Activities

JD Wetherspoon is an operator of managed pubs and is also a player in the budget hotel sector with its Wetherlodge inns with rooms. The Wetherspoon pubs take a “real ale no jukebox” approach while the Lloyd No brand is entertainment-led.

Brands: Lloyds No 1

Timeline

• December 1979: Tim Martin, a 24-year-old law student, founds JD Wetherspoon when he opens his first pub in Muswell Hill, London. The company is named after one of Martin’s tutors.
• 1992: JD Wetherspoon floats on the London Stock Exchange
• 1998: The group opens its first Wetherlodge budget hotel in Shrewsbury, followed by a second in Glenrothes, Fife. Martin hires food critic Egon Ronay to improve the quality of Wetherspoon’s food.
• 1999: Wetherspoon’s opens its first pubs in Northern Ireland, opening venues in Belfast and Ballymena, County Antrim.
• 2000: Wetherspoon’s buys the group of ten Lloyds No 1 pubs from Wolverhampton and Dudley, which are mostly converted banks in city centres.
• 2002: Martin takes on the coffee bar brands by opening Wetherspoon pubs at 10am to sell coffee and breakfasts.
• April 2004: Martin, who has served as chief executive since 1983, returns to the company after a six-month sabbatical as non-executive chairman, with John Hutson as chief executive.

Financial snapshot

Full year
Turnover: £809.9m (2004: £787.1m)
Pre-tax profit: £38.7m (2004: £46.3m)

Half year
Turnover: £406.3m (2005: £403.3m)
Pre-tax profit: £27.4m (2005: £22.6m before exceptional items, £14.6 after exceptional items) 

Financial year end: 24 July 2005
Half-year end: 22 January 2006

Operating data

Total number of pubs: 654 (including 70 Lloyds No 1)

Number of Wetherlodge pubs with letting bedrooms: 11, with 315 bedrooms (in Birmingham, Brigend, Chesterfield, Glenrothes, Henley on Thames, Inverness, Kings Lynn, Monmouth, Salisbury, Shrewsbury, Wigan)

Number of employees: 16,000

Food as a percentage of turnover: 25% (40% in non-smoking venues)

Strategy

"Like-for-like sales in February 2006 increased by 1.9%, in comparison with a decline of the same amount in February 2005. Profits and cash flows continue to be enhanced by the cost reductions outlined in our results announcement of 4 March 2005. The imminent Scottish smoking ban, combined with the potential impact of the football World Cup in June and July 2006, leads us, as previously indicated, to take a cautious view of the possible outcome for the second half of the current financial year.

Source: interim results statement, March 2006

Chief executive

John Hutson

Key directors

Finance director: Jim Clarke
Commercial director: Suzanne Baker
Non-executive chairman: Tim Martin

Contact

PO Box 616
Watford
Hertfordshire
WD1 1YN

Tel: 01923 477777

Website: http://www.jdwetherspoon.co.uk

Commentary

Martin opened his first “real ale, no jukebox” pub in Muswell Hill to reflect the sort of pub he wanted to drink in locally but could not find. Its successful expansion is credited with changing the face of pub retailing at a time when many operators were more focused on brewing than on pubs.

Wetherspoon’s offer is based on low prices, no music or TV, large no-smoking zones, facilities for the disabled, and a strong food offer that is kept on its toes by regular inspections headed up by food critic Egon Ronay. Lloyds No 1 adds a second and very different string to the company’s bow as the entertainment-focused brand offers music and dance floors in city centres.

The company has a good reputation as an employer and was one of the first pub groups to introduce a 48-hour week (in 1995) – ahead of legislation and at a cost of £2m in profits. It provides good quality staff accommodation, training at accredited colleges, and has many of managers who started as bar staff or cleaners.

The group has grown by cherry-picking premises (often unlicensed ones) rather than corporate acquisitions and its expansion has until recently been matched by consistent growth in sales and profits. However, Martin’s new backseat role and a fall in interim profits to March 2005 has rattled the city, while a series of share buy-backs have prompted rumours of a management buy-out (which the company refutes).

Faced with growing competition and spiralling labour an utilty costs, Wetherspoon’s has cut its expansion programme from 50 pubs a year to just 15 for 2005 and scrapped plans to move into the Irish Republic. 

Despite the recent cooling in City attitudes towards the group, JD Wetherspoon was named the second most respected pub and restaurant business (after Greene King) in the peer-reviewed Britain’s Most Admired Companies 2004 rankings, and was listed 21st in its pan-industry top 220.

The group’s pledge to ban smoking in 60 pubs by May 2005 and across the whole estate by May 2006 (two years ahead of Government regulations) has been delayed by the necessity of revamping the kitchens first. This strategy was driven by the realisation that banning smoking depressed beer sales but increased food consumption.