53 weeks
ended
31 July 2022
After
separately
disclosed
items
£000
£000
£000
90,511
(30,448)
26,269
Profit/(loss) multiplied by the UK standard rate of
8,937
19,008
(5,785)
4,991
corporation tax of 21.0% (2022: 19.0%)
Abortive acquisition costs and disposals
Expenditure not allowable
Fair value movement on SWAP disregarded for tax
Other allowable deductions
Non-qualifying depreciation and loss on disposal
Capital gains - effect of reliefs
Share options and SIPs
Deferred tax on balance-sheet-only items
Effect of different tax rates and unrecognised losses in overseas
companies
Rate change adjustment
Previous year adjustment – current tax
Previous year adjustment – deferred tax
Total tax expense/(income) reported in the income statement
427
711
(2,599)
(13)
5,875
1,175
188
(182)
2,871
(3,788)
-
(4,868)
8,734
427
711
484
(13)
8,489
1,175
188
(182)
2,871
2,341
293
498
1,001
–
168
60
396
(669)
(162)
(14)
498
1,001
34
(9)
4,105
380
(669)
(162)
(14)
–
–
(2,102)
2
(4,868)
(1,053)
(1,053)
30,924
(5,560)
7,002
20
ANNUAL REPORT AND FINANCIAL STATEMENTS 2023
J D WETHERSPOON PLC
NOTES TO THE FINANCIAL STATEMENTS
7.
Income tax expense (continued)
(c) Deferred tax
The deferred tax in the balance sheet is as follows:
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.
Deferred tax liabilities
At 31 July 2022
Previous year movement posted to the income statement
Movement during year posted to the income statement
Movement during year posted to comprehensive income
At 30 July 2023
Deferred tax assets
At 31 July 2022
Previous year movement posted to the income statement
Movement during year posted to the income statement
Movement during year posted to equity
At 30 July 2023
Accelerated tax
depreciation
£000
50,788
(3,392)
2,652
-
50,048
Other
temporary
differences
£000
Interest-rate
swap
£000
5,518
157
1,162
-
6,837
14,834
(1,629)
7,772
6,055
27,032
Total
£000
71,140
(4,863)
11,586
6,055
83,918
Share-based
payments
Tax losses &
interest capacity
carried forward
£000
Interest-rate
swap
£000
646
-
298
100
1,044
35,776
5
(18,659)
-
17,122
-
-
-
-
Total
£000
36,422
5
(18,361)
100
18,166
The company has recognised deferred tax assets of £18.2 million (2022: £36.4 million), which are expected to be offset against
future profits. This includes a deferred tax asset of £17.1 million (2022: £35.8 million), in respect of UK tax losses. Included
within other temporary differences is £6.8 million (2022: £5.5 million) of chargeable gains rolled over on the acquisition of new
assets.
Deferred tax assets and liabilities have been offset as follows:
Deferred tax liabilities
Offset against deferred tax assets
Deferred tax liabilities
Deferred tax assets
Offset against deferred tax liabilities
Deferred tax asset
2023
£000
83,918
(18,166)
65,752
18,166
(18,166)
-
2022
£000
71,140
(36,422)
34,718
36,422
(36,422)
-
As at 30 July 2023, the company had a potential deferred tax asset of £9.7 million (2022: £10.9 million) relating to capital losses
(gross tax losses £34.5 million (2022: £35.0 million)) and tax losses in the Republic of Ireland (gross tax losses £24.2 million
(2022: £18.4 million)). Both types of losses 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.
J D WETHERSPOON PLC
ANNUAL REPORT AND FINANCIAL STATEMENTS 2023
21
NOTES TO THE FINANCIAL STATEMENTS
8. 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 128,750,155 (2022: 128,750,155) less the weighted average number of
shares held in trust during the financial year of 3,296,278 (2022: 1,924,810). Shares held in trust are shares purchased by the
company to satisfy employee share schemes that 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. For the company, the dilutive shares are those that relate to employee share schemes that have not been
purchased in advance and have not yet vested. 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.
Weighted average number of shares
52 weeks
53 weeks
Shares in issue
Shares held in trust
Shares in issue - Basic
Dilutive shares1
Shares in issue - Diluted1
Earnings / (loss) per share
ended
30 July
2023
128,750,155
(3,296,278)
125,453,877
ended
31 July
2022
128,750,155
(1,924,810)
126,825,345
2,810,231
1,866,335
128,264,108
128,691,680
52 weeks ended 30 July 2023
Profit/(loss)
Basic EPS
Diluted EPS
Earnings (profit after tax)
Exclude effect of separately disclosed items after tax
Earnings before separately disclosed items
Exclude effect of property gains/(losses)
Underlying earnings before separately disclosed items
£000
59,587
(25,762)
33,825
(2,231)
31,594
pence
47.5
(20.5)
27.0
(1.8)
25.2
pence
46.5
(20.1)
26.4
(1.7)
24.7
53 weeks ended 31 July 2022
Profit/(loss)
Basic EPS
Diluted EPS
Earnings (profit after tax)1
Exclude effect of separately disclosed items after tax1
Earnings before separately disclosed items
Exclude effect of property gains/(losses)
Underlying earnings before separately disclosed items
£000
19,267
(44,155)
(24,888)
(2,142)
(27,030)
pence
15.2
(34.8)
(19.6)
(1.7)
(21.3)
Pence
15.0
(34.6)
(19.6)
(1.7)
(21.3)
1 Impact of dilutive shares was omitted in error from FY22 earnings (profit after tax) per share.
22
ANNUAL REPORT AND FINANCIAL STATEMENTS 2023
J D WETHERSPOON PLC
NOTES TO THE FINANCIAL STATEMENTS
9. Cash used in/generated from operations
52 weeks
53 weeks
Profit for the period
Adjusted for:
Tax (note 7)
Share-based charges (note 5)
Loss on disposal of property, plant and equipment (note 3)
Disposal of capitalised leases (note 3)
Net impairment charge (note 3)
Interest receivable (note 6)
Interest payable (note 6)
Lease interest receivable (note 6)
Lease interest payable (note 6)
Separately disclosed Interest (note 6)
Amortisation of bank loan issue costs (note 6)
Depreciation of property, plant and equipment (note 13)
Amortisation of intangible assets (note 12)
Depreciation on investment properties (note 14)
Aborted properties costs
Cancelled principal payments (note 23)
Foreign exchange movements
Amortisation of right-of-use assets (note 23)
Change in inventories
Change in receivables
Change in payables
Cash flow from operating activities
ended
30 July
2023
£000
59,587
30,924
10,545
10,871
(2,273)
38,287
(1,011)
50,234
(340)
22,796
(96,686)
1,246
70,173
1,827
185
1,719
–
1,633
37,556
237,273
(8,157)
2,133
39,437
270,686
ended
31 July
2022
£000
19,267
7,002
5,874
3,476
(7,368)
24,430
(103)
41,395
(428)
18,083
(51,859)
1,983
71,227
3,240
87
2,947
(4,726)
(1,474)
42,291
175,344
452
(12,171)
14,885
178,510
J D WETHERSPOON PLC
ANNUAL REPORT AND FINANCIAL STATEMENTS 2023
23
NOTES TO THE FINANCIAL STATEMENTS
10. Analysis of change in net debt
Borrowings
Cash and cash equivalents
Other loan receivable - due before one year
Asset-financing obligations – due before one year
Current net borrowings
Bank loans – due after one year
Asset-financing obligations – due after one year
Other loan receivable - due after one year
Private placement – due after one year
Non-current net borrowings
31 July
2022
£000
40,347
803
(5,137)
36,013
(828,616)
(3,974)
2,739
(97,814)
(927,665)
Cash
flows
£000
Other
changes
£000
30 July
2023
£000
87,173
803
(4,200)
83,776
–
–
48
48
(1,201)
(45)
–
(46)
(1,292)
(629,784)
-
1,986
(97,860)
(725,658)
46,826
-
889
47,715
200,033
4,019
(753)
–
203,299
Net debt
(891,652)
251,014
(1,244)
(641,882)
Derivatives
Interest-rate swaps asset – due after one year
Interest rate swaps liability – due before one year
Interest-rate swaps liability – due after one year
Total derivatives
61,367
–
(2,031)
59,336
(169,413)
–
–
(169,413)
119,990
(78)
2,031
121,943
11,944
(78)
-
11,866
Net debt after derivatives
(832,316)
81,601
120,699
(630,016)
Leases
Lease assets – due before one year
Lease assets – due after one year
Lease obligations – due before one year
Lease obligations – due after one year
Net lease liabilities
2,001
9,264
(48,471)
(421,582)
(458,788)
(1,677)
–
32,926
–
31,249
1,037
(813)
(35,941)
29,788
(5,929)
1,361
8,451
(51,486)
(391,794)
(433,468)
Net debt after derivatives and lease liabilities
(1,291,104)
112,850
114,770
(1,063,484)
Lease obligations represent long-term payables, while lease assets represent long-term receivables – both are, therefore,
disclosed in the table above.
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 £1,246,000 (2022: £1,983,000) is disclosed in note 6. These are arrangement fees paid in
respect of new borrowings and are charged to the income statement over the expected life of the loans.
The movement in interest-rate swaps relates to the change in the ‘mark to market’ valuations for the year for swaps subject to
hedge accounting.
Non-cash movement in net lease liabilities
Recognition of new leases (note 23)
Remeasurements of existing leases liabilities (note 23)
Remeasurements of existing leases assets (note 23)
Disposal of lease (note 23)
Lease transfers to property, plant and equipment
Cancelled principal payments (note 23)
Exchange differences (note 23)
Non-cash movement in net lease liabilities
30 July
2023
£000
(16,820)
2,450
223
2,969
5,333
–
(84)
(5,929)
24
ANNUAL REPORT AND FINANCIAL STATEMENTS 2023
J D WETHERSPOON PLC
NOTES TO THE FINANCIAL STATEMENTS
10. Analysis of change in net debt (continued)
Analysis of changes in net debt for 53 weeks ended 31 July 2022
Borrowings
Cash and cash equivalents
Other loan receivable - due before one year
Asset-financing obligations – due before one year
Current net borrowings
Bank loans – due after one year
Asset-financing obligations – due after one year
Other loan receivable - due after one year
Private placement – due after one year
Non-current net borrowings
Net debt
Derivatives
25 July
2021
£000
Cash
flows
£000
45,408
(5,061)
–
(7,610)
37,798
803
2,473
(1,785)
Other
31 July
changes
£000
–
–
–
–
2022
£000
40,347
803
(5,137)
36,013
(776,871)
(49,808)
(1,937)
(828,616)
(8,633)
–
(97,768)
4,659
2,739
–
–
–
(3,974)
2,739
(46)
(97,814)
(883,272)
(42,410)
(1,983)
(927,665)
(845,474)
(44,195)
(1,983)
(891,652)
Interest-rate swaps asset – due after one year
Interest-rate swaps liability – due after one year
Total derivatives
–
(37,643)
(37,643)
–
–
–
61,367
35,612
96,979
61,367
(2,031)
59,336
Net debt after derivatives
(883,117)
(44,195)
94,996
(832,316)
Leases
Lease assets – due before one year
Lease assets – due after one year
Lease obligations – due before one year
Lease obligations – due after one year
Net lease liabilities
1,638
9,890
(65,219)
(458,596)
(512,287)
(1,423)
–
1,786
(626)
2,001
9,264
40,049
(23,301)
(48,471)
–
37,014
(421,582)
38,626
14,873
(458,788)
Net debt after derivatives and lease liabilities
(1,395,404)
(5,569)
109,869
(1,291,104)
Non-cash movement in net lease liabilities 53 weeks ended 31 July 2022
Recognition of new leases (note 23)
Freehold reversions of existing lease liabilities (note 23)
Remeasurements of existing leases liabilities (note 23)
Remeasurements of existing leases assets (note 23)
Disposal of lease (note 23)
Cancelled principal payments (note 23)
Exchange differences (note 23)
Non-cash movement in net lease liabilities
31 July
2022
£000
(4,458)
15,740
(6,742)
1,160
4,514
4,726
(67)
14,873
J D WETHERSPOON PLC
ANNUAL REPORT AND FINANCIAL STATEMENTS 2023
25
NOTES TO THE FINANCIAL STATEMENTS
11. Dividends paid and proposed
No final dividend has been proposed for approval at the annual general meeting for the 52 weeks ended 30 July 2023 (2022:
Nil). The board will continue to review the dividend policy.
12. Intangible assets
Cost:
At 25 July 2021
Additions
Disposals
At 31 July 2022
Additions
Disposals
At 30 July 2023
Accumulated depreciation:
At 25 July 2021
Provided during the period
Disposals
At 31 July 2022
Provided during the period
Reversal of impairment losses
At 30 July 2023
Net book amount at 30 July 2023
Net book amount at 31 July 2022
Net book amount at 25 July 2021
Computer
software and
development
£000
Assets
under
construction
£000
32,747
2,875
(20)
35,602
1,169
–
36,771
(27,393)
(3,240)
7
(30,626)
(1,827)
74
(32,379)
4,392
4,976
5,354
4
429
–
433
1,689
(9)
2,113
–
–
–
–
–
–
–
2,113
433
4
Total
£000
32,751
3,304
(20)
36,035
2,858
(9)
38,884
(27,393)
(3,240)
7
(30,626)
(1,827)
74
(32,379)
6,505
5,409
5,358
The majority of intangible assets relate to computer software and software development. Examples include the development
costs of the Wetherspoon customer-facing app and other bespoke J D Wetherspoon applications.
26
ANNUAL REPORT AND FINANCIAL STATEMENTS 2023
J D WETHERSPOON PLC
NOTES TO THE FINANCIAL STATEMENTS
13. Property, Plant and Equipment
Cost
At 25 July 2021
Additions
Transfers to investment property
Transfers
Exchange differences
Transfer to held for sale
Disposals
Reclassifications
At 31 July 2022
Additions
Transfers
Transfers from capitalised leases
Exchange differences
Transfer to held for sale
Disposals
Reclassifications
At 30 July 2023
Freehold and
long leasehold
property
Short
leasehold
property
Equipment
fixtures and
fittings
Assets under
construction
1,428,542
286,934
37,019
-
15,948
(1,257)
(1,739)
8,407
-
1,185
(53)
-
700,311
33,146
-
2,572
(201)
-
(13,614)
(3,708)
(4,713)
12,435
(12,435)
-
1,477,334
280,330
731,115
19,315
6,551
(464)
1,289
(527)
(16,448)
7,003
5,983
1,967
-
57
-
(8,750)
(7,003)
32,148
7,900
-
214
(419)
63,868
33,700
(2,170)
(19,705)
(242)
-
-
-
75,451
10,323
(16,418)
-
253
-
Total
2,479,655
112,272
(2,170)
-
(1,753)
(1,739)
(22,035)
-
2,564,230
67,769
-
(464)
1,813
(946)
1,494,053
272,584
763,384
64,890
2,594,911
(7,574)
(4,719)
(37,491)
-
-
-
Accumulated depreciation and impairment
At 25 July 2021
(332,433)
(171,358)
(552,038)
Provided during the period
(21,336)
(9,704)
(40,186)
0
122
(18,617)
939
3,752
(6,960)
0
19
279
0
2,288
6,960
0
0
0
0
(1,055,829)
(71,227)
0
289
0
148
1,102
(2,215)
(19,451)
0
1,871
0
0
0
0
939
7,911
0
Transfers from investment property
Exchange differences
Impairment loss
Transfer to held for sale
Disposals
Reclassification
At 31 July 2022
(374,533)
(171,516)
(589,104)
(2,215)
(1,137,368)
Provided during the period
(21,958)
(9,056)
(39,159)
Transfers from investment property
Exchange differences
Impairment loss
Reversal of impairment losses
Transfer to held for sale
Disposals
Reclassifications
At 30 July 2023
Net book amount at 30 July 2023
Net book amount at 31 July 2022
Net book amount at 25 July 2021
0
(35)
(30,478)
700
206
5,514
(4,523)
0
(13)
(5,488)
3,440
0
7,534
4,523
0
(184)
0
1,290
341
6,005
0
(425,107)
(170,576)
(620,811)
1,068,946
1,102,801
1,096,109
102,008
108,814
115,576
142,573
142,011
148,273
0
0
0
0
0
0
1,614
0
(601)
64,289
73,236
63,868
(70,173)
0
(232)
(35,966)
5,430
547
20,667
0
(1,217,095)
1,377,816
1,426,862
1,423,826
During the period, an amount of £41,646,000 (2022: £42,777,000) was spent on the reinvestment of existing pubs. £11,202,000
(2022: £25,773,000) was spent on freehold reversions. £20,361,000 (2022: £58,789,000) was spent on investment in new pubs
and pub extensions. This led to a total capital expenditure of £73,209,000 (2022: £127,339,000).
Reclassifications relate to assets transferred from short leasehold property to freehold and long leasehold property upon a
freehold reversion.
J D WETHERSPOON PLC
ANNUAL REPORT AND FINANCIAL STATEMENTS 2023
27
NOTES TO THE FINANCIAL STATEMENTS
14. Investment property
The company owns six (2022: six) freehold properties with existing tenants – and these assets have been classified
as investment properties:
Cost:
At 25 July 2021
Transfer from property, plant and equipment
Additions
At 31 July 2022
Transfer from property, plant and equipment
Additions
At 30 July 2023
Accumulated depreciation and impairment:
At 25 July 2021
Provided during the period
Impairment loss
At 31 July 2022
Provided during the period
Impairment loss
At 30 July 2023
Net book amount at 30 July 2023
Net book amount at 31 July 2022
Net book amount at 25 July 2021
Rental income received in the period from investment properties was £1,197,000 (2022: £790,000).
At the year end, the investment properties were independently valued at £18,740,000 giving rise to an impairment charge of
£4,448,000 (2022: £1,015,000) was incurred to adjust their net book value.
£000
10,602
2,170
11,763
24,535
–
9
24,544
(69)
(87)
(1,015)
(1,171)
(185)
(4,448)
(5,804)
18,740
23,364
10,533
28
ANNUAL REPORT AND FINANCIAL STATEMENTS 2023
J D WETHERSPOON PLC
NOTES TO THE FINANCIAL STATEMENTS
15. Inventories
Bar, food and non-consumable stock held at pubs and the national distribution centre.
Goods for resale at cost & non consumables
16. Receivables
30 July
31 July
2023
£000
2022
£000
34,558
26,402
This category relates to situations in which third parties owe the company money. Examples include rebates from suppliers
(volume related discounts on certain products) and refunds from councils and governing bodies.
Prepayments relate to advance payments for certain services, for example insurance and tv licences.
Current (due within one year)
Other loan receivables
Other receivables
Rebate receivable
Prepayments
Non-current (due after one year)
Other loan receivables
Total other non-current assets
Credit risk
Due from suppliers – not due
Due from suppliers – over due
30 July
31 July
2023
£000
2022
£000
803
2,556
1,909
21,999
27,267
803
18,601
1,998
7,998
29,400
1,986
1,986
2,739
2,739
30 July
31 July
2023
£000
2,250
302
2,552
2022
£000
937
193
1,130
Included within other receiveables for the year ended 31 July 2022 is £11,347,000 due from HMRC in relation to the historic
VAT treatment of slot/fruit machines.
Included within prepayments for the year ended 30 July 2023 is £8,159,000 relating to a deposit held on account for the supply
of energy.
Credit risk is the risk that a counterparty does not settle its financial obligation with the company. At the period’s end, the
company has assessed the credit risk on amounts due from suppliers, based on historic experience, meaning that the expected
lifetime credit loss was immaterial. Cash and cash equivalents are also subject to the impairment requirements of IFRS9 – no
impairment loss was identified.
17. Assets held for sale
These relate to situations in which the company had exchanged contracts to sell a property, but the transaction is not yet
complete. As at 30 July 2023, one site was classified as held for sale (2022: two sites)
Property, plant and equipment
30 July
31 July
2023
£000
400
2022
£000
800
J D WETHERSPOON PLC
ANNUAL REPORT AND FINANCIAL STATEMENTS 2023
29
NOTES TO THE FINANCIAL STATEMENTS
18. Cash and cash equivalents
Cash and cash equivalents
Cash at bank earns interest at floating rates, based on daily bank deposit rates.
19. Trade and other payables
This category relates to money owed by the company to third parties.
Trade payables
Other payables
Other tax and social security
Accruals
Deferred income
30 July
31 July
2023
£000
2022
£000
87,173
40,347
30 July
31 July
2023
£000
2022
£000
141,547
107,886
15,321
75,466
95,513
1,251
17,267
67,362
88,758
1,208
329,098
282,481
Trade payables are obligations to pay for goods and services which are of a trade nature while other payables are of a non-
trade nature.
Other tax and social security includes VAT and other liabilities due to HMRC.
Accruals relate to allowances made by the company for future anticipated payments, for example; payments to suppliers,
employees’ wages and interest payments due to lenders.
Deferred income comprises of money received in advance for future marketing materials and services.
30
ANNUAL REPORT AND FINANCIAL STATEMENTS 2023
J D WETHERSPOON PLC
NOTES TO THE FINANCIAL STATEMENTS
20. Borrowings
Current (due within one year)
Other
Lease liabilities
Asset-financing obligations
Total current borrowings (including lease liabilities)
Non-current (due after one year)
Bank loans
Variable-rate facility
CLBILS
Unamortised bank loan issue costs
Private placement
Fixed-rate facility
Unamortised private placement issue costs
Other
Lease liabilities
Asset-financing obligations
30 July
31 July
2023
£000
2022
£000
51,486
4,200
55,686
48,471
5,137
53,608
630,000
–
(217)
629,783
98,000
(140)
97,860
391,794
–
391,794
730,000
100,033
(1,417)
828,616
98,000
(186)
97,814
421,583
3,974
425,556
Total non-current borrowings (including lease liabilities)
1,119,437
1,351,986
Total borrowings (including lease liabilities)
1,175,123
1,405,592
Lease liabilities
The carrying amounts of lease liabilities and the movements during the period are outlined in note 23.
Asset-financing obligations
Asset-financing obligations relate to asset finance leases of equipment in pubs.
Variable-rate facility
The secured Revolving Credit Facility is £875 million. As at 30 July 2023, £630 million was drawn down (2022: £730 million).
There are 14 participating lenders. £20 million matures in February 2024 while £855 million matures in February 2025. The
company has hedged its interest-rate liabilities to its banks by swapping the floating-rate debt into fixed-rate debt, see note 22.
CLBILS
On 14 November 2022, the company repaid the two secured loans under the CLBILS of £48.3 million and £51.7 million,
respectively. The loans had four participating lenders and an average fixed-interest charge of 1.94%; they were set to mature in
August 2023.
Unamortised bank loan issue costs
Unamortised bank loan issue costs primarily relate to refinancing, securing and extending the variable-rate facility.
Private placement
The fixed-rate facility relates to senior secured notes of £98 million. The notes mature in 2026.
The company has an overdraft facility of £10 million, which is undrawn as at 30 July 2023.
J D WETHERSPOON PLC
ANNUAL REPORT AND FINANCIAL STATEMENTS 2023
31
NOTES TO THE FINANCIAL STATEMENTS
21. Provisions
Opening
Charged to the income statement:
– Additional charges
– Unused amounts reversed
– Used during year
Closing
30 July
2023
£000
2,661
2,187
(2,437)
(16)
2,395
31 July
2022
£000
3,004
2,781
(2,588)
(536)
2,661
Legal claims
The amounts represent a provision for ongoing legal claims brought against the company in the normal course of business, by
customers and employees. Owing to the nature of the business, the company expects to have a continuous provision for
outstanding employee and public liability claims. All claim provisions are considered current and are therefore not discounted.
22. Financial instruments
Fair values
The company has the following financial instruments. IFRS13 requires disclosure of fair value measurements for each
instrument, using the following fair value measurement hierarchy know as levels:
Level 1: Quoted prices in active markets for identical assets or liabilities;
Level 2: Inputs other than quoted prices included in level 1 which are observable for the asset or liability,
either directly or indirectly;
Level 3: Inputs for the asset or liability which are not based on observable market data.
Financial assets at amortised cost
Cash and cash equivalents1
Trade and other receivables (excl.
prepayments) 1
Lease assets
Financial liabilities at amortised cost
Trade and other payables (excl. deferred
income & other taxes) 1
Asset-financing obligations
Private placement
Borrowings
Derivatives – cash flow hedges
Current derivative financial liability
Non-current derivative financial liability
Non-current derivative financial asset
30 July
30 July
2023
2023
31 July
2022
31 July
2022
Hierarchy
Book value
Fair value
Book value
Fair value
£000
£000
£000
£000
1
1
3
1
2
2
2
2
2
2
87,173
87,173
7,254
7,254
9,811
104,238
9,811
104,238
40,347
24,141
11,265
75,753
40,347
24,141
11,378
75,866
(252,381)
(252,381)
(213,911)
(213,911)
(4,200)
(4,367)
(9,111)
(9,111)
(97,860)
(95,508)
(97,814)
(94,166)
(629,783)
(618,018)
(828,616)
(811,795)
(984,224)
(970,274)
(1,149,452)
(1,128,983)
(78)
-
11,944
11,866
(78)
-
11,944
11,866
-
(2,031)
61,367
59,336
-
(2,031)
61,367
59,336
1Fair value determined to be in line with book value, this is considered to be a reasonable approximation.
32
ANNUAL REPORT AND FINANCIAL STATEMENTS 2023
J D WETHERSPOON PLC
NOTES TO THE FINANCIAL STATEMENTS
22. Financial instruments (continued)
The fair value of derivatives has been calculated by discounting all future cash flows by the market yield curve. The fair value of
borrowings and the private placement has been calculated by discounting the expected future cash flows at the year end’s
prevailing interest rates. The borrowings are deemed to be short-term for the purposes of the fair value calculations (see note 20
for split) given the draw down nature of the Revolving Credit Facility. The fair value of investment properties has been disclosed
in note 14 (hierarchy level of 3).
Maturity profile of financial liabilities
The table below presents the maturity profile of the company’s financial liabilities using the contractual undiscounted cash flows.
As at 30 July 2023
Borrowings
Private placement
Trade and other payables
Derivatives
Lease liabilities
Asset-financing obligations
As at 31 July 2022
Borrowings1
Borrowings - CLBILS
Private placement
Trade and other payables
Derivatives
Lease liabilities
Asset-financing obligations
Within
1 year
£000
1–2 years
£000
2–5 years
£000
66,232
654,589
–
3,645
3,645
101,896
253,633
(1,088)
51,081
4,324
26,488
2,599
3,655
213,911
3,211
48,471
5,137
–
(1,081)
46,107
–
–
(13,833)
124,926
–
46,424
100,119
744,054
–
3,655
107,138
–
(353)
–
(698)
48,029
4,332
More than
5 years
£000
–
–
–
–
360,005
–
–
–
–
–
(1,858)
Total
£000
720,821
109,186
253,633
(16,002)
582,119
4,324
816,966
102,718
114,448
213,911
302
133,041
382,369
611,910
–
–
9,469
1 Prior year restated, borrowings were previously reported as full facility rather than drawn down amount.
Capital risk management
The company’s capital structure comprises shareholders’ equity and loans. The objective of capital management is to ensure
that the company is able to continue as a going concern and provide shareholders with returns on their investment, while
managing risk.
The company does not have a specific measure for managing capital structure; instead, the company plans its capital
requirements and manages its loans, dividends and share buybacks accordingly. In a normal trading year, the company
measures loans using a ratio of net debt to EBITDA. With covenant waivers agreed until January 2023, relaxed covenants
effective April and July 2023 and returning to normal covenant levels from October 2023, management’s primary metrics are
liquidity until April 2023 and then profitability and net debt thereafter.
Liquidity rate risk management
Outlined in note 20 are the facilities entered into to meet the short and long-term liquidity needs of the business. The objective is
to ensure that the company has sufficient financial resources to meet working capital requirements as well as funds for
reinvestment and development. The company’s borrowings depend on the meeting of financial covenants, which if breached,
could result in funding being withdrawn. The company has agreed on covenant waivers with its lenders as outlined above. Re-
financing options have been discussed within the going concern disclosure on page 41.
Credit risk management
The company does not have a significant concentration of credit risk, as the majority of its revenue is in cash. There is little
associated credit risk assigned to derivative financial assets as contracts are held with commercial bank counterparties.
Interest rate risk management
The company is exposed to interest rate risk through variable rates on external borrowings. The company’s interest-rate swap
agreements are in place to mitigate this risk. Under these agreements, the company pays a fixed interest charge and receives
variable interest income which matches the variable interest payments made on the company’s borrowings.
The company has hedged its interest-rate liabilities to its banks by swapping the floating-rate debt into fixed-rate debt which has
fixed £580 million of these borrowings at rates of between 1.46% and 4.70% . These interest rate swaps are accounted for
through a combination of fair value through profit or loss and hedging reserves within other comprehensive income. The
effective weighted average interest rate of the swap agreements used during the year is 4.28% (2022: 1.61%), fixed for a
weighted average period of 2.9 years (2022: 6.4 years). In addition, the company has entered into forward-starting interest-rate
swaps, detailed in the table below.
J D WETHERSPOON PLC
ANNUAL REPORT AND FINANCIAL STATEMENTS 2023
33
NOTES TO THE FINANCIAL STATEMENTS
22. Financial instruments (continued)
Weighted average interest-rate swap
From
31/10/2022
31/07/2023
31/10/2025
To
31/07/2023
31/10/2025
30/04/2028
Total swap value £m
Weighted average interest %
5801
400
400
4.28%
4.67%
3.58%
1 £87.5 million of the total swap value was hedge accounted for as at 30 July 2023. All remaining notional swap values are not
hedge accounted for.
Interest-rate sensitivity
The amounts drawn under this agreement can be varied, depending on the requirements of the business. The floating-rate
borrowings are interest-bearing borrowings at rates based on SONIA, fixed for periods of up to one month. During the 52 weeks
ending 30 July 2023, if the interest rates on UK-denominated borrowings had been 1% higher, with all other variables constant,
the interest charge would have increased by £5.4million and therefore reduced the pre-tax profit for the year. Similarly, the
change in fair value of interest-rate swaps would have increased by £15.7 million (2022: £58.2 million increase in equity as
hedge accounting was applied) and therefore increased the post-separately disclosed profit for the year. This assumes no
hedge accounting is applied. The movement in the P&L arises from a change in the ‘mark to market’ valuation of the interest-
rate swaps into which the company has entered, calculated by a 1% shift of the market yield curve. The company notes that an
increase in borrowings of 1% would also increase interest charges. The company considers that a 1% movement in interest
rates represents a reasonable sensitivity to potential changes. However, this analysis is for illustrative purposes only.
An analysis of the interest-rate profile of financial liabilities, is set out below:
Analysis of interest-rate profile of financial liabilities
Floating rate due after one year
Fixed rate due after one year
Asset-financing obligations
Fixed rate due in one year
Fixed-rate due after one year
Private placement
Fixed rate due after one year
Obligations under asset-financing
The minimum payments under asset-financing fall due as follows:
Within one year
In the second to fifth year, inclusive
Less future finance charges
Present value of obligations
Less amount due for settlement within one year
Amount due for settlement during the second to fifth year, inclusive
2023
£000
2022
£000
629,783
728,583
–
100,033
629,783
828,616
4,200
–
4,200
5,137
3,974
9,111
97,860
97,814
97,860
97,814
731,843
935,541
30 July
2023
£000
4,245
–
4,245
(45)
4,200
31 July
2022
£000
5,137
4,332
9,469
(358)
9,111
(4,200)
(5,137)
-
3,974
34
ANNUAL REPORT AND FINANCIAL STATEMENTS 2023
J D WETHERSPOON PLC
NOTES TO THE FINANCIAL STATEMENTS
22. Financial instruments (continued)
Hedging interest-rate swaps
The below table outlines the movements in fair value among the hedging reserve, comprehensive income and the income
statement during the year.
Interest-rate swaps
Carrying value of derivative financial instruments liability
Carrying value of derivative financial instruments asset
Change in fair value of derivatives where hedge accounting was applied
Change in fair value of discontinued derivatives and derivatives taken through P&L
Hedge gains recognised in comprehensive income in respect of continuing hedges prior to
ineffectiveness
Hedge gains recognised in P&L in respect of hedges held at fair value through P&L
Transaction proceeds received in respect of terminated hedges (net of termination fees)
Hedge ineffectiveness
Amortisation to P&L of cashflow hedge reserve relating to discontinued hedge relationship
Hedging reserve balance in respect of continuing hedges
Hedging reserve balance in respect of discontinued hedges
Hedging reserve
Opening
Hedging gains recognised in comprehensive income
Hedge ineffectiveness reclassified from the reserve to P&L in respect of terminated swaps
Hedge ineffectiveness reclassified from the reserve to P&L in respect of continuing hedges
Amortisation to P&L of cashflow hedge reserve relating to discontinued hedge relationships
Deferred tax posted to comprehensive income
Closing
30 July
2023
£000
(78)
11,944
1,147
(48,617)
(50,819)
(71,124)
169,413
(13,290)
(13,310)
346
(32,127)
£000
(13,617)
(50,819)
13,290
-
13,310
6,055
(31,781)
31 July
2022
£000
(2,031)
61,367
48,494
48,485
(48,452)
(48,527)
-
(8,134)
3,802
(14,516)
899
£000
19,452
(48,452)
-
8,134
(3,802)
11,051
(13,617)
At the beginning of the reporting period, the company had eight hedge relationships, each of which held several interest-rate
swaps. Hedge relationships refer to interest-rate swaps entered into at the same time. Hedge accounting was applied to hedge
relationships one to seven from inception. The following changes have taken place during the 52 weeks ended 30 July 2023:
On 14 October 2022, the company terminated the majority of its interest-rate swaps, except five individual interest-rate swaps
sitting between two of its hedge relationships. On termination, the company received a cash inflow of £169,413,000, being
proceeds less termination fees. Those terminated interest-rate swaps previously subject to hedge accounting have been treated
as discontinued and an assessment made, as detailed below, to determine whether the hedged future cash flows will still occur.
The fair value relating to terminated swaps, that had previously been recognised in OCI, is recycled to the P&L in line with the
rate at which hedged future cash flows occur.
The hedges terminated are as follows:
Hedge relationship two, designatied for hedge accounting, contained six interest-rate swaps which were all terminated, two
of which had been previously discontinued from hedge accounting through novations. Hedge relationship three contained
five interest-rate swaps, one of which had been previously discontinued through novation. These interest-rate swaps were
previously hedge accounted for – and the future hedged cash flows are still expected to occur. The fair value in OCI was
crystallised at termination and will be recycled to the P&L, in line with the future expected cash flows.
Hedge relationship five contained one interest-rate swap. This designated hedge relationship was partially discontinued as
forecasts indicate that not all hedge cash flows will occur. The fair value continues to be recycled from OCI to the P&L, in
line with future expected cash flows.
Hedge relationships six and seven each contained one interest-rate swap. These designated hedge relationships were
previously discontinued in full due to no longer having any exposure against the hedged item. Any fair value movements
were previously recognised in the P&L.
Hedge relationship eight was not hedge accounted for from inception. Any fair value movements were previously
recognised in the P&L. This hedge relationship was sold post year end – please refer to note 28.
Hedge ineffectiveness of £13.3 million has arisen in the 52 weeks ended 30 July 2023 relating to the above terminated hedge
relationships. Previously, hedge ineffectiveness has arisen due to a change in the future borrowing strategy which has resulted
in the company no longer achieving a hedge ratio of 1:1 (2022: £8.1 million). The hypothetical derivative method was adopted to
assess hedge ineffectiveness.
The two hedge relationships with active swaps remaining had previously been designated for hedge accounting:
Hedge relationship one contained four interest-rate swaps, all of which have remained active. Previously, the designated
hedge relationship had been partially discontinued from hedge accounting, as two of these interest-rate swaps had been
novated. The remaining two interest-rate swaps will be designated until maturity on 31 July 2023, as future cash flows are
still expected to occur.
Hedge relationship four had two of its three interest-rate swaps terminated. On 14 October 2022, the maturity date of the
remaining interest-rate swap was amended from 30 June 2028 to 31 July 2023. As a result of the above, the hedge has
been fully discontinued, given that the critical terms have materially changed. The fair value of this hedge continues to be
recycled from OCI to the P&L, in line with future expected cash flows.
J D WETHERSPOON PLC
ANNUAL REPORT AND FINANCIAL STATEMENTS 2023
35
NOTES TO THE FINANCIAL STATEMENTS
22. Financial instruments (continued)
On 24 October 2022, three new interest-rate swaps were enacted under one new hedge relationship (hedge relationship nine),
with a total nominal value of £400 million; on 28 April 2023, one new interest-rate swap was enacted under one hedge
relationship (hedge relationship 10), with a total nominal value of £400 million. Management elected not to apply hedge
accounting to the hedge relationships from inception, as they did not meet the company’s risk strategy. Both hedge relationships
were sold post year end – please refer to note 28.
The liability of £78,000 is made up of £65,000 relating to hedge relationships where hedge accounting has been applied. The
remaining £13,000 liability and £11.9 million asset relate to hedge relationships where hedge accounting is not applied.
Remaining in the hedging reserve is £0.3 million of fair value relating to continuing hedges (2022: -£14.5 million) and -£32
million of fair value relating to hedges which have been derecognised/discontinued (2022: £0.9 million).
23. Leases
The following amounts, relating to lease cashflows, were debited/credited to the income statement during the period.
Rent cash flow analysis
Cash outflows relating to capitalised leases
Expense relating to short term leases
Expense relating to variable element of concessions
Total rent cash outflows for period
Cash inflows relating to capitalised leases
Income relating to lessor sites
Total rent cash Inflows for period
30 July
2023
£000
49,994
504
16,980
67,478
(2,017)
(2,506)
(4,523)
31 July
2022
£000
57,630
10
8,799
66,439
(1,852)
(2,001)
(3,853)
The balance sheet shows the following amounts relating to leases. These have been reconciled in sections (a) to (d) below:
Balance sheet position
Right-of-use asset1 (a)
Non-current lease asset
Current lease assets
Total lease assets2 (b) (d)
Current lease liability
Non-current lease liability
Total lease liability1 (c) (d)
30 July
2023
£000
387,353
8,450
1,361
9,811
(51,486)
(391,794)
(443,280)
31 July
2022
£000
419,416
9,264
2,001
11,265
(48,471)
(421,583)
(470,054)
1Right-of-use assets and lease liabilities relate to leasehold properties occupied by J D Wetherspoon.
2Lease assets relate to leasehold properties sublet by J D Wetherspoon.
36
ANNUAL REPORT AND FINANCIAL STATEMENTS 2023
J D WETHERSPOON PLC
NOTES TO THE FINANCIAL STATEMENTS
23. Leases (continued)
(a) Right-of-use assets
Set out below are the carrying amounts of right-of-use assets recognised and the movements during the period:
Cost
As at 31 July 2022
Additions
Remeasurement
Freehold reversions transferred to property, plant and equipment
Disposals and derecognised leases
At 30 July 2023
Accumulated depreciation and impairment:
As at 31 July 2022
Provided during the period
Exchange differences
Impairment loss
Freehold reversions transferred to property, plant and equipment
Remeasurement
Disposals and derecognised leases
At 30 July 2023
Net book amount at 30 July 2023
Net book amount at 31 July 2022
£000
557,262
17,043
(8,160)
(5,997)
(3,146)
557,002
(137,846)
(37,556)
68
(3,377)
1,120
6,357
1,585
(169,649)
387,353
419,416
During the period, additions related to nine new lease contracts that were signed. 51 leases were remeasured as a result of
changes in the agreed payments under the lease contracts and changes in the lease terms. Exchange differences occur as a
result of translating the capitalised leases in the Republic of Ireland. Five freehold reversions took place in the year while
disposals and derecognised leases totalled six. In the year ended 31 July 2022, lease additions totalled £4,458,000 and
depreciation £42,291,000.
(b) Sublet properties
As at 25 July 2021
Remeasurements of leases
Interest due in period
Total cash inflow for leases in period
As at 31 July 2022
Remeasurements of leases
Interest due in period
Total cash inflow for leases in period
At 30 July 2023
£000
11,528
1,160
428
(1,851)
11,265
223
340
(2,017)
9,811
Set out below are the carrying amounts of the lease assets recognised and the movement during the period. The company
sublets several of its leases, with lease assets being the capitalised future rent receivable from sublet sites.
The interest payable and receivable shown in the table above is the interest element of the payments made and received in the
period. These amounts differ from the lease interest charged/credited to the income statement in the period – see note 6. The
amounts charged/credited to the income statement in the period will also include amounts due, yet not paid, in the period. The
incremental borrowing rate applied to lease liabilities and assets was 1.9 – 4.1%, depending on the lease’s length.
J D WETHERSPOON PLC
ANNUAL REPORT AND FINANCIAL STATEMENTS 2023
37
NOTES TO THE FINANCIAL STATEMENTS
23. Leases (continued)
(c) Lease liability
Set out below are the carrying amounts of lease liabilities and the movements during the period:
Lease liability as at commencement of period
Additions
Freehold reversions transfered to property, plant and equipment
Remeasurements of leases
Disposals
Cancelled principal payments (due to expedient)
Exchange differences
Lease liabilities before payments
Interest payable in period:
Interest expense within period (discounting element)
Cancelled interest expense (due to expedient)
Total cash outflow for leases in period:
Lease payment commitments for period
Cancelled payment commitments (due to expedient)
30 July
2023
£000
(470,054)
(16,820)
5,333
1.676
2,969
–
(84)
31 July
2022
£000
(523,815)
(4,458)
15,740
(6,742)
4,514
4,726
(67)
(476,980)
(510,102)
(16,294)
–
(16,294)
49,994
–
49,994
(18,083)
501
(17,582)
62,857
(5,227)
57,630
Net principal payments
33,700
40,048
Lease liability as at closing of period
(443,280)
(470,054)
In the prior year the company applied the rent concessions practical expedient during the financial period, allowing reductions in
rent payments due on or before June 2022 to be credited to the income statement, rather than requiring remeasurement of the
lease.
In the prior year included within remeasurement of leases are principal payments of £4,726,000 (2021: £10,993,000) credited to
the income statement, and a reduction in associated interest charges of £501,000 (2021: £2,918,000) resulting in a total credit
to the income statement of £5,227,000 (2021: £13,911,000) which was disclosed in cash generated from operations, note 9.
Future rental payments, up to the end of the lease, are capitalised, including any agreed increases.
Future rent payments could change as a result of open-market rent reviews or options being exercised to terminate a lease
early. Any changes in the minimum unavoidable lease payments will be included as a remeasurement of the lease liability. The
accounting policies (page 44) further describe the policy in relation to the termination of leases.
38
ANNUAL REPORT AND FINANCIAL STATEMENTS 2023
J D WETHERSPOON PLC
NOTES TO THE FINANCIAL STATEMENTS
23. Leases (continued)
(d) Lease maturity profile
Set out below are the remaining maturities (period between the balance sheet date and the end of the lease) of the lease
liabilities and lease assets, which are undiscounted:
Within one year
Between one and two years
Between two and three years
Between three and four years
Between four and five years
After five years
Lease commitments payable / receviable
Discounting
Lease liability / lease asset
24. Government support
Local government grants (note 4)
Employee support grants (note 5)
Lease liabilities
Lease assets
30 July
31 July
30 July
31 July
2023
£000
2022
£000
2023
£000
2022
£000
51,486
48,471
(1,361)
2,001
46,107
48,029
(1,169)
1,332
43,472
46,233
(1,157)
1,140
43,028
43,777
(1,154)
1,128
38,427
43,031
(975)
1,124
363,399
382,369
(5,668)
6,518
585,919
611,910
(11,484)
13,243
(142,639)
(141,856)
1,672
(1,978)
443,280
470,054
(9,812)
11,265
30 July
31 July
2023
£000
(54)
(768)
(822)
2022
£000
(1,443)
(4,473)
(5,916)
The government support in the table above should be viewed in context of the contribution to the economy as on page 5.
Local government grants
From 9 September 2020, the UK Government made available several grants to support those businesses adversely affected by
the pandemic. Applications were made to the respective local authorities in line with the eligibility criteria for each scheme. The
Irish Government introduced a similar grant (COVID Restrictions Support Scheme), for which the company applied for centrally.
The grants were treated as separately disclosed.
Employee support grants
The coronavirus job retention scheme,(CJRS) and equivalent Republic of Ireland schemes, were introduced at the beginning of
the pandemic to support companies in retaining employees, in the form of grants to cover a proportion of the wages and salaries
of furloughed staff. The claims have been made weekly since April 2020 for weekly paid employees and monthly for salaried
employees. These are accounted for as a credit to wages and salaries within employee costs.
25. Capital commitments
At 30 July 2023, the company had £4.7 million (2022: £9.8 million) of capital commitments, relating to the purchase of three
(2022: nine) sites, for which no provision had been made in respect of property, plant and equipment.
The company had some other sites in the property pipeline; however, any legal commitment is contingent on planning and
licensing. Therefore, there are no commitments at the balance sheet date.
J D WETHERSPOON PLC
ANNUAL REPORT AND FINANCIAL STATEMENTS 2023
39
NOTES TO THE FINANCIAL STATEMENTS
26. Related party disclosures
J D Wetherspoon is the owner of the share capital of the following companies:
Country of incorporation
Ownership
Status
Company name
J D Wetherspoon (Scot) Limited
Scotland
J D Wetherspoon Property Holdings Limited
England
Moon and Spoon Limited
Moon and Stars Limited
Moon on the Hill Limited
Moorsom & Co Limited
Sylvan Moon Limited
Checkline House (Head Lease) Limited
England
England
England
England
England
Wales
Wholly owned
Wholly owned
Wholly owned
Wholly owned
Wholly owned
Wholly owned
Wholly owned
Wholly owned
Dormant
Dormant
Dormant
Dormant
Dormant
Dormant
Dormant
Dormant
All of these companies are dormant and contain no assets or liabilities and are, therefore, immaterial. As a result, consolidated
accounts have not been produced. The company has an overseas branch in the Republic of Ireland.
The registered office of all of the above companies is the same as that for J D Wetherspoon plc, as disclosed on the final page
of these accounts.
As required by IAS 24, the following information is disclosed about key management compensation.
Key management compensation
Short-term employee benefits
Post-employment pension benefits
Share-based payment
2023
£000
2022
£000
3,305
2,950
335
869
300
611
4,509
3,861
Key management comprises the executive directors, non-executive directors and management board, as detailed on page 63.
For additional information about directors’ emoluments, please refer to the directors’ remuneration report on pages 67-75.
Directors’ interests in employee share plans
Details of the shares held by executive members of the board of directors’ are included in the remuneration report on pages 67-
75 which forms part of these financial statements.
27. Share capital
Balance at 31 July 2022 (audited)
Balance at 30 July 2023 (audited)
Number of
shares
000s
128,750
128,750
Share
capital
£000
2,575
2,575
The total authorised number of 2p ordinary shares is 500,000,000 (2022: 500,000,000). All issued shares are fully paid.
While the memorandum and articles of association allow for preferred, deferred or special rights to attach to ordinary shares, no
shares carried such rights at the balance sheet date.
28. Events after the balance sheet date
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 million from 23 August 2023 through to 6 February 2025 at a rate of
5.665%. On 25 September 2023, the company took out a further interest-rate swap of £400 million from 6 February 2025 to 6
February 2028 at a rate of 4.225%.
On 21 September 2023, the company announced that 11 of its pubs will be put on the market as part of a one-off disposal
programme. Management has concluded this to be a non-adjusting event on the basis that events and conditions arose after
the end of the financial period.
29. Contingent liability
The company is in an on-going contractual dispute with a large supplier. The outcome of the dispute is yet to be determined and
will be resolved by a legal process. Disclosing any further information at this stage about the ongoing contractual dispute, its
financial effect (if any) and uncertainties relating to the amount or timing of any outflow might be prejudicial to the company’s
position.
40
ANNUAL REPORT AND FINANCIAL STATEMENTS 2023
J D WETHERSPOON PLC
ACCOUNTING POLICIES
SECTION 2
Authorisation of financial statements and statement of
compliance with IFRSs
The financial statements of J D Wetherspoon plc
(the ‘Company’) for the 52 weeks ended 30 July 2023
were authorised for issue by the board of directors on
6 October 2023, and the balance sheet was signed
on the board’s behalf by John Hutson and Ben Whitley.
J D Wetherspoon plc is a public limited company,
incorporated and domiciled in England and Wales.
The Company’s ordinary shares are traded on the
London Stock Exchange.
Basis of preparation
The Company’s financial statements have been prepared
in accordance with the UK-adopted international
accounting standards and have been prepared in
accordance with the requirements of the Companies Act
2006.
The financial statements have been prepared on the
going-concern basis, using the historical cost convention,
except for the revaluation of financial instruments.
The principal accounting policies adopted by the Company
are set out on pages 41-46. The accounting policies which
follow set out those policies which apply in preparing the
financial statements for the year ended 30 July 2023.
These policies have been consistently applied to all of the
years presented, unless otherwise stated.
Going concern
The directors have made enquiries into the adequacy of
the Company’s financial resources, through a review of the
Company’s budget and medium-term financial plan,
including capital expenditure plans and cash flow
forecasts. In line with accounting standards, the going
concern assessment period is the 12-months from the date
of approval of these accounts (approximately the end of
quarter 1 of FY25). Given the proximity to the going
concern review period, the Company has also considered
the February 2025 expiry of its current revolving credit
facility in its assessment.
The Company has modelled a ‘base case’ forecast in
which recent momentum of sales, profit and cash flow
growth is sustained. The Company has anticipated within
this forecast 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 debts as they fall due
and operate within its leverage covenants for the going
concern assessment period.
A more cautious but plausible scenario has been analysed,
in which sales for FY24 are in line with
FY23 (ie no sales growth). The Company has reviewed,
and is satisfied with, the mitigating actions
that it could take if such an outcome were to occur. Such
actions could include reducing discretionary
capital expenditure, reducing costs or implementing price
increases. Under this scenario, the Company
would still have sufficient resources to settle liabilities as
they fall due and sensible headroom on its covenants
through the duration of the going concern review period.
The Company has also performed a ‘reverse stress case’
which shows that the Company could withstand a 12%
reduction in 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.
The directors have determined that, over the period of the
going concern assessment, there is not expected to be a
significant impact resulting from climate change.
Following the cessation of a period of lender-agreed
relaxed covenants to 30 July 2023, the Company has
reverted to its original covenant targets and the Company
is confident that these targets will be met in the going
concern assessment period.
As set out in Note 20, the secured Revolving Credit Facility
totalling £875 million of which £630 million was drawn at
30 July 2023, matures in February 2024 (£20 million) and
February 2025 (£855 million).
As the directors believe that the positive trading and cash
flow trends which have been experienced in the period to
30 July 2023 will continue, coupled with increasing
certainty over cost inflation, the Company has chosen not
to formally commence any refinancing exercise as at the
date of these accounts.
Given the Company’s strong financial position and current
trading performance, the directors are
confident that the Company will be able to refinance its
debt facilities when it is required to do so. The Company
has had frequent conversations to date with its
longstanding lending syndicate and advisors.
These discussions have highlighted multiple refinancing
options and very good levels of support. These factors,
combined with the alternative liquidity options available to
the Company, provide the Directors
with appropriate assurance that the prospect of not being
able to refinance is remote and as such
no material uncertainty exists.
After due consideration of the matters set out above,
the directors have satisfied themselves that the Company
will continue in operational existence for the foreseeable
future. For this reason, the Company continues to adopt
the going-concern basis in preparing its financial
statements.
Important judgements
The key judgements made in preparing the financial
statements are detailed below.
Hedging
As set out in note 22, the Company previously hedge
accounted for interest-rate swaps if it met the specified
qualifying criteria outlined by IFRS 9. On 14 October 2022,
J D WETHERSPOON PLC
ANNUAL REPORT AND FINANCIAL STATEMENTS 2023
41
An increase of 0.9% in the WACC would increase the
impairment charge by £4,262,000.
If a previously recognised impairment charge is reversed,
the value of the pub will be increased
to the lower of the book value as if the asset had not been
impaired and the future cash flows which the
pub would generate.
Management continually considers the impact of climate
change, through analysis of pubs at risk of flood, as
outlined in the environmental report on pages 51-53. There
is not expected to be a material risk.
Accounting policies
Segmental reporting
The Company operates predominantly one type of
business (pubs) in the United Kingdom and the Republic of
Ireland. The Company does not separately disclose the
results of the hotel business or Republic of
Ireland trading given the size, sensitive nature and level of
review by the board.
Separately disclosed items
The Company presents, on the face of the income
statement, those items of income and expense which,
because of the nature and magnitude of the event giving
rise to them, merit separate presentation to allow
shareholders to better understand the elements of financial
performance in the year. This helps to facilitate
comparison with previous years and to better assess
trends in financial performance. Impairment charges,
reversals of fixed assets and fair value movements in
interest-rate swaps are reported as
separately disclosed, regardless of magnitude, to provide
consistency of treatment with previous
years and a better understanding for the financial
statement’s users.
Property gains and losses
The Company defines property gains and losses as those
items of income and expenditure which are the result of
owning and leasing assets which are non-recurring in
nature. These include the impairment of fixed assets,
along with the proceeds and costs from the disposal of
assets. These items are presented on the face of the
income statement to more clearly
show the Company’s underlying performance. The
Company does not consider these costs to be operating in
nature.
ACCOUNTING POLICIES
management terminated the majority of its interest rate
swaps. As at 30 July 2023, there are no material
outstanding swaps designated for hedge accounting.
Management makes judgements in forecasting drawdowns
of future borrowings, as well as future interest rates. These
forecasts affect the rate at which the fair value previously
recognised and frozen in other comprehensive income is
recycled to the income statement.
Separately disclosed items
A degree of judgement is required in determining whether
certain transactions merit separate
presentation to allow shareholders to better understand
financial performance in the year, when compared with
that of previous years and trends.
Going concern
As noted above in the going concern section, the
Company’s revolving credit facility matures in February
2025 and therefore the company is approaching a
‘refinancing’. The directors have not yet formally started
the refinancing process and have therefore made a
judgement in determining the ability of the company to
refinance at a future date. The directors have determined
that no material uncertainty exists. The directors have
considered all known economic, sector and political factors
in forming their view and they consider that market
conditions will remain conducive to a successful
refinancing within the available timeframe.
Important estimates
The areas where the Company has made significant
estimates are listed below.
Impairment of property, plant and equipment and right of
use assets
The Company recognised impairment charges of
£35,966,000 (2022: £19,904,000) relating to property,
plant and equipment and £3,377,000 (2022: £3,964,000)
relating to right of use assets. There were impairment
reversals of £5,430,000 (2022: £2,668,000). Impairment
tests are performed at the end of each reporting period,
when there are indicators to do so. Impairments are made
at the higher of future cash flows less carrying value of
assets or fair value less costs to sell. Impairment reversals
are made if future cash flows are higher than the carrying
value of assets and the previous impairments made.
Management exercises judgement in forecasting future
cash flows for each pub. Each pub is treated as a separate
cash generating unit. Cash flows are discounted by the
Company’s weighted average cost of capital (WACC) of
12% (2022: 10.2%). For leasehold pubs, a combination of
both the WACC and the internal borrowing rate (IBR) per
specific lease is used. Both WACC and IBR are
independently calculated. In some instances, management
recognises impairment through obtaining the fair value less
costs of disposal for an individual pub.
Sensitivity analysis has been performed to determine the
theoretical impact on impairment should scenarios occur
which are alternative to those included in the impairment
workings. These sensitivities have been applied to the
properties impaired during the period:
A 23% reduction of year one future cash flows would
increase the impairment charge by £103,000.
42
ANNUAL REPORT AND FINANCIAL STATEMENTS 2023
J D WETHERSPOON PLC
fdfdfds
Fixed assets
Fixed assets include property, plant and equipment,
intangible assets and investment properties’. They are all
stated at cost, less accumulated depreciation and any
impairment in value.
Cost of assets includes acquisition costs, as well as other
directly attributable costs in bringing the asset into use.
Within note 12, 13 and 14: intangible assets and property,
plant and equipment, fixed assets are categorised as:
Asset
category
Freehold
and long-
leasehold
property
Short-
leasehold
property
Equipment,
fixtures and
fittings
Assets
under
construction
Description
Land, buildings
and
structural/building
improvement
assets at freehold
and long-
leasehold pubs.
Structural/building
improvement
assets at
leasehold pubs.
Assets within pubs
including kitchen,
bar and cellar
equipment,
furniture, IT
software and IT
hardware.
Assets at sites
which are not yet
trading and/or
extension works to
existing pubs.
Depreciation policy
(straight line)
The acquisition value
is split 70:30 between
buildings and land.
Buildings are
depreciated over 50
years. Land is not
depreciated.
Depreciated over the
shorter of the lease
period and estimated
useful life.
Depreciated over
three to 10 years.
Assets are not
depreciated until they
are ready for use.
Residual values and useful economic lives are reviewed
and adjusted, if appropriate, at each balance sheet date.
Profits and losses on disposal of fixed assets reflect
the difference between the net selling price and the
carrying amount at the date of disposal and are recognised
in the income statement.
The carrying value of fixed assets is reviewed annually for
impairment, with any impairment losses recognised in the
income statement.
Assets held for sale
Where the value of an asset will be recovered through a
sale transaction, rather than continuing use, the asset is
classified as held for sale. It is the view of management
that the Company is not committed to selling a site until a
contract for sale has been exchanged. Assets held for sale
are valued at the lower of book value and fair value, less
any costs of disposal, and are no longer depreciated.
Inventories
Inventories are stated at the lower of cost and net
realisable value. Cost is calculated on a weighted average
basis, with net realisable value being the estimated selling
price, less any costs of disposal. Provision is made for
obsolete, slow-moving or damaged inventory, where
appropriate.
ACCOUNTING POLICIES
Bar and food inventory is recognised as an expense when
sold. The Company has adjusted its accounting policy
during the year ended 30 July 2023 to expense non-
consumables (e.g. cleaning materials) at the point of use,
rather than the point of receipt by the pub. The change in
accounting policy provides greater clarity over non-
consumable stock holdings within pubs. The total impact in
the year ended 30 July 2023 is an increase in inventory
and profit before tax of £2.9 million.
Provisions
Provisions are recognised when the Company has
a present legal or constructive obligation as a result of a
past event and it is probable that an outflow of resources
will be required to settle the obligation and
a reliable estimate can be made of that obligation’s
amount.
Revenue recognition
Revenue is recognised when bar and food products
are served to customers, after deducting discounts and
sales-based taxes.
Slot/fruit machine sales are recognised as the net
proceeds taken from the machines, after deducting gaming
duty.
Revenue from hotel rooms is recognised when rooms are
occupied and services are provided, after deduction of
discounts and sales-based taxes.
The Company operates a gift card scheme – revenue from
these cards is deferred until the card is redeemed in pubs.
Except for hotel revenue, which is generally received in
advance of occupation, all other payments for goods and
services are received at the point of sale.There are no
significant judgements or estimations made in calculating
and recognising revenue. Revenue is not materially
accrued or deferred between one accounting period and
the next.
Government grants
Monetary and non-monetary resources transferred to the
Company by government, government agencies or similar
bodies are recognised at fair value, when the Company
receives the grant. Grants will be recognised net in the
income statement, on a systematic basis, over the same
period during which the expenses, for which the grant was
intended to compensate, are recognised. See note 24.
Leases
The Company has leases for properties across the UK and
the Republic of Ireland. There are no other material leases
recognised under other IFRS 16 categories.
Lessee accounting
On completion of a contract (the point at which a contract
becomes legally binding), the Company assesses whether
the contract is or contains a lease.
A lease is present where the contract conveys, over a
period of time, the right to control the use of an identified
asset in exchange for a consideration.
The lease liability is measured initially at the present value
of lease payments over the term of the lease which is
J D WETHERSPOON PLC
ANNUAL REPORT AND FINANCIAL STATEMENTS 2023
43
ACCOUNTING POLICIES
determined as the end of the lease, unless the company is
reasonably certain that a break clause or purchase option
will be exercised. These payments are discounted at the
Company’s incremental borrowing rate. For sites at which
rent is payable as a percentage of revenue, the lease
liability is measured at the present value of the
unavoidable minimum guarantee payments over the term
of the lease. While any amounts above this minimum
amount will be expensed to the income statement.
Where a lease is identified, the Company recognises a
right-of-use asset and a corresponding lease liability. The
lease assets are presented as a separate line in
the balance sheet. Leases with terms of under one year
are not capitalised.
Lessor accounting
Leases, where the lessor retains substantially all of the
asset’s risks and benefits of ownership, are classified as
operating leases. If the operating lease is subject to fixed
uplifts over the term of the lease, rental payments are
charged to the income statement on a straight-line basis,
over the period of the lease, in line with adopted
accounting standards. If the operating lease is subject to
open-market rents, rental payments are charged at the
prevailing rates.
Leases where the lessor transfers substantially all of the
asset’s risks and benefits of ownership are classified as
lease assets. This occurs when the Company sublets a
leasehold site. The lease asset is measured initially at the
present value of lease receipts, discounted at the
Company’s incremental borrowing rate. The lease assets
are presented as a separate line in the balance sheet.
Modifications
When the Company agrees to a term extension or there is
a change in consideration that is not part of the original
terms of the lease, the lease liability or asset will be
remeasured on that date; the resulting increase or
decrease to the asset or liability will be accounted for with
an offsetting adjustment to the right-of-use asset.
Modifications are completed at the new incremental
borrowing rate. Any adjustment which reduces the right-of-
use asset below zero will be credited to the income
statement.
Right-of-use asset
The right-of-use asset comprises the initial measurement
of the corresponding lease liability, any initial direct costs
and the cost of any obligation to restore the site at the end
of the lease. They are subsequently measured at cost less
accumulated
depreciation and impairment losses. Right-of-use assets
are depreciated over the term of the lease.
Termination and break of leases
Where the Company notifies the landlord to purchase the
freehold of a leasehold site, the lease is derecognised at a
nil gain/nil loss. Where the Company notifies the landlord
of the intention to terminate (break) a lease early, the lease
is remeasured.
Borrowing costs
Borrowing costs are recognised as an expense
in the period in which they are incurred, unless
the requirements by the adopted accounting standards for
the capitalisation of borrowing costs relating
to assets are met. For the purpose of cash flow reporting,
interest paid and received is considered
to be operating cash flows.
Income taxes
Current tax assets and liabilities are measured at the
amount expected to be recovered from, or paid to, the
taxation authorities, based on tax rates and laws which are
enacted or substantively enacted by the balance sheet
date.
Deferred income tax is recognised on all temporary
differences arising between the tax bases of assets and
liabilities and their carrying amounts in the financial
statements, with the following exceptions:
Where the temporary difference arises from an
asset or liability in a transaction which, at the time of the
transaction, affects neither accounting nor
taxable profit or loss.
Deferred income tax assets are recognised only to the
extent that it is probable that taxable profit will be available
against which the deductible temporary differences,
carried-forward tax credits or tax losses can be utilised.
Deferred income tax assets and liabilities are measured at
the tax rates which are expected to apply when the related
asset is realised or liability settled, based on tax rates and
laws enacted or substantively enacted at the balance
sheet date.
Income tax is charged or credited directly to the
income statement, comprehensive income or equity. The
income tax charged or credited will follow the accounting
treatment of the underlying item which has given rise to the
income tax charged or credited.
Financial instruments
Financial assets and liabilities are recognised on the date
on which the Company becomes party to the contractual
provisions of the instrument giving rise to the asset or
liability.
Financial assets held at amortised cost
Financial assets held at amortised cost are non-derivative
financial assets which are held within a business model
where the objective is to collect the contractual cash flow
at the same time as the contractual terms give rise to cash
flows which are solely payments of principal and interest.
They are included in current assets, except for maturities
greater than 12 months after the balance sheet date.
These are classified as non-current assets.
Other receivables
Other receivables are recognised initially at transaction
value and carried at amortised cost less any expected
credit losses. The Company has a small number of
receivables at any one time; these are generally with
companies with which the Company has an established
trading relationship.
Cash and cash equivalents
Cash and short-term deposits in the balance sheet
comprise cash at bank and in hand and short-term
44
ANNUAL REPORT AND FINANCIAL STATEMENTS 2023
J D WETHERSPOON PLC
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deposits. For the purpose of the cash flow statement, cash
and cash equivalents comprise cash and short-term
deposits as defined above. Bank overdrafts are
shown within current financial liabilities on the balance
sheet. Cash and cash equivalents include recognition of
amounts for cash in transit, including
electronic card payments not yet receipted as these are
highly liquid and low credit risk.
Credit risk
Credit risk losses arise when debtors fail to pay their
obligation to the Company. The Company assesses credit
risk, based on historic experience. The Company has no
significant history of non-payment; as a result, the
expected credit losses on financial assets are not material.
Financial liabilities
The Company classifies its financial liabilities as other
financial liabilities. These are measured at fair value on
initial recognition and subsequently measured at amortised
cost, using the effective-interest method.
Trade and other payables
These are recognised initially at fair value and
subsequently at amortised cost, using the effective-interest
method.
Bank loans and borrowings
Interest-bearing bank loans and other borrowings are
recorded initially at fair value of consideration received, net
of direct issue costs. Borrowings are subsequently
recorded at amortised cost, with any difference between
the amount recorded initially and the redemption value
recognised in the income statement over the period of the
bank loans, using the effective-
interest method.
Bank loans and loan notes are classified as current
liabilities, unless the Company has an unconditional right
to defer settlement of the liability for at least
12 months after the balance sheet date.
Derivative financial instruments
and hedging activities
Derivative financial instruments used by the
Company are stated at fair value on initial recognition and
at subsequent balance sheet dates.
Hedge accounting is used to mitigate the Company’s
exposure to variable interest rate risks on borrowings.
Derivatives qualify for hedge accounting only where, at
inception, there is formal designation and documentation
of the hedging relationship, there is an economic
relationship between the item being hedged and the
hedging derivative and credit risk does not dominate the
economic relationship.
The Company classifies certain interest-rate swap
derivatives as cash flow hedges, on the basis they hedge
the exposure to variable cash flows. A hedging ratio of 1:1
is adopted between the interest-rate swaps and the
Company’s floating-rate borrowings, meaning that floating
interest rates paid should be identical to those amounts
received for a given amount of borrowings.
The Company tests hedge effectiveness prospectively, at
reporting periods, using the hypothetical derivative method
and compares the changes in the fair value of the hedging
ACCOUNTING POLICIES
instrument with those in the fair value of the hedged item
attributable to the hedged risk. As disclosed in note 22,
there was one immaterial hedge relationship designated
for hedge accounting. For those swaps terminated, an
assessment is made to determine the future cashflows of
the hedged item to determine the amount to be recycled
from other comprehensive income to the income
statement.
Hedges could be deemed ineffective if the:
Period over which the borrowings were drawn were
changed. This could result in the borrowings being made
at a different floating rate than the interest-rate swap.
Gross amount of borrowings were less than the value
swapped.
Impact of LIBOR reform were to cause a mismatch
between the interest rate of the swaps and that of the
Company’s debt.
The effective element of any gain or loss from remeasuring
the derivative designated as the hedging instrument is
recognised in other comprehensive income with the
ineffective element recognised immediately in the income
statement.
Hedge accounting is discontinued when the hedge expires,
is sold, terminated or no longer meets the Company’s risk
management objective.
Share capital
Ordinary shares are classified as equity. Incremental costs
directly attributable to the issue of new shares or options
are shown in equity as a deduction, net of tax, from the
proceeds.
When the Company repurchases its own shares, the cost
of the shares purchased and associated transaction costs
are taken directly to equity and deducted from retained
earnings. The nominal value of shares purchased is
transferred from share capital to the capital redemption
reserve.
Foreign currencies
Transactions denominated in foreign currencies
are recorded at the rates of exchange prevailing
at the transaction date. Monetary assets and liabilities are
translated at year-end exchange rates, with the resulting
exchange differences taken to the income statement.
The Irish branch’s results are translated at the average
exchange rate for the reporting period; the balance sheet
is translated at the year-end exchange rate. Resulting
exchange differences are recognised in comprehensive
income.
Revaluation gains and losses on the long-term financing of
the Irish branch are recognised in comprehensive income.
Retirement benefits
Contributions to personal pension schemes are recognised
in the income statement in the period in which they fall
due. All contributions are in respect of
a defined contribution scheme. Once the contributions
have been paid, the Company has no future payment
obligations.
J D WETHERSPOON PLC
ANNUAL REPORT AND FINANCIAL STATEMENTS 2023
45
Alternative performance measures (APMs)
The Company uses several alternative performance
measures (APM’s) throughout the annual report and
accounts which are not defined by International Financial
Reporting Standards (IFRS). APMs are used in
conjunction with IFRS measures in reporting financial
information and assessing performance, but are not given
greater prominence. Management believes that APMs
provide a more effective comparison of performance from
one period to another. The APMs used have been defined
below, alongside reconciliations to IFRS measures:
Free cash flow - the calculation of free cash flow is
based on the net cash generated by business activities
and available for investment in new pub developments and
extensions to current pubs, after funding interest,
corporation tax, lease principal payments, loan issue costs,
all reinvestment in information technology, head office and
pubs trading at the start of the period (excluding
extensions) and the purchase of own shares under the
employee share incentive plan. See reconciliation on page
10.
Like for like – compares year on year performance of
pubs and hotels which were trading in the equivalent
weeks in both FY23 and FY22.
Before separately disclosed items – this measure
excludes separately disclosed items, which are presented
separately to allow shareholders to better understand
financial performance in the year, when compared with
that of previous years and trends. See separately
disclosed items reconciliation on page 15.
Net debt excluding derivatives and lease liabilities –
excluding both derivatives and lease liabilities allows
shareholders to understand the core debt held by the
Company. A reconciliation is provided on page 24.
ACCOUNTING POLICIES
Dividends
Dividends recommended by the board, but unpaid at each
period end, are not recognised in the financial statements
until they are paid (in the case of the interim dividend) or
approved by shareholders at the annual general meeting
(in the case of the final dividend).
Changes in net debt
These are both the cash and non-cash movements
of the year, including movements in asset-financing,
borrowings, cash and cash equivalents.
Share-based charges
The Company has an employee share incentive plan
which awards shares to qualifying employees; there is also
a deferred bonus scheme which awards shares to
directors and senior managers, subject to specific
performance criteria.
The cost of the awards in respect of these plans is
measured by reference to the fair value at the date at
which they are granted and is amortised as an expense
over the vesting period. In assessing the initial fair value,
no account is taken of any vesting conditions, other than
market conditions linked to the price of the shares of the
Company.
The Company currently has no other share-based
transactions.
Shares purchased for share-based payment awards are
held in equity at historic cost, until the awards vest, when
they are transferred to employees.
New accounting standards adopted in the year
None
New accounting standards in issue but not yet
effective
New accounting standards and interpretations which are in
issue but not yet effective are listed below. These new
accounting standards are not expected to have a material
impact. The Company has chosen not to adopt these
early:
Disclosure of Accounting Policies (Amendments to IAS1
and IFRS Practice Statement 2)
Classification of Liabilities as Current or Non-current
(IAS 1)
Definition of Accounting Estimates (Amendments to
IAS8)
Deferred Tax related to Assets and Liabilities arising
from a Single Transaction (Amendments to IAS12)
Plant and Equipment – Proceeds before Intended Use
(Amendments to IAS16)
Onerous Contracts – Cost of Fulfilling a contract
(Amendments to IAS37)
Annual improvements to IFRS standards 2018-2020
cycle (Amendments to IFRS 1 First-time Adoption of
International Financial Reporting Standards, IFRS 9
Financial Instruments, IFRS 16 Leases, and IAS 41
Agriculture)
46
ANNUAL REPORT AND FINANCIAL STATEMENTS 2023
J D WETHERSPOON PLC
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STRATEGIC REPORT
Strategy
The Company’s strategy is to seek a return on capital in
excess of the cost of the capital which will provide funds
for developments, dividends and reinvestment.
Business model
The Company operates pubs in the UK and the Republic
of Ireland and aims to sell high-quality products, at
reasonable prices, in well-maintained premises.
Business review and future trends
A review of the Company’s business and the
key measures of its performance, sometimes called key
performance indicators (KPIs), can be found in the
chairman’s statement under the financial performance
section. The chairman’s statement also discusses those
trends and factors likely to affect the future development,
and performance of the Company.
Social matters
Wetherspoon provides jobs for over 42,000 people, paying
a reasonable percentage of its profits as bonus for those
working in our pubs and head office, training large
numbers of staff and paying a significant percentage of our
sales as taxes to the government.
Further information about these policies are published on:
jdwetherspoon.com
Human rights
The Company is committed to respecting human rights
across our business by complying with all relevant laws
and regulations. The Company prohibits any form of
discrimination, forced, trafficked or child labour and is
committed to safe and healthy working conditions for all
individuals, whether employed by the Company directly or
by a supplier.
Legal and ethical conduct
The Company has comprehensive measures to meet its
statutory requirements across all areas of its operation and
also those expected by our customers and employees, as
necessary, for the long-term success of the business.
Risks in this area can occur
from corruption, bribery and human rights abuses,
including discrimination, harassment and bullying.
The Company has training programmes for all employees.
It also has a documented whistleblowing programme,
written processes and procedures and a supply chain audit
programme.
Employees
All employees are encouraged to participate in the
business, some examples of how this is achieved being:
Several Company initiatives to encourage
employees to suggest small and continuous improvements
to the running of their pubs
‘Tell Tim’ suggestion scheme for all employees allowing
them to be involved in the decision-making process for key
business issues.
Pub managers, area managers and other pub
employees attending and contributing to weekly operations
meetings, hosted by the chairman or chief executive
Area managers invited to meet the board of directors
(before each board meeting)
Regular liaison meetings held with employees, at all
levels, to gain feedback on aspects of the business and
ideas for improvement
Directors and senior management completing regular
visits to pubs
The appointment last year of two employee directors to
the full board of the Company and two associate employee
directors
Weekly e-mail from the chief executive to all employees
Head-office staff completing regular pub and kitchen
shifts (both front of house and in the kitchen) to help in
understanding any staff/customer issues
Employee diversity
The table below shows the breakdown of directors, senior
managers and employees at the end of the period.
Directors
Senior managers
All employees
Male
7
539
20,725
Female
2
361
22,522
Section 172 statement
Section 172 of the Companies Act 2006 requires that
directors of a Company act in good faith to promote the
success of the Company for all stakeholders.
In the period, all directors of the Company have acted in a
manner most likely to achieve the long-term success of the
business for its shareholders, employees, customers,
suppliers and the wider community in which the Company
operates.
In the period, the directors have made decisions in a
number of areas, often after comprehensive consultation
with pub teams and the wider management teams.
Examples include the various pricing and promotion
decisions that have been taken, the timing around hedging
utility costs, the investment decisions relating to new and
existing pubs, and the extent to which pay rates were
increased throughout the year. Further risks have been
outlined within the risk section on pages 49-50.
Examples of the Company’s engagement with
stakeholders are:
Wherever practical, directors consult widely among the
Company’s employees, about decisions made about the
Company. The directors believe that wide consultation and
a management team with extensive industry experience
are likely to result in the best long-term decisions. The
Company’s senior management team regularly engages
with pub-based employees through meetings and pub
visits.
Most of the Company’s employees are customers and
many are shareholders. The Company encourages its
employees to feed back their views, as well as those of
their friends and family. The Company operates a
suggestion scheme through the “Tell Tim” scheme
whereby any employee can send in ideas and/or make a
recommendation for the improvement of the Company.
J D WETHERSPOON PLC
ANNUAL REPORT AND FINANCIAL STATEMENTS 2023
47
STRATEGIC REPORT
Details of the Company’s employment policy are
disclosed on page 81. Information on employee
engagement can be found above.
Where possible, the Company forms long-term
relationships with suppliers, so that all parties have a more
certain environment in which to operate. The Company’s
responsible retailing policy is published on the website.
The Company communicates with its customers through
its website and Wetherspoon News.
Information on human rights, environmental and social
matters, food safety, cyber security and reputational
matters is provided in this strategic report, while further
information is published on our website.
Information on shareholder engagement is provided in
the corporate governance report. Questions and answers
from the interim results investor roadshow (March 2022)
were published on the Company’s website and the London
Stock Exchange Regulatory News Service (RNS).
Non-financial and sustainability information statement
The climate-related risks and opportunities of the company
are outlined on pages 51-53, and have been considered as
part of the going concern review. All other required
information is included in relevant sections of the Annual
Report and accounts.
48
ANNUAL REPORT AND FINANCIAL STATEMENTS 2023
J D WETHERSPOON PLC
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STRATEGIC REPORT
Principal risks and uncertainties facing the company
In the course of normal business, the company continually assesses significant risks, categorised based on impact and
likelihood. The following risks, while not intended to be a comprehensive analysis, constitute (in the opinion of the board) the
principal risks and uncertainties currently facing the company
Business strategy
Supply chain disruption
.
Risk’s description
Being unable to supply our pubs with products,
when required, at a competitive price.
Risk’s description
The company is aware that, in operating in a
consumer-facing business, its business reputation,
built over many years, can be damaged in a
significantly shorter time frame. The company
faces further risks through the competitive nature
of the industry in terms of ‘staying in fashion’.
Changes during the year
The industry remains highly competitive.
Changing consumer habits, owing to cost-of-living
crisis.
Residual risk and impact on the business
Failure to execute the right strategy could damage reputation
and affect profits.
Challenging incorrect publications about the company.
Staying relevant through innovation of offerings in pubs.
Risk’s mitigation
Monitor main competitors’ offerings and pricing.
Regular management review of strategic positioning
and performance.
Health and safety
Risk’s description
The safety of our customers, employees and
contractors is at risk if correct processes are not
followed in relation to food-handling, equipment
usage, maintaining a safe working environment
and the use of hazardous substances.
Changes during the year
Inflationary pressures across the sector.
Availability of products owing to disruptions in global
supply chains.
Residual risk and impact on the business
Reduced profits resulting from higher product prices.
The company’s reputation could be damaged if menu items
were unavailable. Negative consumer reaction to increasing
prices.
Risk’s mitigation
The company works closely with supply chain members
to maintain product availability.
Dual supply of key menu items.
The company conducts audits of its supply chain.
Long-term contracts with suppliers provide certainty of
supply and low pricing.
Legal and regulatory
Risk’s description
Failure to comply with legislative requirements
and taxation policies.
Changes during the year
There have been no material changes during the year.
Changes during the year
Alcohol duty reform.
Minimum wage rate changes.
Residual risk and impact on the business
Ineffective health and safety practices could result in harm to
individuals, prosecution, closure of pubs and reputational
damage.
Risk’s mitigation
Focus on food hygiene ratings.
Internal audits are performed.
All employees are provided with training in health and
safety matters.
Pubs are provided with the necessary resources and
support to ensure that safe working practices are
maintained.
Buildings are maintained to ensure a safe operating
environment.
Residual risk and impact on the business
Non-compliance could result in financial penalties, criminal
prosecution and reputational damage.
Risk’s mitigation
In-house legal team have regular meetings with the
management team.
Continued professional development through training,
completion of qualifications and communication with
third-party specialists.
J D WETHERSPOON PLC
ANNUAL REPORT AND FINANCIAL STATEMENTS 2023
49
STRATEGIC REPORT
Technology, cyber security, data security
Risk’s description
Loss of key information or business disruption
through system failures, cyber-attacks and data
breaches.
Changes during the year
There have been no material changes during the year.
Residual risk and impact on the business
Any prolonged or significant failure of these systems could
pose a risk to trading, eg reduced profits, reputational
damage and loss of personal information.
Risk’s mitigation
Ensuring appropriate technologies, policies and
procedures, including disaster-recovery plans, system
backups and external hardware and software.
The company continually assesses the risks posed by
cyber threats and makes changes to its technologies,
policies and procedures to mitigate identified risks.
Business continuity, crisis management and disaster
recovery
Risk’s description
Unexpected events such as fires, floods and
pandemics will affect the company’s ability to
operate.
Changes during the year
There have been no material changes during the year.
Residual risk and impact on the business
These risks are outside of the company’s control, therefore
without sufficient disaster-recovery plans, the impact could
be material.
Risk’s mitigation
Mitigating actions taken by the company will depend on
the nature of the event, how much forewarning the
company has of an event and the reaction of the wider
economic community.
Comprehensive disaster-recovery plans are in place
which seek to minimise such incidents’ impact.
Effective and efficient communication platforms to send
messages to the workforce population.
People
Risk’s description
Not attracting the right people with
sufficient experience to ensure the company’s
future success.
Changes during the year
The company is fully staffed; recruitment pressures
have eased during the year.
Managerial length of service has increased.
Residual risk and impact on the business
Failure to retain or attract the right people would lead a
diminished customer experience, higher recruitment costs
and lower productivity levels.
Risk’s mitigation
The company offers a comprehensive remuneration
package (eg staff discounts, bonuses and free shares),
as well as genuine opportunities to progress within
the business.
The company’s policy is to recruit from within,
where possible.
Liquidity and financing
Risk’s description
Inability to maintain cash flows to meet the needs
and/or the debt covenants of the business.
Changes during the year
Economic pressures due to high levels of inflation and
increased interest rates.
Reduced financial performance following the effects of
the COVID-19 pandemic.
Residual risk and impact on the business
Insufficient funding or breaches of financing arrangements
could affect the company’s ability to trade.
Risk’s mitigation
Sales, profitability, debt requirements and cash flow are
reviewed weekly by the management team.
Hedges in place relating to interest rates and energy
supply.
Maintenance of sufficient levels of cash headroom to
sustain periods of economic uncertainty.
Climate change risk discussed on pages 51-53.
Risk change year on year:
increased
unchanged
decreased
By order of the board
Nigel Connor
Company Secretary
6 October 2023
50
ANNUAL REPORT AND FINANCIAL STATEMENTS 2023
J D WETHERSPOON PLC
STRATEGIC REPORT – ENVIRONMENTAL MATTERS
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J D Wetherspoon recognises the risk of climate change and is committed to incorporating the recommendations outlined by the
Task Force on Climate-related Financial Disclosure (TCFD).
This report outlines the assessment performed by management in establishing the key climate-related risks and opportunities to
the business identified to date, split by the four TCFD pillars, as described below. Management deems the below disclosure to
be compliant with TCFD’s recommendations.
1). Governance
a. Describe the board’s oversight of climate-
related risks and opportunities.
b. Describe management’s role in assessing and
managing climate-related risks and opportunities.
3). Strategy
a. Describe the climate-related risks and
opportunities the organisation has identified over
the short, medium, and long term.
b. Describe the impact of climate-related risks and
opportunities on the organisation’s businesses,
strategy, and financial planning.
c. Describe the resilience of the organisation’s
strategy, taking into consideration different
climate-related scenarios, including a 2°C or lower
scenario.
2). Risk management
a. Describe the organisation’s processes for identifying and
assessing climate-related risks.
b. Describe the organisation’s processes for managing climate-
related risks.
c. Describe how processes for identifying, assessing, and managing
climate-related risks are integrated into the organisation’s overall risk
management.
4). Metrics and targets
a. Disclose the metrics used by the organisation to assess climate-
related risks and opportunities in line with its strategy and risk
management process.
b. Disclose Scope 1, Scope 2 and, if appropriate, Scope 3
greenhouse gas (GHG) emissions and the related risks.
c. Describe the targets used by the organisation to manage climate-
related risks and opportunities and performance against targets.
Governance
The board – is responsible for the company’s overall climate change strategy, including monitoring the company’s risk register,
a permanent item on the board’s monthly agenda, of which climate change is an established risk.
The audit committee – is responsible for providing oversight of the financial reporting, audit and internal control processes,
ensuring that these comply with laws and regulations. The company’s risk register is a standing agenda item for the committee.
This TCFD disclosure is included in its agenda annually for review.
The environment and energy group – which meets regularly, is chaired by finance director Ben Whitley. The group tracks the
progress against goals and targets and will monitor the company’s science-based target plan – which has been submitted to,
and is awaiting approval by, the Science Based Target initiative (SBTi). Key initiatives discussed by this focus group are
communicated to the business via environment champions, who are responsible for communicating energy, environment, waste
and recycling best practice. All employees receive training on environmental matters.
Risk management
The internal audit department is responsible for the day-to-day management of the risk register, including identifying and
assessing new and current risks. Eight of the companys identified risks are reported on pages 49 to 50. TCFD forms part of the
climate change risk. Each risk area is reviewed by the relevant department, alongside the internal audit team, to identify those
risk components, mitigations and changes which occurred in the year. Risks are categorised according to the probability of
occurrence and severity of impact. As mentioned above, the board and the audit committee have overall responsibility for
approving and reviewing the risk register.
The company is a member of the Zero Carbon Forum – supporting the hospitality sector to meet its carbon-reduction targets.
The company is also working with Carbon Intelligence – who has assisted the company in developing robust and credible
science-based targets. Progress towards achieving ‘net zero’ has been detailed in the metrics and targets section.
Strategy
The company recognises that it faces both environmental risks and opportunities relating to climate change. To date,
discussions and analysis have focused on, but are not limited to, the following effects on the business: carbon taxes; availability
of electricity; changes to transport networks; changes in customers’ behaviour; coastal erosion; flooding; supply chain
disruption; products’ availability/pricing. Dislosed below are three of these risks and one opportunity. All of the above risks have
been analysed in full for the board via an internal memorandum. Management assesses the effect of climate charge over the
short, medium and long term and estimates the financial impact.
This is the company’s second TCFD disclosure. As climate change evolves, management will continue to assess new risks
and opportunities, to measure against those already identified, explore potential mitigations and incorporate anything new into
the business’s strategic and financial planning. The company deems the current energy-saving and consumption-
reduction initiatives to be a resilient and a positive start, yet will continue to assess the effect and any strategic changes
required.
J D WETHERSPOON PLC
ANNUAL REPORT AND FINANCIAL STATEMENTS 2023
51
STRATEGIC REPORT – ENVIRONMENTAL MATTERS
Risks & opportunities
Risk /
opportunity
Lack of product
availability
from the
supply chain.
Increased
likelihood of
flooding from
more rain and
rising sea levels.
Negative
stakeholder
perception if the
company is
seen not to be
doing enough to
tackle climate
change.
UK heat waves
may result in
produce typically
grown in warmer
climates being
grown closer to
home.
Impact
Mitigations
Risk type
Time
Chronic
horizon
or acute
chronic medium
Financial
impact
high
physical/
transitional
A lack of product availability would
increase costs and lower profitability.
Any increased costs passed on to the
customer or a reduced availability of
products to purchase could affect sales.
Pub closures would affect the profitability
of the company, through lower sales,
potential rising insurance premiums and
the relocation of staff.
Use of multiple
suppliers for key
products to
mitigate availability
risks.
Use of flood
defenses, where
necessary.
Reputational damage could result in
fewer customers visiting the pubs and
hence lower sales. The company may
struggle to attract investors, affecting its
ability to access finance.
Publications such
as Wetherspoon
News and
Does Truth Matter
help to correct
misinformation.
physical
acute
medium
medium
transitional
n/a
short
high
n/a
n/a
n/a
long
opportunity
If temperatures were to rise by 2°C or
more, produce such as tomatoes,
oranges and grapes for wine could be
grown in the UK. This could lower the
company’s carbon footprint, while
reducing produce costs through lower
transportation and import fees.
Key
Risk type1
Physical
Risks due to longer-term
shifts in climate
patterns, such as
weather disruption.
Transitional Risks in transitioning to a
lower-carbon economy,
eg new policies
or regulations.
1Risk categories defined by the TCFD
Chronic or acute
Chronic physical risks refer to longer-
term shifts in climate patterns
(eg sustained higher temperatures)
which may cause sea levels to rise or
chronic heat waves.
Acute physical risks refer to those
which are event driven, including
increased severity of extreme weather
events, eg cyclones/hurricanes/floods.
Time horizon
Long
Medium
Short
25 years +
10-25 years
0-10 years
Financial Impact2
High
>£25m
Medium
£5-25m
Low
<£5m
2Annual impact
Metrics and targets
The above risks have been categorised according to their predicted financial impact and time horizon, both of which
have been determined through performing internal risk analysis across all climate-related risks and opportunities.
During the financial year, the company submitted its first science-based target plan to the SBTi, which is currently under review.
In the future, these will be split by FLAG (forest, land and agriculture) emissions. The company is working towards the
government’s Net Zero Strategy by 2050 and will provide updates on progress.
The company has been recognised for reducing its greenhouse gas emissions and is listed in the 2022 FT-Statista Europe’s
Climate Leaders list, highlighting companies which, over a five-year period, have achieved the greatest reduction in emissions.
The company has reported its greenhouse gas emissions (GHG) emissions since 2014.
GHG
emissions
Scope 1
Scope 2
Unit
2023
2022
2021
2020
2019
2018
2017
2016
2015
2014
Tonnes
CO2e
35,839
41,324
24,726
45,012
47,358
50,725
50,805
51,342
52,510
49,251
Tonnes
CO2e
79,044
65,971
57,079
68,297
94,016
115,315
138,864
157,190
170,048
163,930
Fuel
(car)
Tonnes
CO2e
948
454
33
745
1,034
Intensity
Scope 1
Scope 2
Fuel (car)
Total
kWh
kWh
kWh
kWh
196,311,302
226,818,295
134,994,694
244,801,679
257,589,099
249,058,142
205,342,472
178,260,013
292,946,271
308,430,989
4,056,075
1,917,037
139,138
3,138,550
4,277,561
449,425,519
434,077,804
313,393,845
540,886,500
570,297,649
Tonnes CO2e /
£m revenue
60.2
61.9
105.9
90.4
78.3
98
114.2
130.7
147
151.3
The data in the above tables is calculated by taking consumption data and converting it using conversion factors published by
the Department for Business, Energy & Industrial Strategy.
All emissions have been produced within the UK.
Scope 1 – combustion of gas and Scope 2 – purchase of electricity.
Refrigerant emissions from our pubs are currently not reported, as they are immaterial.
Once established, this will include scope 3.
52
ANNUAL REPORT AND FINANCIAL STATEMENTS 2023
J D WETHERSPOON PLC
fdfdfds
STRATEGIC REPORT – ENVIRONMENTAL MATTERS
Scope 3 emissions are the largest contributor to the Company’s overall carbon emissions, representing an estimated 89% of our
total output, however measuring carbon emissions in our supply chain is complex where the bult of scope 3 emissions are
generated. As our starting point we are allocating carbon emissions to every product which we sell, including food, drinks and
hotel rooms. Where detailed data is not currently available, we are making assumptions based on industry averages. Over time,
this data quality will improve. Reducing our scope 3 emissions will rely ultimately on a partnership approach with our UK and
worldwide suppliers and on their own plans to reduce carbon emissions.
Our key targets
Scope 1 and 2 reduction targets aligned to 1.5°C; 80% (scope 1 & 2) and 46% (scope 3) by 2030.
Net zero emissions by 2050.
Recycle 95% of recyclable waste.
Zero waste to landfill.
The following progress has been made towards reaching these targets:
The company has installed waterless urinals in a number of pubs and plans a nationwide rollout.
Complimentary water fountains are available in all pubs, offering an alternative to plastic water bottles.
Plastic containers that are used in the kitchen are now reusable.
The company no longer uses cling film.
Plastic milk cartons are segregated and recycled separately. Coloured lids have been replaced with clear recyclable lids.
Working with suppliers and with the support of WRAP and the Sustainable Restaurant Association to reduce and, where
possible, remove the use of plastic packaging for food.
The company does not create any toxic emissions or waste. Electronic waste is disposed of using specialised contractors to
safely dispose of the items.
Where possible, computer equipment is sent suppliers to refurbish and reuse. Any disposal is compliant with the EU Waste
from Electrical and Electronic Equipment (WEEE) directive.
On construction sites, there is a site waste management plan, managed by the main contractor and covering all waste
disposal from sites.
Cooking oil is converted to biodiesel for agricultural use.
Paper consumption has approximately halved in the last two years.
In partnership with Forest Carbon over the last four years, over 3,850 tonnes of carbon have been captured from the
atmosphere through planting of new woodlands and peatland restoration.
The company no longer posts Annual Reports to shareholders, only providing copies upon request. Any copies distributed are
printed on recycled carbon-neutral paper.
Working with our cloth supplier to remove 5.2 tonnes of plastic and 1.3 tonnes of cardboard from the supply chain, whilst
shipping 579 fewer pallets by being more efficient with distribution.
The pubs and head office segregate waste into a minimum of seven streams: glass, tin/cans, cooking oil, paper/cardboard,
plastic, lightbulbs and general waste. Such waste is sent to the Wetherspoon recycling centre which is located within the
company’s distribution centre. During the financial year, the pubs sent 9,911 tonnes of waste to the recycling centre.
In addition, food waste is also separated and sent for anaerobic digestion. Any remaining non-recyclable waste is sent to waste-
to-energy power plants which reduce CO2 and the use of fossil fuels. No waste is sent to landfill.
Next steps
The company has made good progress to date in both reducing and reporting its carbon footprint, but recognises there is still a
long way to go.
The company trials new ideas and energy-saving technology consistently to reduce consumption and CO2 emissions,
these have included:
solar panels
rainwater-harvesting systems
ground-source-heat pumps
free-air cellar-cooling systems (cools the cellar by bringing in outside air, when external temperatures are low enough)
wind turbines
building energy management systems (BMS)
voltage-optimising equipment
TCFD will remain a prominent part of the Annual Report going forward and the company hopes to be in a position to include
strategic and financial modelling in the future.
J D WETHERSPOON PLC
ANNUAL REPORT AND FINANCIAL STATEMENTS 2023
53
INDEPENDENT AUDITORS’ REPORT
Opinion
Conclusions relating to going concern
Our opinion on the financial statements is unmodified
We have audited the financial statements of J D
Wetherspoon plc (the ‘company’) for the 52 weeks ended
30 July 2023, which comprise the Income statement, the
Statement of comprehensive income, the Cash flow
statement, the Balance sheet, the Statement of changes in
equity and notes to the financial statements, including a
summary of significant accounting policies. The financial
reporting framework that has been applied in their
preparation is applicable law and UK-adopted international
accounting standards.
In our opinion, the financial statements:
give a true and fair view of the state of the company’s
affairs as at 30 July 2023 and of its profit for the 52 weeks
then ended;
have been properly prepared in accordance with UK-
adopted international accounting standards; and
have been prepared in accordance with the requirements
of the Companies Act 2006.
Basis for opinion
We conducted our audit in accordance with International
Standards on Auditing (UK) (ISAs (UK)) and applicable
law. Our responsibilities under those standards are further
described in the ‘Auditor’s responsibilities for the audit of
the financial statements’ section of our report. We are
independent of the company in accordance with the ethical
requirements that are relevant to our audit of the financial
statements in the UK, including the FRC’s Ethical Standard
as applied to listed public interest entities, and we have
fulfilled our other ethical responsibilities in accordance with
these requirements. We believe that the audit evidence we
have obtained is sufficient and appropriate to provide a
basis for our opinion.
We are responsible for concluding on the appropriateness
of the directors’ use of the going concern basis of
accounting and, based on the audit evidence obtained,
whether a material uncertainty exists related to events or
conditions that may cast significant doubt on company’s
ability to continue as a going concern. If we conclude that
a material uncertainty exists, we are required to draw
attention in our report to the related disclosures in the
financial statements or, if such disclosures are inadequate,
to modify the auditor’s opinion. Our conclusions are based
on the audit evidence obtained up to the date of our report.
However, future events or conditions may cause the
company to cease or continue as a going concern.
In auditing the financial statements, we have concluded
that the directors’ use of the going concern basis of
accounting in the preparation of the financial statements is
appropriate.
Based on the work we have performed, we have not
identified any material uncertainties relating to events or
conditions that, individually or collectively, may cast
significant doubt on the company’s ability to continue as a
going concern for a period of at least twelve months from
when the financial statements are authorised for issue.
In relation to the company’s reporting on how it has applied
the UK Corporate Governance Code, we have nothing
material to add or draw attention to in relation to the
directors’ statement in the financial statements about
whether the directors considered it appropriate to adopt
the going concern basis of accounting.
Our responsibilities and the responsibilities of the directors
with respect to going concern are described in the relevant
sections of this report.
54
ANNUAL REPORT AND FINANCIAL STATEMENTS 2023
J D WETHERSPOON PLC
INDEPENDENT AUDITORS’ REPORT
Our approach to the audit
Overview of our audit approach
Overall materiality: £5,100,000, which represents 0.26% of the company’s revenue.
Key audit matters were identified as:
The impairment of property, plant and equipment and right of use assets
(same as previous period); and
Going concern (same as previous period).
Materiality
Key audit
matters
Scoping
Key audit matters
Key audit matters are those matters that, in our professional judgement, were of most
significance in our audit of the financial statements of the current period and include the
most significant assessed risks of material misstatement (whether or not due to fraud)
that we identified. These matters included those that had the greatest effect on: the
overall audit strategy; the allocation of resources in the audit; and directing the efforts of
the engagement team. These matters were addressed in the context of our audit of the
financial statements as a whole, and in forming our opinion thereon, and we do not
provide a separate opinion on these matters.
Description
Audit response
KAM
Disclosures
Our results / Key
observations
In the graph below, we have presented the key audit matters, significant risks and other risks relevant to the audit
High
Potential
financial
statement
impact
Low
Low
The impairment of property,
plant and equipment and right of
use assets
Going concern
Revenue - notable items from audit data analytics
Revenue – occurrence of
automatic postings
The continuing
application of IFRS
16, Leases
Taxation - accuracy
Management override of controls – the presentation of
separately disclosed items
Trade and other payables -
completeness
Hedge accounting and the fair value of swaps
Cash – existence and accuracy
Extent of management judgement
High
Key audit matter
Significant risk
Other risk
J D WETHERSPOON PLC
ANNUAL REPORT AND FINANCIAL STATEMENTS 2023
55
INDEPENDENT AUDITORS’ REPORT
Key Audit Matter
How our scope addressed the matter
The impairment of property, plant and
equipment (“PPE”) and right of use assets
(“ROU assets”)
We identified impairment of PPE and ROU assets
as one of the most significant assessed risks of
material misstatement due to fraud and/or error.
PPE represents the largest balance on the balance
sheet (30 July 2023: £1.4bn / 31 July 2022:
£1.4bn). Further to this, there are ROU assets
recognised which must be considered for
impairment (30 July 2023: £0.4bn / 31 July 2022:
£0.4bn).
The directors consider each individual pub to be a
separate cash generating unit (“CGU”). The
directors are required to undertake an impairment
assessment where events indicate that the carrying
value of the CGU may not be recoverable.
The process for measuring and recognising
impairment under International Accounting
Standard 36 ‘Impairment of Assets’ (“IAS 36”) is
complex and requires significant judgement,
including assumptions within management’s
assessment of the impact of the geopolitical and
cost of living factors on future trading activity for
each pub, the determination of the appropriate
discount rate to be applied to those cashflows, as
well as management’s projections for the future
financial performance of each pub and where
appropriate, the underlying market value of the
pub.
Management identifies pubs which have an
indicator of impairment (management’s “Watchlist”
of pubs). These identified pubs are then risk
weighted by management into four categories
depending on how the pub has performed in the
current year compared to the prior year.
We have pinpointed our significant risk to those
pubs with a reduction in profit in the current year
when compared to the prior year which covers two
of the four Watchlist categories.
Relevant disclosures in the Annual Report and
Financial Statements 2023
Financial Statements: Note 13, PPE
Accounting Policies: Important estimates,
impairment of PPE & ROU assets
Corporate Governance: Significant financial
reporting items
In responding to the key audit matter, we performed the following audit
procedures:
Considered the accounting policy for compliance with IAS 36 and that the
application by the company is consistent with the stated policy;
Assessed the design effectiveness of controls, including the methodology
applied by management to identify indicators of impairment;
Understood and challenged management on the approach to creating the
Watchlist and challenged management on its completeness, including any pubs
which are performing below the remainder of the estate since returning to a
more “normal” trading period post Covid-19 and the impact of the more recent
macro-economic uncertainties;
Obtained management’s risk categorisation and challenged their assessment of
the pub categorisation utilised in the impairment review;
Recalculated the arithmetical accuracy and integrity of management’s
impairment model, by checking the internal consistency of formulae to identify
indicators of impairment;
Agreed a sample of impairment model inputs to supporting documentation,
including lease agreements, historic pub profit figures and the fixed asset
register;
Validated that the methodology of the impairment exercise is consistent with the
requirements of IAS 36, including appropriate identification of CGU’s and the
allocation of costs in the Value in Use (“VIU”) calculations. We engaged our
valuation experts to assess the reasonableness of the discount rate applied to
forecast cash flows;
Compared management’s assumptions within the impairment model against the
uncertainties inherent within the current economic environment;
Obtained corroborative evidence to support management’s judgements used for
those pubs with indicators of impairment, with specific additional consideration
on pubs identified in the significant risk categories, including evidence for
changes made to the pubs, discussions with pub / area managers, review of pub
space and evidence for operational changes;
Where management’s pub impairment assessment was based on the fair value
approach, we have obtained a property valuation from management’s internal
specialists and we have corroborated these valuations using external market
data including recent market transactions, recent desktop valuations from
external parties and indicative offers from third parties;
Performed sensitivity analysis based on reasonable, possible changes to key
assumptions determined by management being the discount rate, sales price
increase, and inflation rates on cost elements of the pub (including energy, staff
costs, food & bar and rental costs); and
Assessed the disclosures in the notes to the financial statements against the
requirements of IAS 36 Impairment of Assets, in particular the requirement to
disclose further sensitivities for CGUs where a reasonably possible change in a
key assumption would cause an impairment.
Key observations
We identified that additional impairments were required in relation to the impairment
of PPE and ROU assets. Management have considered and accepted these further
impairments and adjustments were made.
56
ANNUAL REPORT AND FINANCIAL STATEMENTS 2023
J D WETHERSPOON PLC
INDEPENDENT AUDITORS’ REPORT
Key Audit Matter
Going concern
We identified going concern as one of the most significant
assessed risks of material misstatement.
As auditors, we are required to “obtain sufficient appropriate
audit evidence about the appropriateness of management's
use of the going concern assumption in the preparation and
presentation of the financial statements and to conclude
whether there is a material uncertainty about the entity's
ability to continue as a going concern” (ISA (UK) 570).
Management has modelled a base case forecast in which,
over the period to 31 October 2024 as it continues to emerge
from the pandemic, sales, profit and cash flow growth
continues.
Management have anticipated within this forecast continued
high levels of inflation, particularly on food products, wages
and repairs.
A more cautious “downside” scenario has been analysed,
where there is no like-for-like sales growth in FY24. The
company has reviewed, and is satisfied with, the mitigating
actions it could take if such a scenario were to occur. Such
actions could include reducing discretionary capital
expenditure, reducing costs and / or implementing price
increases.
Management also modelled a “reverse stress test” in which
sales reduce by 12% when compared to the base case. 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.
Following the cessation of a period of lender-agreed relaxed
covenants to 31 July 2023, the Company has reverted to its
original covenant targets and the Company is confident that
these targets will be met in the going concern assessment
period.
As set out in Note 20, the secured Revolving Credit Facility
totalling £875 million of which £630 million was drawn at 30
July 2023, matures in February 2024 (£20m) and February
2025 (£855m).
How our scope addressed the matter
In responding to the key audit matter, we performed the following
audit procedures:
Obtained management’s base case and downside scenario
forecasts for the period to 31 October 2024, together with
supporting evidence for all key trading, working capital and cash
flow assumptions;
Obtained management’s reverse stress test scenario, which reflects
a sales decline which management consider to be remote and
management’s response via controllable mitigating actions;
We have performed arithmetical accuracy procedures on each of
management’s forecast scenarios, including forecast liquidity and
covenant calculations;
Assessed the robustness of forecasts prepared by comparison to
forecasts made in prior periods, including assessing management’s
historic ability to forecast, in light of our understanding of the
company’s operations;
Following our review of management’s board memorandum, we
identified the areas of business operations which could be most
affected by rising costs and sought evidence to corroborate
management’s attempts to quantify the potential impact. We also
sought evidence to support that the mitigating actions highlighted by
management would be achievable and effective;
Assessed the reasonableness of managements assertion that the
prospect of not being able to refinance is remote. The audit team
were supported by internal debt advisory experts with this
assessment; and
Assessed the disclosures made within the financial statements for
consistency with management’s assessment of going concern and
whether they are in line with the accounting standards.
Relevant disclosures in the Annual Report and
Accounts 2023
The company’s accounting policy on going concern is
shown in ‘accounting policies’ to the financial statements
on page 41.
Accounting policies: Going concern and Important
judgements
Directors’ Reports: Going concern
Key observations
We have nothing to report in addition to that stated in the ‘Conclusions
relating to going concern’ section of our report.
J D WETHERSPOON PLC
ANNUAL REPORT AND FINANCIAL STATEMENTS 2023
57
INDEPENDENT AUDITORS’ REPORT
Our application of materiality
We applied the concept of materiality both in planning and performing the audit, and in evaluating the effect of identified
misstatements on the audit and of uncorrected misstatements, if any, on the financial statements and in forming the opinion in
the auditor’s report. Materiality was determined as follows:
Materiality measure
Company
Materiality for financial
statements as a whole
We defined materiality as the magnitude of misstatement in the financial statements that,
individually or in the aggregate, could reasonably be expected to influence the economic
decisions of the users of these financial statements. We use materiality in determining the nature,
timing and extent of our audit work.
Materiality threshold
£5,100,000, which represents 0.27% of the company’s revenue.
Significant judgements
made by auditor in
determining the
materiality
Performance
materiality used to
drive the extent of our
testing
Performance materiality
threshold
Significant judgements
made by auditor in
determining the
performance materiality
In determining materiality, we made the following significant judgements.
We evaluated a range of benchmarks, including revenue, profit before tax and total assets.
Consistent with the prior year we disclose materiality as a percentage of revenue above,
however given the recent volatility of earnings we have considered a range of possible
benchmarks in determining materiality and the selected percentage against these
benchmarks is at the lower end of our acceptable range.
Materiality for the current period is higher than the level that we determined for the period
ended 30 July 2022 to reflect the increase in revenue and profitability within the company.
The materiality was consistent with 2019 materiality, the last normal period of trading prior to
Covid-19.
We set performance materiality at an amount less than materiality for the financial statements as
a whole to reduce to an appropriately low level the probability that the aggregate of uncorrected
and undetected misstatements exceeds materiality for the financial statements as a whole.
£3,825,000, which is 75% of financial statement materiality.
In determining materiality, we made the following significant judgements;
Whether there were any significant adjustments made to the financial statements in prior
periods;
Whether there were any significant control deficiencies identified in prior periods or changes
to the control environment;
Whether there were any changes in senior management during the period; and
Whether there were any significant changes in business objectives / strategy.
Specific materiality
We determined specific materiality for one or more particular classes of transactions, account
balances or disclosures for which misstatements of lesser amounts than materiality for the
financial statements as a whole could reasonably be expected to influence the economic
decisions of users taken on the basis of the financial statements.
Specific materiality
We determined a lower level of specific materiality for the following areas:
Directors’ remuneration; and
Related parties
Communication of
misstatements to the
audit committee
We determined a threshold for reporting unadjusted differences to the audit committee.
Threshold for
communication
£255,000 and misstatements below that threshold that, in our view, warrant reporting on
qualitative grounds.
58
ANNUAL REPORT AND FINANCIAL STATEMENTS 2023
J D WETHERSPOON PLC
INDEPENDENT AUDITORS’ REPORT
The graph below illustrates how performance materiality interacts with our overall materiality and the tolerance for potential
uncorrected misstatements.
Overall materiality
Preliminary 3
year rolling
average
profit
£108.3m
FSM: Financial statements materiality
PM: Performance materiality
TFPUM: Tolerance for potential uncorrected
misstatements
PM
£3.825m,
75%
FSM
£5.1m,
4.7%
TFPUM
£1.53m, 25%
An overview of the scope of our audit
We performed a risk-based audit that requires an understanding of the company’s business and in particular matters related to:
Understanding the company and its environment, including controls
The engagement team obtained an understanding of the company and its environment, including the controls and the
assessed risks of material misstatement. We performed interim and advanced audit procedures as well as an evaluation of
the internal control environment, including the company’s IT systems and controls.
Performance of our audit
We performed the majority of our work on-site and undertook substantive testing on significant transactions and material
account balances, including the procedures outlined above in relation to key audit matters. We performed a full scope audit
of the financial statements of the company.
Changes in approach from previous period
There were no significant changes to the scope of the audit compared to the prior period audit.
Other information
The other information comprises the information included in the Annual Report and Financial Statements, other than the
financial statements and our auditor’s report thereon. The directors are responsible for the other information contained within the
annual report. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise
explicitly stated in our report, we do not express any form of assurance conclusion thereon.
Our responsibility is to read the other information and, in doing so, consider whether the other information is materially
inconsistent with the financial statements or our knowledge obtained in the audit or otherwise appears to be materially
misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine
whether there is a material misstatement in the financial statements themselves. If, based on the work we have performed, we
conclude that there is a material misstatement of this other information, we are required to report that fact.
We have nothing to report in this regard.
J D WETHERSPOON PLC
ANNUAL REPORT AND FINANCIAL STATEMENTS 2023
59
INDEPENDENT AUDITORS’ REPORT
Our opinions on other matters prescribed by the Companies Act 2006 are unmodified
In our opinion, the part of the directors’ remuneration report to be audited has been properly prepared in accordance with the
Companies Act 2006.
In our opinion, based on the work undertaken in the course of the audit:
the information given in the strategic report and the directors’ report for the financial year for which the financial statements
are prepared is consistent with the financial statements and those reports have been prepared in accordance with
applicable legal requirements;
the information about internal control and risk management systems in relation to financial reporting processes and about
share capital structures, given in compliance with rules 7.2.5 and 7.2.6 in the Disclosure Rules and Transparency Rules
sourcebook made by the Financial Conduct Authority (the FCA Rules), is consistent with the financial statements and has
been prepared in accordance with applicable legal requirements; and information about the company’s corporate
governance code and practices and about its administrative, management and supervisory bodies and their committees
complies with rules 7.2.2, 7.2.3 and 7.2.7 of the FCA Rules.
Matters on which we are required to report under the Companies Act 2006
In the light of the knowledge and understanding of the company and its environment obtained in the course of the audit, we
have not identified material misstatements in:
the strategic report or the directors’ report; or
the information about internal control and risk management systems in relation to financial reporting processes and about
share capital structures, given in compliance with rules 7.2.5 and 7.2.6 of the FCA Rules.
Matters on which we are required to report by exception
We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires us to report
to you if, in our opinion:
adequate accounting records have not been kept, or returns adequate for our audit have not been received from branches
not visited by us; or
the financial statements and the part of the directors’ remuneration report to be audited are not in agreement with the
accounting records and returns; or
certain disclosures of directors’ remuneration specified by law are not made; or
we have not received all the information and explanations we require for our audit; or
a corporate governance statement has not been prepared by the company
Corporate governance statement
We have reviewed the directors’ statement in relation to going concern, longer-term viability and that part of the Corporate
Governance Statement relating to the company’s compliance with the provisions of the UK Corporate Governance Code
specified for our review by the Listing Rules.
Based on the work undertaken as part of our audit, we have concluded that each of the following elements of the Corporate
Governance Statement is materially consistent with the financial statements or our knowledge obtained during the audit:
the directors' statement with regards the appropriateness of adopting the going concern basis of accounting and any
material uncertainties identified set out on page 41;
the directors’ explanation as to their assessment of the company’s prospects, the period this assessment covers and why
the period is appropriate set out on page 65;
the directors’ statement on whether they have a reasonable expectation that the company will be able to continue in
operation and meets its liabilities set out on page 41;
the directors' statement on fair, balanced and understandable set out on page 64;
the board’s confirmation that it has carried out a robust assessment of the emerging and principal risks set out on pages 49
to 50;
the section of the annual report that describes the review of the effectiveness of risk management and internal control
systems set out on page 79; and
the section describing the work of the audit committee set out on page 80.
60
ANNUAL REPORT AND FINANCIAL STATEMENTS 2023
J D WETHERSPOON PLC
INDEPENDENT AUDITORS’ REPORT
Responsibilities of directors
As explained more fully in the directors’ responsibilities statement set out on page 64, the directors are responsible for the
preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as
the directors determine is necessary to enable the preparation of financial statements that are free from material misstatement,
whether due to fraud or error.
In preparing the financial statements, the directors are responsible for assessing the company’s ability to continue as a going
concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the
directors either intend to liquidate the company or to cease operations, or have no realistic alternative but to do so.
Auditor’s responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material
misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is
a high level of assurance but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a
material misstatement when it exists.
Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could
reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.
Irregularities, including fraud, are instances of non-compliance with laws and regulations. The extent to which our procedures
are capable of detecting irregularities, including fraud, is detailed below:
We obtained an understanding of the legal and regulatory frameworks applicable to the Company and determined that the
following laws and regulations were most significant: UK-adopted international accounting standards, IFRIC Interpretations,
Companies Act 2006, Listing Rules and the UK Corporate Governance Code;
We performed a review of prior period financial statements, enquiries of management, the finance team, Head of Legal and
the Audit Committee. We corroborated our enquiries through our review of Board minutes, review of legal costs and
discussion with those outside of finance responsible for legal matters.
We enquired of management and the board of directors whether they were aware of any instances of non-compliance with
laws and regulations and whether they had any knowledge of actual, suspected alleged fraud;
We enquired of management, the finance team, Head of Legal and the Audit Committee about the company’s policies and
procedures relating to the identification, evaluation and compliance with laws and regulations and the detection and
response to the risks of fraud and the establishment of internal controls to mitigate risks related to fraud or non-compliance
with laws and regulations;
We obtained an understanding of how the company is complying with those legal and regulatory frameworks by making
enquiries of management, those responsible for legal and compliance procedures and the company secretary. Our findings
were corroborated by review of the board minutes and papers provided to the Audit Committee;
We assessed the susceptibility of the company’s financial statements to material misstatement, including how fraud might
occur. Audit procedures performed by the engagement team included:
Obtaining an understanding of how those charged with governance considered and addressed the potential for override of
controls or other inappropriate influence over the financial reporting process;
Challenging assumptions and judgements made by management in its significant accounting estimates;
Identifying and testing journal entries with a focus on journals indicating large or unusual transactions or account
combinations based on our understanding of the business, including material journal entries impacting the profit and loss
accounts as well as journal entries posted by key management personnel;
Applying audit data analytics techniques across the revenue population to match revenue recorded to cash receipts and
investigating and corroborating any unexpected exceptions;
Applying audit data analytics techniques across the costs of goods sold population to match revenue recorded to cost of
goods sold and investigating and corroborating any unexpected exceptions;
Assessing matters reported through the company’s whistleblowing programme and the results of management’s
investigation of such matters; and
Identifying and assessing the design effectiveness of controls management has in place to prevent and detect fraud
These audit procedures were designed to provide reasonable assurance that the financial statements were free from fraud
or error. The risk of not detecting a material misstatement due to fraud is higher than the risk of not detecting one resulting
J D WETHERSPOON PLC
ANNUAL REPORT AND FINANCIAL STATEMENTS 2023
61
INDEPENDENT AUDITORS’ REPORT
from error and detecting irregularities that result from fraud is inherently more difficult than detecting those that result from
error, as fraud may involve collusion, deliberate concealment, forgery or intentional misrepresentations. Also, the further
removed non-compliance with laws and regulations is from events and transactions reflected in the financial statements,
the less likely we would become aware of it:
-
The engagement partner assessed the appropriateness of the collective competence and capabilities of the
engagement team, by considering the engagement team’s understanding of, and practical experience with, audit
engagements of a similar nature and complexity;
- We communicated relevant laws and regulations and potential fraud risks to all engagement team members and
remained alert to any indications of fraud or non-compliance with laws and regulations throughout the audit.
A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting
Council’s website at: www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor’s report.
Other matters which we are required to address
We were appointed by board on 9 November 2017 to audit the financial statements for the period ended 29 July 2018 and
subsequent financial periods.
The period of total uninterrupted engagement including previous renewals and reappointments of the firm is 6 years, covering
the periods ended 29 July 2018 to 30 July 2023.
The non-audit services prohibited by the FRC’s Ethical Standard were not provided to the company and we remain independent
of the company in conducting our audit.
Our audit opinion is consistent with the additional report to the Audit Committee
Use of our report
This report is made solely to the company’s members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act
2006. Our audit work has been undertaken so that we might state to the company’s members those matters we are required to
state to them in an auditor’s report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume
responsibility to anyone other than the company and the company’s members as a body, for our audit work, for this report, or for
the opinions we have formed.
Marc Summers BSc (Hons) FCA
Senior Statutory Auditor
for and on behalf of Grant Thornton UK LLP
Statutory Auditor, Chartered Accountants
London
6 October 2023
62
ANNUAL REPORT AND FINANCIAL STATEMENTS 2023
J D WETHERSPOON PLC
DIRECTORS AND OFFICERS
D
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Tim Martin, Chairman, aged 68
Founded the Company in 1979, having previously studied law at
Nottingham University and qualified as a barrister. He became
chairman in 1983.
Ⓑ
James Ullman, Personnel and Retail Auditor Director, aged 52
Joined in 1994 and was appointed to the board in 2022. He is a
graduate of Brighton University and Birmingham City University.
He became a chartered internal auditor in 2011.
Ⓑ Ⓜ
Hudson Simmons, Employee Director, aged 51
Joined in 1997 and was appointed to the board in 2021 and is
area manager for the Sheffield area. He is a graduate of
Nottingham Trent University.
Ⓑ
Ben Thorne, Senior Independent Director, aged 64
Appointed to the board in 2020. He is a graduate of Westminster
University. He qualified as a solicitor in 1985. He is a consultant to
WH Ireland.
Ⓑ Ⓐ Ⓝ Ⓡ
Harry Morley Non-Executive Director, aged 58
Appointed to the board in 2016 and is chair of the audit committee.
He is a graduate of Oxford University. He is a non-executive
director of TheWorks.co.uk plc, Cadogan Group Limited and of
Schroder Mid Cap Fund plc. He is a trustee of the Ascot Authority.
He qualified as a chartered accountant in 1991.
Ⓑ Ⓐ Ⓝ Ⓡ
Nigel Connor, Company Secretary and Legal Director, aged 54
Joined in 2009 and was appointed Company secretary in 2014.
He is a graduate of Newcastle University and qualified as a
solicitor in 1997.
Ⓑ Ⓜ
Michael Barron, Commercial Director, aged 37
Joined in 2011 and appointed to the management board in 2022.
He is a graduate of Sheffield University and qualified as a
chartered accountant in 2010.
Ⓜ
Paul Brimmer, Purchasing Director, aged 48
Joined in 2006 and appointed to the management board in 2022.
He became a member of the Chartered Institute of Procurement
and Supply in 2002.
Ⓜ
Will Fotheringham, Associate Employee Director, aged 48
Joined in 1998. Appointed as an associate employee director in
2021. He is general manager for the north west England and north
Wales.
John Hutson, Chief Executive Officer, aged 58
Joined in 1991 and was appointed to the board in 1996. He is a
graduate of Exeter University.
Ⓑ Ⓜ
Ben Whitley, Finance Director, aged 45
Joined in 1999 and was appointed to the board in 2015. He is a
graduate of Durham University and qualified as a chartered
management accountant in 2012.
Ⓑ Ⓜ
Deborah Whittingham, Employee Director, aged 54
Joined in 1992 and was appointed to the board in 2021. She is
regional manager for the West Midlands.
Ⓑ
Debra van Gene, Non-Executive Director, aged 69
Appointed to the board in 2006 and is chair of the remuneration
committee. She is a graduate of Oxford University. She has
previously been a partner at Heidrick and Struggles Inc and a
commissioner with the Judicial Appointments Commission.
Ⓑ Ⓐ Ⓝ Ⓡ
David Capstick, IT and Property Director, aged 62
Joined in 1998 and appointed to the management board in 2003.
He is a graduate of the University of Surrey.
Ⓜ
Martin Geoghegan, Operations Director, aged 54
Joined in 1994 and appointed as operations director in 2004.
Ⓜ
Tom Ball, People Director, aged 47
Joined in 2009 and appointed to the management board in 2022.
He is a graduate of Bournemouth University.
Ⓜ
Hannah Young, Deputy Finance Director, aged 42.
Joined in 2013 and appointed to the management board in 2022.
She is a graduate of Bristol University and qualified as a chartered
management accountant in 2006 and a chartered secretary in
2023.
Ⓜ
Emma Gibson, Associate Employee Director, aged 36
Joined in 2004. Appointed as an associate employee director in
2021. She is pub manager of The Imperial, Exeter.
S
Key
Ⓑ
Board
member Ⓜ Management
board
Ⓐ
Audit
committee
Ⓝ
Nomination
committee
Ⓡ
Remuneration
committee
J D WETHERSPOON PLC
ANNUAL REPORT AND FINANCIAL STATEMENTS 2023
63
DIRECTORS’ REPORT
Directors
The directors of the Company who were in office during
the year and up to the date of signing the financial
statements are listed on page 63.
There are no agreements with the Company’s directors or
employees which provide for compensation for loss of
office or employment which occurs because of a takeover
bid.
Dividends
No dividend will be paid for the year.
Return of capital
At the annual general meeting of the Company, held on 18
November 2021, the Company was given authority to
make market purchases of up to 19,312,523 of its own
Shares. During the year to 30 July 2023, we purchased
2,368,302 shares for share-based payments.
Directors’ interest in contracts
No director has any material interest in any contractual
agreement, other than an employment contract, subsisting
during or at the end of the year, which is, or may be,
significant to the Company.
Takeover directive disclosures
The Company has an authorised share capital comprising
500,000,000 ordinary shares of 2p each. As at 30 July
2023, the total issued share capital comprised
128,750,155 fully paid-up shares of 2p each. The rights to
these shares are set out in the Company’s articles of
association. There are no restrictions on the transfer of
these shares or their attached voting rights.
Details of significant shareholdings at year end
and as at 30 July 2023 are given on page 82.
No person holds shares with specific rights regarding
control of the Company.
The Company operates an employee share incentive plan.
However, no specific rights with respect to the control of
the Company are attached to these shares. In addition, the
Company operates a deferred bonus scheme, whereby,
should a takeover occur, all shares held in trust would be
transferred to the employee immediately.
The Company is not aware of any agreements among
holders of securities known to the Company which may
result in restrictions on the transfer of securities or voting
rights.
The Company has the power to issue and buy back shares
as a result of resolutions passed at the annual general
meeting in 2022. It is the Company’s intention to renew
these powers; the resolutions approving them are found in
the notice of the annual general meeting for 2023.
In the event of a change of control, the Company is obliged
to notify its main bank lenders. The lenders shall not be
obliged to fund any new borrowing requests; facilities will
lapse 10 days after the change of control, if the terms on
which they can continue have not been agreed on.
Any borrowings, including accrued interest, will become
immediately repayable on such lapse.
There are no other significant agreements to which
the Company is party which may be subject to change-of-
control provisions.
Statement of directors’ responsibilities
The directors are responsible for preparing the annual
report, the directors’ remuneration report and the financial
statements, in accordance with applicable law and
regulations.
Company law requires the directors to prepare financial
statements for each financial year. Under that law, the
directors have elected to prepared the financial statements
in accordance with international accounting standards in
conformity with the requirements of the Companies Act
2006. Under company law, the directors must not approve
the financial statements unless they are satisfied that they
give a true and fair view of the state of affairs and profit or
loss of the Company for that period. In preparing these
financial statements, the directors are required to:
select suitable accounting policies and then apply them
consistently
make judgements and accounting estimates
which are reasonable and prudent
state whether applicable UK-adopted international
accounting standards (IASs) in accordance with the
requirements of the Companies Act 2006 have been
Followed, subject to any material departures disclosed and
explained in the financial statements
prepare the financial statements on the going-concern
basis, unless it is inappropriate to presume that the
Company will continue in business
The directors are responsible for keeping adequate
accounting records which are sufficient to show and
explain the Company’s transactions and disclose with
reasonable accuracy at any time the financial position of
the Company and to enable them to ensure that the
financial statements and the directors’ remuneration report
comply with the Companies Act 2006 and article 4 of the
IAS regulation. They are also responsible for safeguarding
the assets of the Company and hence for taking
reasonable steps for the prevention and detection of fraud
and other irregularities.
The directors confirm that:
so far as each director is aware, there is no relevant
audit information of which the Company’s auditor is
Unaware; and
the directors have taken all the steps which they ought
to have taken as directors to make themselves aware of
any relevant audit information and to establish that the
Company’s auditor is aware of that information.
The directors are responsible for preparing the annual
report in accordance with applicable law and regulations.
The directors consider that the annual report and financial
statements, taken as a whole, provide the information
necessary to assess the Company’s performance,
business model and strategy and are fair, balanced and
understandable.
64
ANNUAL REPORT AND FINANCIAL STATEMENTS 2023
J D WETHERSPOON PLC
DIRECTORS’ REPORT
The directors are responsible for the maintenance and
integrity of the corporate and financial information included
on the Company’s website. Legislation in the United
Kingdom governing the preparation and dissemination of
financial statements may differ from legislation in other
jurisdictions.
To the best of our knowledge:
the Company’s financial statements are prepared in
accordance with the UK-adopted international accounting
standards and have been prepared in accordance with the
requirements of the Companies Act 2006; and
the strategic report and directors’ report include a fair
review of the development and performance of the
business and the position of the Company, together with a
description of the principal risks and uncertainties which it
faces.
Business relations
Information on the Company’s relations with customers
and suppliers is disclosed in the strategic report on page
47.
Employment policies
Information on the Company’s employment policies,
Including the appointment and replacement of directors’,is
disclosed in the corporate governance report on pages 80-
81.
Streamlined Energy and Carbon Reporting (SECR)
Environmental disclosures can be found on pages 51-53.
Articles of Association
The Company’s Articles of Association may only be
amended by special resolution at a general meeting of the
shareholders.
Directors’ indemnities
As permitted by the articles of association, the directors
have the benefit of an indemnity which is a qualifying third-
party indemnity provision, as defined by section 234 of the
Companies Act 2006. The indemnity was in force
Throughout the last financial year and is currently in force.
Throughout the financial year, the Company also
purchased and maintained, directors and officers’ liability
insurance, in respect of itself and its directors.
Viability statement
In accordance with provision 31 of the UK Corporate
Governance Code 2018, the directors confirm that they
have a reasonable expectation that the Company will
continue to operate and meet its liabilities, as they fall due,
until the financial year in 2026.
The directors have determined that a three-year period is
an appropriate period over which to assess viability, as it
aligns with the Company’s capital investment plans and
gives a greater certainty over the forecasting assumptions
used.
The directors’ assessment has been made with reference
to the Company’s current position, financial plan and its
principal risks and uncertainties set out on pages 49-50,
specifically economic, regulatory, reputational and interest-
rate risks. The details of these risks and uncertainties are
the result of internal risk management and control
processes, with further details set out in the audit
committee’s report on pages 79-81.
To assess the impact of the Company’s principal risks and
uncertainties on its long-term viability, scenarios were
applied to the Company’s financial forecasts in the form of
reduced like-for-like sales compared to FY22. It is
assumed that the Company’s financial plans would be
adjusted in response. Such actions could include reducing
discretionary expenditure and/or implementing price
increases.
The directors have determined that, over the period of the
viability assesment, there is not expected to be a
significant impact resulting from climate change.
The Company has Revolving Credit Facilities in place of
£875 million until February 2024 and £855 million until
February 2025. A £98 million private placement is in place
until August 2026. Following conversations with advisors,
as well as current and prospective lenders, the company
believes it has a number of viable refinancing options.
Going concern
The directors have made enquiries into the adequacy of
the Company’s financial resources, through a review of the
Company’s budget and medium-term financial plan,
including capital expenditure plans and cash flow
forecasts. In line with accounting standards, the going
concern assessment period is the 12-months from the date
of approval of these accounts (approximately the end of
quarter 1 of FY25). Given the proximity to the going
concern review period, the Company has also considered
the February 2025 expiry of its current Revolving Credit
Facility in its assessment.
The Company has modelled a ‘base case’ forecast in
which recent momentum of sales, profit and cash flow
growth is sustained. The Company has anticipated within
this forecast 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 debts as they fall due
and operate within its leverage covenants for the going
concern assessment period.
A more cautious but plausible scenario has been analysed,
in which sales for FY24 are in line with FY23 (ie no sales
growth). The Company has reviewed, and is satisfied with,
the mitigating actions that it could take if such an outcome
were to occur. Such actions could include reducing
discretionary capital expenditure, reducing costs or
implementing price increases. Under this scenario, the
Company would still have sufficient resources to settle
liabilities as they fall due and sensible headroom on its
covenants through the duration of the going concern
review period.
The Company has also performed a ‘reverse stress case’
which shows that the Company could withstand a 12%
reduction in 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.
J D WETHERSPOON PLC
ANNUAL REPORT AND FINANCIAL STATEMENTS 2023
65
Future developments
The Company intends to continue to operate pubs and
hotels throughout the UK and Ireland. The Company aims
to continue to provide customers with good-quality food
and drinks, served by well-trained and friendly staff, at
reasonable prices.
Events after the reporting period
On 22 August 2023, the company disposed of all interest
rate swaps in place, receiving £15 million to do so. At the
same time, the company took out a new interest-rate swap
of £200 million from 23 August 2023 through to 6 February
2025 at a rate of 5.665%.
By order of the board
Nigel Connor
Company Secretary
6 October 2023
DIRECTORS’ REPORT
Furthermore the Company could take additional mitigating
actions, in such a scenario, to prevent any covenant
breach.
The directors have determined that, over the period of the
going concern assessment, there is not expected to be a
significant impact resulting from climate change.
Following the cessation of a period of lender-agreed
relaxed covenants to 31 July 2023, the Company has
reverted to its original covenant targets and the Company
is confident that these targets will be met in the going
concern assessment period.
As set out in Note 20, the secured Revolving Credit Facility
totalling £875 million of which £630 million was drawn at
30 July 2023, matures in February 2024 (£20 million) and
February 2025 (£855 million).
As the directors believe that the positive trading and cash
flow trends which have been experienced in the period to
30 July 2023 will continue, coupled with increasing
certainty over cost inflation, the Company has chosen not
to formally commence any refinancing exercise as at the
date of these accounts.
Given the Company’s strong financial position and current
trading performance, the directors are confident that the
Company will be able to refinance its debt facilities when it
is required to do so. The Company has had frequent
conversations to date with its longstanding lending
syndicate and advisors. These discussions have
highlighted multiple refinancing options and very good
levels of support. These factors, combined with the
alternative liquidity options available to the Company,
provide the directors with appropriate assurance that the
prospect of not being able to refinance is remote and as
such no material uncertainty exists.
After due consideration of the matters set out above, the
directors have satisfied themselves that the Company will
continue in operational existence for the foreseeable
future. For this reason, the Company continues to adopt
the going-concern basis in preparing its financial
statements.
Financial instruments
The Company’s policy on the use of financial instruments
is set out in note 22.
Overseas branches
The Company has an overseas branch in the Republic of
Ireland.
Listing Rule 9.8.4 R
Information required by this rule to be disclosed (starting
on page indicated, if applicable):
Details of long-term incentive schemes, page 68-69,
Provision of services by a controlling shareholder page
67–75,
Agreements with controlling shareholders, page 40,
Corporate governance (DTR 7.2.9 R), pages 76–81.
66
ANNUAL REPORT AND FINANCIAL STATEMENTS 2023
J D WETHERSPOON PLC
DIRECTORS’ REMUNERATION REPORT
Annual cash bonus
The previous year was a loss-making year. Therefore, the
Company has decided to award a bonus to all employees
based on performance in the second half of the year,
compared to a Company forecast. The committee is
proposing that this be extended to executive directors,
which will result in an award of 8.25% of basic salary.
Deferred bonus scheme
The deferred bonus scheme is a scheme which awards
shares to all eligible senior managers throughout the
business including executive directors.
Under the agreed scheme, executive directors will receive
a maximum 100% of their basic salary in shares.
The calculation for this award is included underneath the
bonus and incentives table on page 73.
Company share incentive plan (SIP)
The Company SIP is open to all employees in the
Company, at varying levels, according to each individual’s
seniority and length of service.
Executive Directors received an amount equivalent to 25%
of their salary in shares. The CEO and Personnel & Retail
Audit director received additional awards equivalent to
10% and 5% respectively of their salaries, because of their
lengths of service. These additional awards are available
to all employees with over 25 years’ service with the
Company.
Pension
A new all-employee pension scheme has been introduced,
in line with current guidance and applies to all employees
from 1 August 2022. Contributions of 12% to executive
directors are aligned to this scheme. The CEO and
Personnel & Retail Auditor Director received additional
contributions because of their lengths of service. These
additional contributions are available to all employees with
over 25 years’ service with the Company.
In setting remuneration for the executive board, the
committee takes into account wider workforce
remuneration policies throughout the Company. Many of
the elements of executive board remuneration outlined
above extend throughout much of the Company, at varying
levels.
Debra van Gene
Chair of the Remuneration Committee
6 October 2023
Annual statement
Dear shareholder
Salary increases and awards made to executive board
members this year are in accordance with the
remuneration policy agreed by shareholders at the
Company’s Annual General Meeting (AGM) in December
2020.
We are presenting a new remuneration policy for approval
by shareholders at this year’s AGM in November. The new
policy document follows this statement.
The revisions introduced in the new policy are driven by an
ambition to get back to, and increase on, 2019 levels of
company profitability. They are also made to ensure there
are sensible comparators in place, rather than
comparisons with the Company performance which was
inevitably suppressed during the pandemic.
Company performance in the second half of this financial
year has shown clear signs of emerging from the after-
effects of the pandemic lockdown.
As a result, the annual bonus award for the coming year
will be based on percentage increases of profit compared
to performance in the second half of the current year
annualised.
Deferred Bonus Scheme (DBS) awards will be made on
performance relative to FY2019 rather than FY2023, until
that level of performance is surpassed.
We lay out our ESG targets and strategy on pages 51-53.
The committee considered introducing specific ESG
measures into individuals’ remuneration incentive plans.
This is a highly complex and evolving area, and on
balance the committee felt it is too early in the learning
curve to assign specific targets to individuals, which may
lead to unintended consequences. It is an area the
committee will leave open for review in the future.
Salary
In the year ending 30th July 2023 the salaries of the CEO
and the Personnel and Retail Audit Director were not
increased. The salary of the Finance Director was
increased by 2%.
For the current year ending 31st July 2024 the
Remuneration Committee is proposing an increase of 6%
for the CEO. This compares with a 6.7% increase for the
general workforce.
An increase of 7.8% for the Finance Director and 11.1%
for the Personnel and Retail Audit Director is proposed.
This is because, as explained at the 2019 AGM, the
committee decided to increase the salaries of internal
appointments to the board in stepped levels over several
years, so that over time their salaries would increase
towards market levels for an equivalent executive director
of a FTSE 250 company, while minimising upfront cost to
the company. The salaries of both these executives are
still well below the median of their peer group.
J D WETHERSPOON PLC
ANNUAL REPORT AND FINANCIAL STATEMENTS 2023
67
DIRECTORS’ REMUNERATION REPORT
Remuneration policy
The committee reviews the executive directors’ remuneration packages at least annually. The aim of the remuneration policy is
to:
Provide attractive and fair remuneration for directors
Align directors’ long-term interests with those of shareholders, employees and the wider community
Incentivise directors to perform to a high level
In agreeing on remuneration, account is taken of the pay levels at Wetherspoon, as well as those in the
hospitality industry in general, along with other comparisons and reports. The committee aims to take a fair and commonsense
approach.
This statement of our remuneration policy will apply from the company’s next AGM on 16 November 2023, subject to
shareholders’ approval at that meeting. The statement of our policy will replace the one approved in December 2020
Component Reason
Operation, maximum achievable and performance criteria
Base salary
Benefits
Pension
Provide attractive
and fair
remuneration
for directors.
Provide attractive
and fair
remuneration
for directors.
Provide attractive
and fair
remuneration
for directors.
Salaries are reviewed at least annually, with any changes normally taking effect from 1 August
each year.
Salary increases are awarded at the discretion of the remuneration committee.
When considering salary levels and whether an increase should be offered, the committee takes
account of a variety of factors, including Company performance, individual performance,
experience and responsibilities, market information and the level of increase being offered to other
employees.
A range of taxable benefits is available to executive directors. These benefits comprise principally
the provision of a car allowance, life assurance, private medical insurance and fuel expenses.
In addition, an allowance equivalent to 5% of salary is paid for a set number of calls to monitor
service and standards in pubs, predominantly in the evening and at weekends. This is paid
quarterly.
The cost of benefits provided changes in accordance with market conditions.
The committee monitors the overall cost of the package periodically.
The Company does not operate any defined benefit pension schemes.
The Company’s pension contributions are based on length of service. The contribution detailed
below are applicable to all scheme members, in pubs and head office positions, including
Directors, subject to minimum employee contributions being satisfied.
Length of Service
Less than one year
Over one year
Over five years
Over 10 years
Over 15 years
Over 20 years
Company pension contribution %
3
4
5
6
8
12
After 25 years’ service, all employees in the Company, including executive directors receive
additional pension payments of 2% of their salary. This rises by a further 2% after each additional
five years’ service.
Executive directors may receive a salary supplement in lieu of pension, at the discretion of the
remuneration committee.
Annual bonus payments are paid in cash, at the discretion of the remuneration committee.
The bonus is based on profit growth, multiplied by a factor of 1.5 and paid to a maximum of 45%
of salary. Profit growth is calculated on profit before tax, property gains/losses and separately
disclosed items.
The scheme for the year ending July 2024 will be based on growth compared to the annualised
performance in the second half of the year ending July 2023.
Annual bonus
plan
Incentivise
directors
to perform to a
high level.
68
ANNUAL REPORT AND FINANCIAL STATEMENTS 2023
J D WETHERSPOON PLC
DIRECTORS’ REMUNERATION REPORT
Component Reason
Operation, maximum achievable and performance criteria
Share incentive
plan (SIP)
Align directors’
interests with
those of
shareholders,
employees and
the wider
community.
The SIP allocates shares equivalent to 5% of salary to all Company employees after an 18-month
qualifying period. Shares do not vest for at least three years under this plan – and tax-free returns
are possible, if shares are held for five years or more.
The Company offers extra shares under this scheme to some employees:
pub managers receive an extra 5% annual award; head-office staff 10–15%; directors, including
executive board directors, 20%.
After 25 years’ service, all employees, including directors, receive additional SIPs of 5% of their
salary. This rises by a further 5% after each additional five years’ service.
Deferred
bonus scheme
Align directors’
interests with
those of
shareholders,
employees and
the wider
community
Awards under this scheme are not based on financial or other targets. The Company believes that
excessive use of financial targets can lead to distortions in companies’ behaviour and that it is
important for there to be some share awards which can be accumulated gradually, the value of
which depends on the overall success of the Company. The aim is for all employees to be able to
accumulate shares over time, to encourage loyalty and joint purpose.
Awards are made twice yearly throughout the Company.
Directors must be in office when the shares vest.
If changes are made to SIPs which apply to all employees in the schemes, they may be applied to
executive directors, at the discretion of the remuneration committee.
The Company does not operate a shareholding scheme with a minimum vesting period of five
years.
The deferred bonus scheme may award shares to all senior managers, including executive
directors. Bonus awards are made under the scheme, annually, at the discretion of the
remuneration committee.
Bonus awards are satisfied in shares. One-third of a participant’s shares will immediately vest to
the participant on calculation of the initial award (and can be paid in cash), one-third will vest after
one year and the remaining third will vest after two years. In each case, vests will be subject to the
participant being employed by the Company at the release date.
Performance criteria for the scheme have been simplified to be based purely on growth in
earnings per share. The performance criteria for executive directors are the same as those for
senior managers who are eligible for the scheme. Awards are made using a multiple based on an
employee’s grade. The maximum bonus to be earned under the scheme is 100% of annual salary.
Awards for the year ending July 2024 will be based on earnings per share performance relative to
the year ending July 2019 rather than July 2023. That target will remain in place until it is
surpassed, at which point the target becomes the prior year performance.
Any changes made to the deferred bonus scheme for eligible senior managers may, at the
discretion of the remuneration committee, be applied to executive directors.
Non-executive
directors’ fees
Provide attractive
and fair
remuneration
for directors.
The fees paid to non-executive directors are determined by the executive board, taking into
account the level of fees for similar positions in the market and the time commitment which each
non-executive director makes.
The non-executive directors receive no other remuneration or benefits from the Company.
J D WETHERSPOON PLC
ANNUAL REPORT AND FINANCIAL STATEMENTS 2023
69
DIRECTORS’ REMUNERATION REPORT
Approach to recruitment remuneration
The aim, when agreeing on components of a remuneration
package, including any variable pay for incoming directors,
would be in accordance with the table above. Account is
taken of the individual’s experience, the nature of the role
being offered and his or her existing remuneration
package. Relocation expenses or allowances may be paid,
as appropriate.
The committee may, at its discretion, offer cash, share-
based elements or additional pension contributions, as
necessary, to secure an appointment, although it does not
normally do so. Shareholders will be informed of any such
payments at the time of appointment.
Our main principle is that payments made to prospective
directors as compensation for loss of benefits at a previous
Company are inherently unfair, since it would be extremely
rare for anyone below board level to receive this sort of
compensation.
Chairman and directors’ service contracts
The executive directors are employed on rolling contracts,
requiring the Company to give up to one year’s notice of
termination, while the director may give six months’ notice.
In the event of termination of employment with the
Company, without the requisite period of notice, executive
directors’ service contracts provide for the payment of a
sum equivalent to the net value of salary and benefits to
which the executive would have been entitled during the
notice period.
The executive is required to mitigate his or her loss and
such mitigation may be taken into account in any payment
made. The Company’s policies on the duration of directors’
service contracts, notice periods and termination payments
are all in accordance with best industry practice.
The commencement dates for executive directors’ service
contracts were as follows:
Tim Martin – 20 October 1992
John Hutson – 4 September 1996
Ben Whitley – 2 November 2015
James Ullman – 4 May 2022
All executive directors will be standing for re-election at the
AGM. Their current service contracts do not have an
explicit expiry date.
Shareholdings
Executive directors are required to maintain a minimum
shareholding. Minimum holding requirements are set by
the remuneration committee for each director and
reviewed every three years, when the remuneration policy
is reviewed. Minimum holding requirements include
awarded shares which have not yet vested.
To the extent that any executive director holds under the
required number of shares, at least 50% of any vested free
share (SIP) awards must be retained, until the required
shareholding is attained.
On ceasing to be an executive director, a minimum holding
of 50% of the previous requirement must be maintained for
a minimum period of 12 months.
This guideline applies to shares which vest following the
adoption of this guideline. Any shares purchased by
executives would not be subject to the guideline.
The application of the minimum shareholding requirement
is at the discretion of the remuneration committee.
The current minimum shareholding requirements are 200%
of base salary, calculated on a £15.71 share price at the
start of FY19, when this holding requirement was
introduced.
Number of shares
Minimum
Requirement
Shares held
as 30 July 20231
28,000
76,000
22,916
41,000
85,921
358,337
72,918
30,774,709
B Whitley
J Hutson
J Ullman
T Martin
1 as per Directors and connected persons’ interests in
shares table below
Difference between the policy for directors and that for
employees
Members of the wider management team may receive
each of the components of remuneration awarded to the
executive directors, although the amounts due for each
component may vary, depending on their level of seniority.
Non-executive directors are not entitled to any component,
other than fees.
The wider employee population of the Company will
receive remuneration which is considered appropriate to
their level of responsibility and performance.
Withholding and recovery of awards
Awards made under the bonus scheme and the deferred
bonus scheme may be reclaimed, in separately disclosed
circumstances of misstatement or misconduct.
In the event of serious misstatement or misconduct, the
remuneration committee can stop bonuses from being paid
and prevent share awards from vesting. The remuneration
committee will make reasonable judgement, based on the
facts at hand. Any actions taken will be at the discretion of
the remuneration committee.
70
ANNUAL REPORT AND FINANCIAL STATEMENTS 2023
J D WETHERSPOON PLC
Non-executive directors
The non-executive directors hold their positions, pursuant
to letters of appointment dated 4th November 2022, with a
term of 12 months.
The annual variable values include the cash bonus which
may be achievable. In the case of ‘expected’ an average
percentage achieved over the 7 years prior to FY20 has
been used.
DIRECTORS’ REMUNERATION REPORT
If their appointment is terminated early, non-executive
directors are entitled to the fees to which they would have
been entitled up to the end of their term. They do not
participate in the Company’s bonus or share schemes.
Their fees are determined by the executive directors,
following consultation with professional advisers, as
appropriate.
Employee directors
The employee directors hold their positions, pursuant to
letters of appointment dated 9 December 2021, with a term
of three years.
External appointments
Executive directors are not allowed to take external
appointments without the prior consent of the Company.
The Company has not released any executive directors to
serve as non-executive director elsewhere.
Illustration of the application of the
remuneration policy
The charts below set out the composition of the chairman
and executive directors’ remuneration packages in £000,
at a minimum, a reasonable expectation target and as a
possible maximum:
Tim Martin
Maximum
Expected
Minimum
100%
100%
100%
£338
£338
£338
£0
£100
£200
£300
John Hutson
Maximum
Expected
Minimum
40%
52%
77%
15%
43%
£1,913
4%
19%
32%
£987
£1,495
£0
£400
£800 £1,200 £1,600 £2,000
Ben Whitley
Maximum
Expected
Minimum
39%
50%
76%
15%
44%
£751
5%
21%
42%
£381
£584
£0
£200
£400
£600
£800
James Ullman
40%
52%
78%
Maximum
Expected
Minimum
17%
43%
£546
5%
19%
32%
£285
£428
£0
Fixed
£200
£400
£600
Annual variable
Long-term incentive
The fixed annual values include:
Fixed annual salary, benefits and allowances, in line
with those outlined in the policy section, and based on the
salaries applicable as at 30 July 2023
The long-term incentive plan values include:
The fixed 25% awarded under the Company’s
share incentive plan
An average achieved in respect of the
deferred bonus scheme over the last five years
Payments for loss of office
The Company’s policy is that the period of notice for
executive directors will not exceed 12 months; accordingly,
the employment contracts of the executive directors are
terminable on 12 months’ notice by the Company or six
months’ notice by a director.
In the event of gross misconduct, the Company may
terminate a director’s employment without notice or
compensation.
In the event of a director’s departure, the Company’s policy
on termination payments is as follows:
The Company will seek to ensure that no more is paid
than is warranted in each individual case
Salary payments will be limited to notice periods
There is no entitlement to bonus paid (or associated
deferred shares or SIPs) following notice of termination
The committee’s normal policy is that, where the
individual is considered a ‘good leaver’, a prorated bonus
may be paid
The Company may enable the provision of outplacement
services to a departing director
Retirement policy
The Company does not have a mandatory retirement age.
Employees wishing to retire should be aged at least 55
years at the date of leaving (the minimum age a person
can access a workplace pension) and serve their
contractual notice period. Retiring employees are
permitted to retain any unvested shares held in any
Company scheme.
Consideration of employment conditions
elsewhere in the Company
The committee receives information on salary increases,
bonus payments and other benefits available at the
Company. These are taken into consideration when
conducting the review of executive remuneration, although
no formal consultation with employees is undertaken in this
regard.
Consideration of shareholders’ views
Any views in respect of directors’ remuneration expressed
to the Company by shareholders have been, and will be,
taken into account in the formulation of the directors’
remuneration policy.
Details of votes cast for and against the resolution to
approve last year’s remuneration report and any matters
discussed with shareholders during the year are provided
in the annual report on remuneration.
J D WETHERSPOON PLC
ANNUAL REPORT AND FINANCIAL STATEMENTS 2023
71
DIRECTORS’ REMUNERATION REPORT
Annual report on remuneration
The table below sets out in a single figure the total amount of remuneration, on a cash basis, received by each director for the
year ended 30 July 2023.
Single-figure table – audited
Salary/fees
Taxable
benefits1
2023
£000
2022 2023 2022
£000 £000 £000
2023
£000
Executive
directors
J Hutson
S Cacioppo
B Whitley
J Ullman
Non-executive
directors and
chairman
T R Martin
B Thorne
D van Gene
R Beckett
H Morley
D Whittingham
H Simmons
638
67
255
180
638
358
250
45
53
10
30
26
54
38
29
9
1,140 1,291
119
130
324
324
14
13
54
54
16
54
8
8
54
54
54
54
5
5
–
–
–
–
–
–
–
–
–
–
–
–
518
550
14
13
Total
1,658 1,841
133
143
–
–
–
–
–
–
–
–
–
–
–
–
–
–
Performance
bonus2
Long-term
incentives4
2022 2023 2022
£000 £000 £000
Pension
contributions3
2023
2022
£000
£000
Total
Total Fixed
Total
Variable
2023
£000
2022
£000
2023
£000
2022 2023 2022
£000 £000 £000
–
–
–
–
277
30
84
64
223
125
62
–
104
102 1,072 1,017
795
11
33
25
57
30
6
118
402
295
578
371
60
88
318
231
794
453
309
60
277
30
84
64
223
125
62
–
–
455
410
173
195 1,887 2,026 1,432 1,616
455
410
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
338
337
338
337
54
54
16
54
8
8
54
54
54
54
5
5
54
54
16
54
8
8
54
54
54
54
5
5
–
517
563
517
563
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
455
410
173
195 2,404 2,589 1,949 2,179
455
410
1) Taxable benefits include car allowances and a contribution towards rail travel for Tim Martin, as well as
private health and fuel expenses for executive directors. In respect of the element for pub calls made to monitor standards, 5%
was paid, in line with policy.
2) No bonus was received under the profit growth element of the bonus scheme, in line with policy. This bonus is only awarded
to the executive directors and not the employee directors, Hudson Simmons and Deborah Whittingham.
3) Existing executive directors receive either pension contributions, equivalent to 12% of salary, to the stakeholder pension plan
or salary in lieu of pension contributions. Additional pension payments are made, equivalent to 2% of salary for 25–29 years’
service, a further 2% for 30–34 years’ service and so on for every additional five years’ service. John Hutson, Ben Whitley and
James Ullman took, in salary, the portion of their Company pension contribution which was above the annual cap.
4) The amount in the table under long-term incentives, includes the monetary value of the share awards which have taken place
during the period for both SIP and RSP payments which took place during October 2022 and March 2023.
5) Su Cacioppo retired on the 7 October 2022. Her remuneration is shown up to the end of her appointment. Sir Richard Beckett
resigned from the board on 17 November 2022.
6) Deborah Whittingham and Hudson Simmons were appointed as employee directors on 20 December 2021. In addition to the
employee director’s fees above, both received earnings from the company as an employee.
7). The above amounts are on a cash basis, and agree to the directors’ payslips for the financial year ended 30 July 2023.
Please refer to the following page for bonuses accrued, but not paid, during the period.
The final amount received by executive directors for long-term incentive awards will be affected by future changes in the
Company’s share price. A 50% increase in the share price between the award date and the vesting date would increase the
value of the award by 50%. Conversely, a 50% reduction would reduce the value of the award by 50%.
72
ANNUAL REPORT AND FINANCIAL STATEMENTS 2023
J D WETHERSPOON PLC
DIRECTORS’ REMUNERATION REPORT
Details of targets applicable during the year are disclosed in the directors’ remuneration policy statement. The resultant
percentages against each of the bonus measures achieved are shown below, with the percentage awarded for each director
being the same.
Profit growth
Total performance bonus
Maximum
Awarded
B Whitley
£
J Hutson
£
J Ullman
£
45.0%
45.0%
8.25%
8.25%
21,038
21,038
52,665
52,665
14,850
14,850
Employee share scheme
25.0%
25.0%
63,750
159,581
43,115
Employee share scheme – long service*
Employee share scheme – long service**
Deferred Bonus scheme***
Total long term incentives
Total
5.0%
5.0%
10.0%
10.0%
100.0%
100.0%
140.0%
180.0%
-
-
255,000
318,750
339,788
-
8,623
63,832
-
638,366
180,000
861,779
914,444
231,738
246,588
*James UIlman received an additional 5% as he has completed 25 years’ service with the company.
**John Hutson received an additional 10%, as he has completed 30 years’ service with the Company.
***Amounts included vest in three equal tranches in each of 2023, 2024 and 2025. The award has been accrued but not yet
granted.
Long-term incentive awards in the year – audited
Number of shares
*Share
Incentive
Plan1
11,943
42,320
9,755
64,018
**Deferred
Bonus
Scheme2
16,881
42,482
11,488
Total
28,824
84,802
21,243
70,861
134,869
Fair value in £
Share
Deferred
Incentive
Plan
63,115
223,414
51,738
338,267
Bonus
Scheme
115,531
290,749
78,623
Total
178,646
514,162
130,360
484,902
823,169
B Whitley
J Hutson
J Ullman
1 Share incentive plan includes shares granted in October 2022 and March 2023. These where awarded at an average share
price of £5.34, three days before grant; shares will vest three years after grant.
2 Deferred bonus scheme includes tranche two of the 2022 award and tranche one of the 2023 award. The fair value and share
calculation for each year is as follows:
-
-
The 2022 award was granted at a share price of £4.67, which was the average share price five days before
granted. The represented fair value of the 2022 tranche two awarded shares has been calculated using a share
price of £6.84, which is the average share price one week before announcement of the accounts.
The 2023 deferred bonus scheme has not yet been granted, the figures above represent the accrual. The grant
date will be 3 November 2023. The represented fair value of the 2023 tranche one awarded shares has been
calcaulted as one third of the total Deferred Bonus scheme awarded for financial year. The number of shares
awarded has been calculated using a share price of £6.84, which is the average share price one week before
announcement of the accounts.
All awards have no further performance conditions attached, except to be employed by the Company at the vesting date.
J D WETHERSPOON PLC
ANNUAL REPORT AND FINANCIAL STATEMENTS 2023
73
DIRECTORS’ REMUNERATION REPORT
Directors and connected persons’ interests in shares: audited:
The total interests of the directors in the shares of the Company, as at 30 July 2023, were as follows:
Ordinary shares of 2p each, held beneficially
T R Martin
B Whitley
J Hutson
J Ullman
H Simmons
D Whittingham
B Thorne
D van Gene
H Morley
Shares1
30,774,709
17,726
165,617
24,654
1,189
3,868
2,050
3,777
8,611
Share Incentive
Plan2
-
22,014
76,664
16,522
3,006
6,591
-
-
-
Deferred Bonus
Scheme3
-
46,181
116,056
31,742
-
-
-
-
-
2023
30,774,709
85,921
358,337
72,918
4,195
10,459
2,050
3,777
8,611
1 Shares included are all those vested as at 30 July 2023.
2 Share Incentive Plan includes unvested awarded shares under the company Share Incentive Plan.
3 Deferred Bonus Scheme Includes all three tranches of the 2023 award which has been accrued but not yet granted and
remaining two tranches of 2022 award currently unvested.
Since 30 July 2023, Harry Morley has purchased 6,389 shares and Tim Martin has bought 968,544 shares. Both transactions
were outside of a closed period.
Partnership shares
Ben Whitley and Deborah Whittingham are participants of the partnership share scheme and acquired 328 shares each in the
year. John Hutson is a participant in the partnership share scheme and acquired 329 shares in the year. The market price of the
shares purchased ranged 427.0 – 751.0p.
Partnership shares are shares which can be purchased by individuals who work in the Company for a duration of time.
Participants can elect to purchase these shares which come out each employee’s payroll.
Performance graph – non-audited information
This graph shows the total shareholder return (with dividends reinvested) of a holding of the Company’s shares against a
hypothetical holding of shares in the FTSE All-Share Travel & Leisure sector index. The directors selected this index, as it
contains most of the Company’s competitors and is considered to be the most appropriate index for the Company.
Growth in the value of a hypothetical £100 holding since July 2008, based on 30-trading-day average values
i
l
)
£
(
g
n
d
o
h
0
0
1
£
l
a
c
i
t
e
h
t
o
p
y
h
f
o
e
u
a
V
l
700.0
620.0
540.0
460.0
380.0
300.0
220.0
140.0
60.0
Jul-08 Jul-09 Jul-10 Jul-11 Jul-12 Jul-13 Jul-14 Jul-15 Jul-16 Jul-17 Jul-18 Jul-19 Jul-20 Jul-21 Jul-22 Jul-23
Series1
Series2
74
ANNUAL REPORT AND FINANCIAL STATEMENTS 2023
J D WETHERSPOON PLC
Chief executive officer’s remuneration
Single figure
of total
remuneration
Performance
bonus
payment
achieved
against
maximum
possible
John Hutson
£000
%
Long-term
incentives
scheme
shares
vesting
against
maximum
possible*
%
2023
2022
2021
2020
2019
2018
2017
2016
2015
2014
2013
* As long-term incentive scheme shares issued have no
further performance criteria attached, all shares previously
awarded vest in full when the vesting date is reached.
1,072
1,017
813
738
1,035
1,490
1,698
1,187
1,202
741
1,079
100
100
100
100
100
100
100
100
100
100
100
-
-
-
-
10
29
85
21
10
19
43
The following table compares the change in remuneration
of all the directors, non-executive directors and chairman
with that of all employees
Change in
annual
salary
%
Ben Whitley
John Hutson
James Ullman
Tim Martin
Ben Thorne
Debra Van Gene
Harry Morley
Deborah Whittingham
Hudson Simmons
Total Employees
2
-
-
-
-
-
-
-
-
6.7
Change in
taxable benefits
Change in
annual
bonus
%
%
3.4
(1.9)
-
7.7
-
-
-
-
-
14.2
-
-
-
-
-
-
-
-
-
35.7
Change in total employees’ salary is calculated based on
the amounts paid to all employees adjusted for
redundancy and employer’s national insurance payments,
divided by the number of hours worked by employees.
Chief executive’s pay ratios
The table below shows the chief executive’s total
remuneration, as disclosed in the single-figure table,
compared with that of full-time equivalent employees’
median (50th), 25th and 75th percentiles in the UK.
Pay ratios table
DIRECTORS’ REMUNERATION REPORT
It is believed that using a consistent methodology with that
of gender pay reporting will produce the most
understandable ratios.
There has been no comparison between dividends and
share buy-backs this year, as there has been no such
events in the current and previous financial year.
Remuneration committee
The remuneration committee comprises the following
independent directors: Debra van Gene (chair), Ben
Thorne and Harry Morley.
The committee meets regularly and considers executive
directors’ remuneration annually. It approves all
contractual and compensation arrangements for the
executive directors, including performance-related
payments.
Shareholders’ vote on 2022 directors’
remuneration report
The table below shows the voting outcomes at the 17
November 2022 AGM for the directors’ remuneration
report.
For
Against
Abstentions
Total cast
Number of
% of
votes
94,480,039
4,001,408
31781
votes
95.91%
4.06%
0.03%
98,513,228 100.00%
All votes at the AGM were passed with at least
85% of the cast votes.
Shareholders’ vote on 2021 directors’
remuneration policy
The table below shows the voting outcomes at the 18
November 2021 AGM for the directors’ remuneration
report.
For
Against
Abstentions
Total cast
Number of
votes
93,104,202
7,666,690
37,197
% of
votes
92.36%
7.61%
0.03%
100,808,089
100.00%
All votes at the AGM were passed with at least 80% of the
cast votes.
The Company has stated, on numerous occasions, its view
that the Company benefits from the experience of directors
who have served more than nine years and does not agree
that it impacts the individual’s independence.
Year
2023
2022
Method
Option B
Option B
25th
54:1
47:1
50th
49:1
45:1
75th
45:1
41:1
The company has continued to engage with shareholders
regarding its views on board composition and intends
doing so going forwards.
The Company has used the same data used for gender
pay reporting to determine the median, 25th and 75th
percentile employees. This method is called option B in
The Companies (Miscellaneous Reporting) Regulation
2018.
By order of the board
Nigel Connor
Company Secretary
6 October 2023
Company Secretary
J D WETHERSPOON PLC
ANNUAL REPORT AND FINANCIAL STATEMENTS 2023
75
CORPORATE GOVERNANCE
Introduction
This section of the report sets out how the Company has
applied the relevant principles and provisions of the 2018
code and identifies and explains where it has not.
1. Board leadership and Company purpose (page 77)
2. Division of responsibilities (page 78)
3. Composition, succession and evaluation (page 80)
4. Audit, risk and internal control (pages 79-81)
5. Remuneration (pages 67-75).
Statement of compliance
The board believes that the Company has been compliant
with the code throughout the 52 weeks ended 30 July
2023, except as described below.
3 – Dialogue with shareholders
The code indicates that the chairman should discuss
governance and strategy with major shareholders. The
chairman has had many discussions with shareholders
since the Company’s flotation in 1992, although corporate
governance has rarely been raised. The majority of
discussions with major shareholders now takes place
among the CEO, finance director and shareholders. These
discussions are relayed to, and considered by, the board.
The chairman is available for discussion with major
shareholders, when requested.
10 – Non-executive directors’ independence
Debra van Gene has served more than nine years on the
board and so may not be considered independent under
the code. The board considers that her performance as a
non-executive director continues to be effective.
She contributes significantly as a director through her
individual skills, considerable knowledge and experience of
the Company. She demonstrates strong independence in
how she discharges her responsibilities. Consequently, the
board has concluded that, despite the length of tenure,
there is no association with management which could
compromise her independence.
19 – Chairman’s term
Tim Martin has served more than nine years as chairman
of the board. The board considers that his considerable
knowledge and experience from founding the Company
and leading it for over 40 years have had a positive effect
on its performance.
The board believes that it is in the interest of the Company
and its shareholders for Tim Martin to remain as chairman.
21 – External board evaluation
A requirement of corporate governance is a
recommendation for a third party to evaluate the
functioning of the board. Delegation of a key task of the
chairman and of the directors of the board itself to a third
party, often with little or no connection with the Company’s
business and with a very limited knowledge of the
directors, may be a dangerous step for a board to take. It
is the function of the board itself to evaluate its own
performance – and that performance is most evident from
the results of the underlying business.
For this reason, it is believed best for the Company to
continue with its current system of ‘self-evaluation’.
30 – Long-term shareholdings
To promote long-term shareholdings by executive directors
and align their interests with shareholders, the code
requires that any share awards given to executive directors
should have a minimum vesting period of five years. The
executive directors receive shares under schemes which
are open to other employees and have vesting periods of
under five years. The Company has disclosed details of
the share award schemes in the remuneration policy on
pages 68-69. To promote long-term shareholding by
executive directors, the Company requires directors to hold
a minimum number of shares as disclosed on page 70.
Restrictions are in place on the sale of shares, if directors
have not achieved the minimum holding.
38 – Alignment of pension contribution rates of executive
directors with wider workforce
The code states that pension contribution rates for
executive directors and payments in lieu, should be
aligned with those available to the workforce. As set
out in the 2020 remuneration policy, the company took
the decision that existing executive directors would
continue to receive 12% of base salary on the basis
that it had never been excessive, is lower than the average
for a FTSE 250 Company and is not disproportionate to
the wider workforce. In August 2022, the Company
changed its employee pension policy to reward long
service rather than being based on rank/job title. As the
relevant executive directors have the required long service
entitlements, their existing pension contributions are now
aligned with the policy applicable to the wider workforce.
A full version of the code is available on the official website
of the Financial Reporting Council: frc.org.uk
Board leadership and Company’s purpose
The board of directors
Tim Martin, chairman
John Hutson, chief executive officer
Ben Whitley, finance director
James Ullman, personnel and retail auditor director
Debra van Gene, non-executive director
Harry Morley, non-executive director
Ben Thorne, non-executive and senior independent
director
Deborah Whittingham, employee director
Hudson Simmons, employee director
Su Cacioppo retired from the company and the board on 7
October 2022.
Sir Richard Beckett KC retired from the board on 17
November 2022.
Will Fotheringham and Emma Gibson attend board
meetings in their capacity as associate employee directors.
The board considers each of Debra van Gene, Ben Thorne
and Harry Morley to be independent.
76
ANNUAL REPORT AND FINANCIAL STATEMENTS 2023
J D WETHERSPOON PLC
CORPORATE GOVERNANCE
Biographies of all board directors are on page 63 and on
the Company’s website: jdwetherspoon.com
Legal matters
Institution of legal proceedings, where costs
exceed certain values
Secretarial
Call of all shareholders’ meetings
Delegation of board powers
Disclosure of directors’ interests
General
Board framework of executive
remuneration and costs
Culture and values
The board monitors the culture and the values of the
Company in several ways:
Appointing employee directors to the board
Meeting and talking to employees from the pubs
during pub visits, regional meetings and at weekly
head office meetings
Area managers attending the opening section of
the board meetings to discuss issues relating to
pub operations and the Company generally
Reviewing the outcome of weekly discussion
meetings of selected pub and area managers led
by senior Company employees
Reviewing whistleblowing reports and outcomes
via the audit committee
Division of responsibilities
It is not helpful, in a company like Wetherspoon, for there
to be high barriers or exaggerated distinctions between the
role of chairman and that of chief executive officer.
However, some general distinctions are outlined overleaf
The chairman regularly meets the non-executive directors
and evaluates the performance of the board, its
committees and its individual directors.
The Company’s purpose and how it establishes its values
and culture through engagement with employees are
disclosed on page 47.
Directors’ conflicts of interest
The board expects the directors to declare any conflicts of
interest and does not believe that any material conflicts of
interest exist.
Relations with shareholders
The board ensures that all its members are kept aware of
both the views of major shareholders and changes in the
major shareholdings of the Company. Efforts made to
accomplish effective communication include:
Annual general meeting, considered to be an important
forum for shareholders to raise questions with the board
Regular feedback from the Company’s stockbrokers
Interim, full and ongoing announcements circulated to
shareholders
Any significant changes in shareholder movement being
notified to the board by the company secretary, when
necessary
The company secretary maintaining procedures and
agreements for all announcements to the stock market
A programme of regular meetings between investors
and directors of the Company
Matters reserved for the board
The following matters are reserved for the board:
Board and management
Structure and senior management responsibilities
Nomination of directors
Appointment and removal of chairman and
company secretary
Strategic matters
Strategic, financing or adoption of new business
plans, in respect of any material aspect of the
Company
Business control
Agreement of code of ethics and business
practiceInternal audit
Authority limits for heads of department
Operating budgets
Approval of a budget for investments and capital
projects
Changes in major supply contracts
Finance
Raising new capital and confirmation
of major facilities
The entry into asset-financing transactions
Specific risk-management policies, including
insurance, hedging and borrowing limits
Final approval of annual and interim accounts and
accounting policies
Appointment of external auditors
J D WETHERSPOON PLC
ANNUAL REPORT AND FINANCIAL STATEMENTS 2023
77
CORPORATE GOVERNANCE
Chairman’s responsibility
Chief executive officer’s responsibility
The chairman is responsible for the smooth running of
the board and ensuring that all directors are fully
informed of matters relevant to their roles
Delegated responsibility of authority from the Company to
exchange contracts for new pubs and to sign all contracts
with suppliers
The chief executive officer is responsible for the smooth daily
running of the business
Developing and maintaining effective management controls,
planning and performance measurements
Providing support, advice and feedback to the chief
executive officer
Maintaining and developing an effective organisational structure
Supporting the Company’s strategy and encouraging the
chief executive officer with that strategy’s development.
External and internal communications, in conjunction with the
chairman, on any issues facing the Company
Chairing general meetings, board meetings, operational
meetings and agreeing on board agendas and ensuring
that adequate time is available for discussion of agenda
items
Management of the chief executive officer’s contract,
appraisal and remuneration, by way of making
recommendations to the remuneration committee
Providing support to executive directors and senior
managers
of the Company
Helping to provide the ‘ethos’ and ‘vision’ of the
Company, after discussions and debates with employees
of all levels, customers and shareholders.
Implementing and monitoring compliance with board policies
Timely and accurate reporting of the above to the board
Recruiting and managing senior managers in the business
Developing and maintaining effective risk-management
and regulatory controls
Helping to provide information on customers and
employees’ views by calling on pubs
Maintaining primary relationships with shareholders and investors
Helping to make directors aware of shareholders’
concerns
Chairing the management board responsible for implementing the
Company’s strategy
Helping to ensure that a culture of openness and debate
exists in the Company
Ensuring compliance with the London Stock Exchange
and legal and regulatory requirements, in consultation
with the board and the Company’s external advisers
The board has several established committees as set out below. The board met nine times during the year ending 30 July 2023.
Attendance of the directors,non-executives, employee and associate employee directors where appropriate, is shown below.
Board
Audit
Remuneration
Nomination
Number of meetings held in the year
Tim Martin
John Hutson
Ben Whitley
Debra van Gene
Harry Morley
Nigel Connor
Ben Thorne
James Ullman
Deborah Whittingham
Will Fotheringham
Hudson Simmons
Emma Gibson
9
8
9
9
9
8
9
9
9
9
9
9
9
4
N/A
N/A
4
4
4
4
4
4
N/A
N/A
N/A
N/A
1
N/A
N/A
N/A
1
1
N/A
1
N/A
N/A
N/A
N/A
N/A
1
N/A
1
1
1
1
N/A
1
1
N/A
N/A
N/A
N/A
78
ANNUAL REPORT AND FINANCIAL STATEMENTS 2023
J D WETHERSPOON PLC
CORPORATE GOVERNANCE
Audit, risk and internal control
Audit committee
The committee’s primary role is to assist the board
in the provision of effective governance over the
Company’s financial reporting, risk management and
internal control; in particular, it performs the
following activities:
Assumes direct responsibility for the appointment,
compensation, resignation and dismissal of the external
auditors, including review of the external audit, its cost and
effectiveness
Reviews the independence of the external auditors,
including consideration of the level of non-audit work
carried out by them
Reviews the scope and nature of the work to be
performed by the external auditors, before audit
commences
Reviews the half-year and annual financial statements
Ensures compliance with accounting standards and
monitors the integrity of the financial statements and
formal announcements relating to the financial
performance of the Company and supports the board in its
responsibility to ensure that the annual financial
statements are fair, balanced and understandable
Reviews the internal audit plan, which is updated to
reflect the changing needs of the business and the
concerns of management and the audit committee
Reviews and raises questions on all internal audit
reports and requests management to adjust the
prioritisation of mitigating actions, as needed. Areas
reviewed this year included supply chain and distribution
centre, pub closures, system security, IT, cyber-crime,
changes in business environment, decline in like-for-like
sales volume and escalating costs of labour
Reviews, with the support of specialists as required,
controls over access to the IT systems used around the
business and agrees with management on the timing of
any mitigating actions to be carried out
Reviews and monitors procedures in relation to the
Company’s whistleblowing policy
Reviews and questions the effectiveness of
all risk-management and internal control systems
Reviews the retail audit director’s statement on
internal controls on completed audits
Considers the overall impact on the business of the
matters arisen from the various reviews described above
and any other matters which the auditors, internal or
external, may bring to the attention
of the committee
Ensures that all matters, where appropriate, are raised
and brought to the attention of the board
Significant financial reporting items
The accounting policies of the Company and the estimates
and judgements made by management are assessed by
the committee for their suitability. The following areas are
those considered by the committee, to be the most
significant:
The provision for the impairment of fixed assets –
several judgements are used in making this calculation,
primarily on expected future sales and profits. The
committee received reports and questioned management
on the calculations made and the assumptions used
Significant one-off items of expense or income are
reported as separately disclosed on the face of the income
statement. All separately disclosed items are reviewed by
the committee
The committee reviewed the financial plans, modelled
scenarios and assumptions made by the Company in
support of the presentation of the financial statements on a
going concern basis
The committee reviewed and raised questions
on the calculations made by the Company in relation to the
hedge accounting and effectiveness for interest-rate
swaps. The committee is satisfied that the judgements
made by management are reasonable and that appropriate
disclosures have been included in the accounts.
Non-audit services
During the year, the Company made no use of specialist
teams from Grant Thornton UK LLP, relating to accounting
or tax services. The fees paid to Grant Thornton UK LLP
for non-audit services were £82,000 (2022: £55,000),
relating to interim review procedures. The use of Grant
Thornton UK LLP for non-audit work is monitored regularly,
to achieve the necessary independence and objectivity of
the auditors. Where the auditors provide non-audit
services, their objectivity and independence are
safeguarded by the use of different teams. See note 2 on
page 13, for a breakdown of the auditor’s remuneration for
audit and non-audit services.
External auditors
The audit committee is responsible for making
recommendations to appoint, reappoint or remove external
auditors. Following a review by the audit committee, the
board agreed to recommend, at the AGM in November
2023, the reappointment of Grant Thornton UK LLP as
external auditors.
Audit-tendering and rotation
The audit committee keeps under review the regulatory
requirements on audit-tendering and rotation.
The Company will be required to change its audit firm for
the year ending 25 July 2038, at the latest. The audit was
last tendered in 2018 – and Grant Thornton UK LLP has
been in place as the Company’s auditor for six years.
The disclosures provided in this report constitute the
Company’s statement of compliance with the requirement
of the statutory audit services for large companies market
investigation (mandatory use of competitive tender
processes and audit committee responsibilities) order
2014.
Effectiveness of external auditors
The audit committee assesses the ongoing effectiveness
of the external auditors and audit process, on the basis of
meetings and internal reviews with finance and other
senior executives.
J D WETHERSPOON PLC
ANNUAL REPORT AND FINANCIAL STATEMENTS 2023
79
CORPORATE GOVERNANCE
In reviewing the independence of the external auditors, the
audit committee considers several factors. These include
the standing, experience and tenure of the external
auditors, the nature and level of services provided and
confirmation from the external auditors that they have
complied with relevant UK independence standards. The
terms of reference of the audit committee are available on
the Company’s website.
reviews, assessments and management of significant risks
took place throughout the year under review and up to the
date of the approval of the annual report.
The Company has an internal audit function
which is discharged as follows:
Regular audits of the Company’s stock
Unannounced visits to pub sites
Risk management
The board is responsible for the Company’s risk-
management process.
Monitoring systems which control the Company’s cash
Health and safety visits, ensuring compliance
The internal audit department, in conjunction with feedback
from senior management of the business functions,
produces a risk register annually.
The identified risks are assessed, based on the likelihood
of a risk occurring and the potential impact to the business,
should the risk materialise.
The retail audit director determines and reviews the
risk-assessment process and will communicate the
timetable annually.
The Audit Committee reviews the risk register at each
meeting, with a schedule of audit work agreed on, on a
rolling basis. The purpose of this work is to review, on
behalf of the Company and the board, those key risks and
the systems of control necessary to manage such risks.
Where recommendations are made for changes in
systems or processes to reduce risk, internal audit will
follow up regularly to ensure that those recommendations
are implemented.
No significant failings of internal control were identified
during these reviews.
A summary of the financial risks and treasury policies can
be found on pages 49-50, together with other risks and
uncertainties.
Emerging risks
The Company monitors emerging risks through the receipt
of advice and feedback from head office and pub staff,
customers, suppliers, and several external advisers and by
maintaining an awareness of the wider economic, political
and social environment.
Any potential risks identified will be discussed in the
relevant internal meetings, where any potential impact on
the business will be considered. Any significant risks
identified will be added to the Company’s risk register.
Internal control
During the year, the Company provided an internal audit
and risk-management function. The creation of a system of
internal control and risk mitigation is a key part of the
Company’s operations and culture. The board is
responsible for maintaining a sound system of internal
control and reviewing its effectiveness.
The function can only manage, rather than entirely
eliminate, the risk of failure to achieve business objectives.
It can provide only reasonable, and not absolute,
assurance against material misstatement or loss. Ongoing
with Company procedures
Reviewing and assessing the impact of
legislative and regulatory change
Risk-management process, identifying key risks facing
the business
The Company has key controls, as follows:
Authority limits and controls over cash-handling,
purchasing commitments and capital expenditure
A budgeting process, with a detailed 12-month operating
plan and a mid-term financial plan, both approved by the
board
Business results reported weekly, with a report
compared with budget and the previous year
Forecasts prepared regularly throughout the year,
for review by the board
Complex treasury instruments are not used. The
Company, from time to time, as stated in this report and
accounts, enters into swap arrangements which fix interest
rates at certain levels for a number of years and enters into
supply arrangements with fixed prices for electricity and
gas, for example, which run for between one and three
years
An annual review of the amount of external insurance
which it obtains, bearing in mind the availability of such
cover, its costs and the likelihood of the risks involved
Regular evaluation of processes and controls,
in relation to the Company’s financial
reporting requirements
The directors confirm that they have reviewed the
effectiveness of the system of internal control.
Remuneration and nomination
Remuneration committee
The committee is responsible for determining the
remuneration received by executive directors and senior
managers. When setting levels of remuneration, the
committee seeks to ensure that they are sufficient to
attract and retain people with the necessary skills and
experience. The committee seeks to ensure that
remuneration is not excessive and is in line with amounts
paid by comparable companies. In setting executive
directors’ remuneration, the committee takes into account
wider workforce remuneration policies throughout the
Company, with many elements extending throughout much
of the Company at varying levels according to seniority
and length of service.
80
ANNUAL REPORT AND FINANCIAL STATEMENTS 2023
J D WETHERSPOON PLC
CORPORATE GOVERNANCE
personnel and management practices which ensure that
no individual receives less favourable treatment
on the grounds of his or her race, religion or belief,
nationality, ethnic origin, age, disability, gender
(including gender reassignment), sexual orientation, part-
time status or marital status.
Employees who become disabled will be retained, where
possible, and retrained, where necessary.
The Company has established a range of policies,
covering issues such as diversity, employees’ well-being
and equal opportunities, aimed at ensuring that all
employees are treated fairly and consistently.
The Company has also established the following network
groups to foster discussion and generate ideas about
these issues:
LGBTQIA+
Women
Race and ethnic diversity
Mental health and well-being
Internal communications seek to ensure that staff are well
informed about the Company’s progress, through the use
of regular digital newsletters, and staff liaison meetings, at
which employees’ views are discussed and taken into
account.
All pub staff participate in bonus schemes related
to sales, profits, stocks and service standards.
Approved by order of the board.
Nigel Connor
Company Secretary
6 October 2023
The remuneration policy operated as intended during the
year – no changes were made and normally no discretion
is applied.
The directors’ report on remuneration is set out on pages
67-75.
Directors’ remuneration is clearly presented in the
accounts. The remuneration policy is clearly stated, with
the calculation of performance measures explained. The
remuneration policy does not rely overly on target-based
incentives, with share awards normally given based on
profits, earnings per share and owners’ earnings growth,
as well as some shares awarded without performance
targets as part of a Companywide scheme. However,
during the current year no such award was given based on
such targets.
Awards made are predictable and within a range of values.
The remuneration committee can apply discretion in the
application of awards.
The terms of reference of the remuneration committee are
available on the Company’s website.
Nomination committee
The committee meets at least annually and:
reviews the board structure, size, diversity (including
gender), composition and successional needs, keeping
under review the balance of membership between
executive and non-executive and the required blend
of skills, experience, knowledge and independence
on the board.
formally proposes any new executive or non-executive
directors for the approval of the whole board, following a
reasonable process for such an appointment. This includes
a review of skill set, industry knowledge and experience to
meet the strategic needs of the business.
reviews the leadership and successional needs of the
organisation, with a view to ensuring the long-term
success of the Company.
ensures that all directors offer themselves for
annual re-election by shareholders.
No director is involved in any decision about his or her own
reappointment. In carrying out these activities, the non-
executive directors follow the guidelines of the Chartered
Governance Institute and comply with the code.
The terms of reference of the nomination committee are
available on the Company’s website.
Employment policies
Staff are encouraged to make a commitment to the
Company’s success and to progress to more senior roles
as they develop.
In selecting, training and promoting staff, the Company has
to take account of the physically demanding nature of
much of its work. The Company is committed to equality of
opportunity and to the elimination of discrimination in
employment.
The Company aims to create and maintain a working
environment, terms and conditions of employment and
J D WETHERSPOON PLC
ANNUAL REPORT AND FINANCIAL STATEMENTS 2023
81
INFORMATION FOR SHAREHOLDERS
Ordinary shareholdings at 30 July 2023
Substantial shareholdings
Shares of 2p each
Number of
shareholders
% of total
shareholders
Number
% of total
shares held
Up to 2,500
2,501–10,000
10,001–250,000
250,001–500,000
500,001–1,000,000
Over 1,000,000
3,534
87.8
1,484,185
1.2
240
184
27
16
23
6.0
1,177,455
0.9
4.6
10,858,932
8.4
0.7
10,319,693
8.0
0.4
10,687,929
8.3
0.6
94,221,961
73.2
4,024
100.0
128,750,155
100.0
Substantial shareholdings
The Company has been notified of the following substantial holdings in its share capital at 30 July 2023:
Tim Martin
Columbia Threadneedle Investments
FIL Investment International
MFS Investment Management
J D Wetherspoon plc Company Share Plan*
Artemis Investment Management LLP
Hargreaves Lansdown Asset Management LTD
Fidelity Investments
Number of
ordinary shares
% of share
capital
29,548,779
23.0
7,102,605
5.5
6,519,967
5.1
6,478,832
5.0
6,360,365
4.9
5,600,320
4.3
5,225,961
4.1
5,010,631
3.9
Source: Investec Bank plc. This schedule shows the consolidated shareholdings of individuals and companies, whereas the first
table shows shareholdings by individual holding.
*This represents shares which have been purchased by the Company for the benefit of employees under the SIP. Please see
pages 68-69. This includes vested shares held by employees.
Share prices
01 August 2022
Low
High
30 July 2023
596p
388p
816p
693p
Shareholders’ enquiries
If you have a query about your shareholding, please contact the Company’s registrars directly:
Computershare Investor Services plc: uk.computershare.com/investor
0370 707 1091
Annual report
Paper copies of this annual report are available from the company secretary, at the registered office.
E-mail: investorqueries@jdwetherspoon.co.uk
This annual report is available on the Company’s website: jdwetherspoon.com/investors-home
82
ANNUAL REPORT AND FINANCIAL STATEMENTS 2023
J D WETHERSPOON PLC
COMPANY INFORMATION
Registered office
Wetherspoon House
Central Park
Reeds Crescent
Watford
WD24 4QL
Company number
1709784
Registrars
Computershare Investor Services plc
PO Box 82
The Pavilions
Bridgwater Road
Bristol
BS13 8AE
Independent auditors
Grant Thornton UK LLP
Chartered Accountants and
Statutory Auditors
30 Finsbury Square
London
EC2A 1AG
Solicitors
Macfarlanes LLP
20 Cursitor Street
London
EC4A 1LT
Bankers
Allied Irish Banks
Banco de Sabadell S.A London Branch
Barclays Bank plc
BNP Paribas
Clydesdale Bank plc
Co Operative Rabbobank U.A
Crédit Industriel et Commercial.
Handelsbanken Bank
HSBC Bank plc
Mediobanca S.p.A
MUFG Bank Ltd
National Westminster Bank plc
Santander UK plc
The Governor and Company of the Bank of Ireland
Financial advisers
Investec Bank plc
Rusche Advisors
Stockbrokers
Investec Bank plc
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GLOSSARY
Accrual = charge implemented to account for work that has been done or will be done but not yet invoiced.
AGM = “annual general meeting”. Annual assembly of a company’s stakeholders.
Amortisation = the process of gradually releasing an initial cost or income to the income statement.
APM = “alternative performance measure” Financial measure of historical/future financial performance, other than a
financial measure defined or specified in the applicable financial reporting framework.
CAMRA = “Campaign for Real Ale”. Organisation which promotes real ales, ciders and perries as well as traditional UK
pubs and clubs.
CEO = “chief executive officer”. Individual responsible for making managerial decisions in the company to which he or she
is contracted to.
CJRS = “Coronavirus job retention scheme”. Initiative introduced by the UK Government allowing employers to access
financial support to pay part of their employees’ wages.
CLBILS = “Coronavirus large business interruption loan scheme”. Financial support created by the UK Government during
the COVID-19 pandemic.
EBITDA = “earnings before interest, taxes, depreciation and amortisation”. An alternative performance measure (APM).
Emolument = Salary received as compensation for service of employment.
ESG = “environmental, social and governance”. Set of standards measuring a business’s impact on society.
FRC = “Financial Reporting Council”. Independent regulator in the UK and Ireland responsible for regulating auditors,
accountants and actuaries. It also sets the UK corporate governance and stewardship codes.
Freehold reversion = The term used when purchasing a property which had been leased prior to the purchase.
FTSE = “Financial Times Stock Exchange”. Index tracking the largest companies trading on the London Stock Exchange
(by market capitalization).
FY = “financial year”. For Wetherspoon, the year being reported is 26 July 2021 - 31 July 2022.
GHG = “greenhouse gas”. A gas which absorbs and emits the radiant energy which causes the greenhouse effect.
(Trapping heat in the atmosphere, therefore warming up the planet).
HMRC = ‘Her Majesty’s Revenue and Customs’. Non-ministerial UK Government department responsible for collecting
taxes and paying some forms of state support.
IAS = ‘international accounting standard’. Older accounting standard issued by the International Accounting Standards
Board. IASs were replaced in 2001 by IFRSs.
IASB = ‘International Accounting Standards Board’. Private-sector body developing and approving the international
financial reporting standards (IFRSs).
IBOR = ‘inter-bank offered rate’. Basic rate of interest used in lending among banks on the financial market and as a
reference in setting interest rates on other loans.
IBR = ‘incremental borrowing rate’. Rate of interest which a lessee would have to pay to borrow the funds necessary to
obtain an asset.
IFRIC = ‘international financial reporting standards interpretations committee’. Body which reviews accounting issues, on a
timely basis, which have arisen within the context of current international reporting standards.
IFRS = ‘international financial reporting standards’. Accounting standards issued by the International Accounting Standards
Board.
Impairment = Acknowledging a reduction in the recoverable value of a fixed asset.
ISA = ‘international standards on auditing’. Regulatory standards to be followed when auditing financial information, issued
by the International Auditing and Assurance Standards Board.
KPI = ‘key performance indicators’. Measures which companies use to evaluate a company’s success in a particular
activity in which it engages.
LGBTQIA+ = ‘lesbian, gay, bisexual, transgender, queer/questioning, intersex, asexual, pansexual and allies’. An inclusive
term for people of various genders and sexualities.
LIBOR = ‘London inter-bank offered rate’. Basic rate of interest used in lending among banks on the financial market.
LLP = ‘limited liability partnership’. Type of ownership in which some or all partners have limited liabilities.
NIC = ‘national insurance contributions’. Type of income tax paid by both employees and employers.
Payable = debts owed by the business; liabilities.
PAYE = ‘pay-as-you-earn tax’. Type of income tax paid by an employer on behalf of an employee, after being deducted
from the employee’s salary.
Provision = an amount set aside for known, future liabilities.
Receivable = amounts owed to the business; assets.
Remuneration = total compensation received by an employee fro service of employment.
RNS = ‘Regulatory News Service’. Service which transmits regulatory and non-regulatory information published by
companies and organisations (eg Share Award) to the local market.
SAP = Accounting software used by Wetherspoon.
SIPs = ‘share incentive plan’. An approved, tax-efficient plan which employers can provide to employees to award their
workforce in shares.
SONIA = ‘sterling overnight interbank average rate’. Interest rate paid by banks on unsecured transactions in the UK
market – an alternative measure to LIBOR.
UK GAAP = ‘UK generally accepted accounting practice’. Body of accounting standards published by the UK’s Financial
Reporting Council.
VAT = ‘value-added tax’. Form of tax paid to HMRC on a product/service at each stage of production, distribution and sale
to the end customer.
WACC = ‘weighted average cost of capital’. Rate which a company is expected to pay, on average, to all of its security
holders to finance its assets.
J D WETHERSPOON PLC
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GLOSSARY
J D Wetherspoon plc
Wetherspoon House, Central Park
Reeds Crescent, Watford, WD24 4WL
01923 477777
Jdwetherspoon.com
J D WETHERSPOON PLC
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