CHAIRMAN’S STATEMENT
f
J D Wetherspoon plc
ANNUAL REPORT AND FINANCIAL STATEMENTS 2023
Contents
Wetherspoon owns
and operates pubs
SECTION 1
throughout the UK
1
Chairman’s statement
and Ireland. The
9
Income statement
9
Statement of comprehensive income
company aims to
1
0
Cash flow statement
provide customers
1
1
Balance sheet
1
2
Statement of changes in equity
with good-quality
1
3
Notes to the financial statements
food and drinks,
SECTION 2
served by well-trained
41
Accounting policies
and friendly staff, at
47
Strategic report
reasonable prices.
51
Strategic report – environmental matters
5
4
Independent auditors’ report
6
3
Directors and officers
The pubs are
6
4
Directors’ report
67
Directors’ remuneration report
individually designed,
76
Corporate governance
8
2
Information for shareholders
and the company aims
8
3
Company information
to maintain them in
8
4
Glossary
excellent condition.
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
Profit/(loss)
Earnings
per
Total number
before tax and
share before
Free cash flow
of pubs
Total sales
separately disclosed
separately disclosed
Free cash flow
per share
Financial year
(sites)
£000
items
items
2,3
3
£000
pence
£000
pence
1984
1
818
(7) 0
1985
2
1,890
185 0.2
1986
2
2,197
219 0.2
1987
5
3,357
382 0.3
1988
6
3,709
248 0.3
1989
9
5,584
789 0.6
915 0.4
1990
19
7,047
603 0.4
732 0.4
1991
31
13,192
1,098 0.8
1,236 0.6
1992
45
21,380
2,020 1.9
3,563 2.1
1993
67
30,800
4,171 3.3
5,079 3.9
1994
87
46,600
6,477 3.6
5,837 3.6
1995
110
68,536
9,713 4.9
13,495 7.4
1996
146
100,480
15,200 7.8
20,968 11.2
1997
194
139,444
17,566 8.7
28,027 14.4
1998
252
188,515
20,165 9.9
28,448 14.5
1999
327
269,699
26,214 12.9
40,088 20.3
2000
428
369,628
36,052 11.8
49,296 24.2
2001
522
483,968
44,317 14.2
61,197 29.1
2002
608
601,295
53,568 16.6
71,370 33.5
2003
635
730,913
56,139 17.0
83,097 38.8
2004
643
787,126
54,074 17.7
73,477 36.7
4
2005
655
809,861
47,177 16.9
68,774 37.1
2006
657
847,516
58,388 24.1
69,712 42.1
2007
671
888,473
62,024 28.1
52,379 35.6
2008
694
907,500
58,228 27.6
71,411 50.6
2009
731
955,119
66,155 32.6
99,494 71.7
2010
775
996,327
71,015 36.0
71,344 52.9
2011
823
1,072,014
66,781 34.1
78,818 57.7
2012
860
1,197,129
72,363 39.8
91,542 70.4
2013
886
1,280,929
76,943 44.8
65,349 51.8
2014
927
1,409,333
79,362 47.0
92,850 74.1
2015
951
1,513,923
77,798 47.0
109,778 89.8
2016
926
1,595,197
80,610 48.3
90,485 76.7
2017
895
1,660,750
102,830 69.2
107,936 97.0
2018
883
1,693,818
107,249 79.2
93,357 88.4
2019
879
1,818,793
102,459 75.5
96,998 92.0
6
2020
872
1,262,048
(44,687) (35.5)
(58,852) (54.2)
3
2021
861
772,555
(154,676) (119.2)
(83,284) (67.8)
3
2022
852
1,740,477
(30,448) (19.6)
21,922 17.3
3
2023
826
1,925,044
42,559 26.4
271,095 211.4
Notes
4. Before 2005, the accounts were prepared under UKGAAP.
Adjustments to statutory numbers
All accounts from 2005 to date have been prepared under IFRS.
1. Where appropriate, the earnings/losses per share (EPS), as disclosed in the
5. Apart from the items in notes 1–4, all numbers are as reported
statutory accounts, have been recalculated to take account of share splits,
in each year’s published accounts.
the issue of new shares and capitalisation issues.
6. From financial year 2020 data is based on post-IFRS 16 numbers following
2. Free cash flow per share excludes dividends paid which were included
the transition from IAS17 to IFRS 16.
in the free cash flow calculations in the annual report and accounts for
7. Free cash flow is defined in the APM section within accounting policies on
the years 1995–2000.
page 46. The free cash flow calculation can be found on
3. EPS and free cash flow per share are calculated using dilutive shares in
the cash flow statement.
issue.
J D WETHERSPOON PLC
ANNUAL REPORT AND FINANCIAL STATEMENTS 2023
1
CHAIRMA
N’S STATEMENT
Comparison to Pre-Pandemic Period (FY19)
Trading summary
The sales recovery, following the pandemic,
Total sales for FY23 were £1,925 million, an
continued in FY23.
increase of 10.6%, compared to the 53 weeks
ended 31 July 2022.
Like-for-like sales for the financial year increased by
7.4% (FY22: -4.7%), compared to FY19. Bar sales
Like-for-like sales, compared to FY22, increased by
increased by 2.1%, food sales by 13.7%, slot/fruit
12.7%. Like-for-like bar sales increased by 9.0%,
machine sales by 43.0% and hotel sales by 15.4%.
food sales by 17.7%, slot/fruit machine sales by
26.4% and hotel rooms by 11.8%.
Like-for-like sales, compared to FY19, have
continued to improve in the first 9 weeks of the
The operating profit, before separately disclosed
current financial year (FY24) and are 17.3% ahead
items, was £107.1 million (2022: £25.7 million). The
of the equivalent 9-week period.
operating margin, before separately disclosed items,
was 5.6% (2022: 1.5%).
The comparisons in the remainder of this statement
are with the previous financial year, which ended on
The profit before tax and separately disclosed items
31 July 2022.
was £42.6 million (2022: £30.4 million loss),
including property gains of £2.2 million (2022: £2.1
Cash flow
million).
Free cash flow, including pre-tax proceeds of
In the year, the company sold 13 pubs, terminated
approximately £169 million from the sale of the
the leases of 14 pubs, and closed 4 pubs. This gave
majority of the company’s interest rate swaps, was
rise to a cash inflow of £7.0 million after associated
£271.1 million (2022: £21.9 million).
fees. There was a loss on disposal of £9.4 million,
recognised in the income statement, relating to
Excluding the proceeds from the swaps, free cash
these pubs.
flow was approximately £102 million.
Earnings per share before separately disclosed
Free cash flow was calculated after capital
items, were 27.0p (2022: losses per share of 19.6p).
payments of £47.0 million for existing pubs (2022:
£45.9 million), £12.3 million for share purchases for
Total capital investment was £78.5 million (2022:
employees (2022: £12.8 million) and payments of
£122.7 million). £20.4 million was invested in new
tax and interest.
pubs and pub extensions (2022: £51.1 million),
£47.0 million in existing pubs and IT (2022: £45.9
Balance sheet
million) and £11.2 million in freehold reversions of
Wetherspoon’s balance sheet is significantly
properties where Wetherspoon was the tenant
stronger than it was in the period before the
(2022: £25.8 million).
pandemic.
Separately disclosed items
Debt levels, excluding IFRS-16 lease debt, have
Overall, there was a pre-tax ‘separately disclosed
decreased by £163 million since January 2020, just
gain’ of £48.0 million (2022: £56.7 million).
before the first lockdown, to £641.9 million.
There was a £97.7 million gain related to the fair
This reduction has been achieved after investments
value movement of interest rate swaps; a £9.4
in freehold reversions (pubs where Wetherspoon
million charge relating to the disposal of pubs; and a
was previously the tenant) of £81.7 million and
£38.3 million property impairment charge, in respect
£108.5 million in new pubs.
of pubs which were deemed unlikely to generate
sufficient cash flows, in the future, to support their
During the pandemic, the company raised a total of
carrying value.
£229 million of new equity.
Although there have been a number of impairments
On an IFRS-16 basis, which includes notional debt
over the years in respect of individual properties, the
from leases, debt decreased from £1.45 billion to
book value of the company’s assets is £1.38 billion,
£1.06 billion between January 2020 and the end of
which is approximately eight times the company’s
FY23.
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
The total tax charge comprises two parts. The first
anomalies in pub valuations.
part is the actual current tax (the ‘cash’ tax) which
this year is nil (2022: nil) because of losses carried
For example, one pub in South London has made
forward from prior years.
an estimated return on equity, since opening over
20 years ago, after all costs including interest and
The second part is deferred tax (the ‘accounting’
tax, of £4.4 million; yet its valuation has been
tax), which is tax payable in future periods, that
impaired due to low profitability in the aftermath of
must be recognised in the current period for
the pandemic.
accounting purposes. The accounting tax charge in
the year is £8.7 million (2022: £5.6 million credit).
Dividends and return of capital
The company is seeking a refund of historic excise
The board has not recommended the payment of a
duty from HMRC, totalling £524k , in relation to
final dividend (2022: £0). There have been no share
goods sent to the Republic of Ireland, when
buybacks in the financial year to date (2022: £0).
Wetherspoon pubs first opened in that country. The
company has been charged excise duty on the
Financing
same goods twice, as they were purchased in the
As at 30 July 2023, the company’s total net debt,
UK, and excise duty was paid in full. Irish excise
excluding derivatives and lease liabilities, was
duty was then paid in addition.
£641.9 million (2022: £891.7 million), a decrease of
£249.8 million.
Business rates transmogrified to a sales tax
Business rates are supposed to be based on the
In November 2022, the company repaid government
value of the building, rather than the level of trade of
“CLBILS” loans of £100 million, which had been due
the tenant. This should mean that the rateable value
to mature in August 2023. The company has total
per square foot is approximately the same for
available finance facilities of £983 million.
comparable pubs in similar locations. However, as a
result of the valuation approach adopted by the
The company has interest rate swaps in place in
government “Assessor” in Scotland, Wetherspoon
respect of £200 million, from August 2023 to
often pays far higher rates per square foot than its
February 2025. The swap rate currently being paid,
competitors.
excluding the banks’ margin, is 5.67%. The total
cost of the company’s debt, in the year under
This is highlighted (in the tables below) by
review, including the banks’ margin was 6.25%.
assessments for the Omni Centre, a modern leisure
complex in central Edinburgh, where Wetherspoon
Property
has been assessed at more than double the rate per
The company opened three pubs during the year
square foot of the average of its competitors, and for
and sold, closed or terminated the leases of 31
The Centre in Livingston (West Lothian), a modern
pubs. The company had a trading estate of 826
shopping centre, where a similar anomaly applies.
pubs at the financial year end.
As a result of applying valuation practice from
In the last 12 years, the company has increased the
another era, which assumed that pubs charged
ratio of freehold pubs it owns from 43% to 70%, as a
approximately the same prices, the raison d’être of
result of investment in freehold reversions and
the rating system – that rates are based on property
opening freehold pubs.
values, not the tenant’s trade – has been
undermined.
As indicated above, at 30 July 2023, the net book
value of the property, plant and equipment of the
Similar issues are evident in Galashiels, Arbroath,
company was £1.38 billion.
Anniesland – and, indeed, at most Wetherspoon
pubs in Scotland. In effect, the application of the
The properties have not been revalued since 1999.
rating system in Scotland discriminates against
businesses like Wetherspoon, which have lower
Taxation
prices, and encourages businesses to charge higher
prices. As a result, consumers are likely to pay
The total tax charge is £8.7 million in respect of
higher prices, which cannot be the intent of rating
profits before separately disclosed items (2022: £5.6
legislation.
million credit).
J D WETHERSPOON PLC
ANNUAL REPORT AND FINANCIAL STATEMENTS 2023
3
CHAIRMA
N’S STATEMENT
Omni Centre, Edinburgh
VAT equality
Rates per
Rateable
Customer
As we have previously stated, the government
Occupier’s Name
square
value (RV)
area (ft²)
foot
would generate more revenue and jobs if it were to
Playfair (JDW) £218,750 2,756 £79.37
create tax equality among supermarkets, pubs and
restaurants.
Unit 9 (vacant) £48,900 1,053 £46.44
Unit 7 (vacant) £81,800 2,283 £35.83
Supermarkets pay virtually no VAT in respect of
Frankie & Benny's £119,500 2,731 £43.76
food sales, whereas pubs pay 20%. This has
Nando's £122,750 2,804 £43.78
enabled supermarkets to subsidise the price of
alcoholic drinks, widening the price gap, to the
Slug & Lettuce £108,750 3,197 £34.02
detriment of pubs and restaurants. Pubs also pay
The Filling Station £147,750 3,375 £43.78
around 20 pence a pint in business rates, whereas
Tony Macaroni £125,000 3,427 £36.48
supermarkets pay only about 2 pence, creating
further inequality.
Unit 6 (vacant) £141,750 3,956 £35.83
Cosmo £200,000 7,395 £27.05
Pubs have lost 50% of their beer sales to
Average (exc JDW) £121,800 3,358 £38.55
supermarkets in the last 35 or so years. It makes no
sense for supermarkets to be treated more leniently
The Centre, Livingston
than pubs, since pubs generate far more jobs per
Rates per
pint or meal than do supermarkets, as well as far
Rateable
Customer
Occupier’s Name
square
value (RV)
Area (ft²)
higher levels of tax. Pubs also make an important
foot
The Newyearfield
contribution to the social life of many communities
£165,750 4,090 £40.53
(JDW)
and have better visibility and control of those who
Paraffin Lamp £52,200 2,077 £25.13
consume alcoholic drinks.
Wagamana £67,600 2,096 £32.25
.
Tax equality is particularly important for residents of
Nando’s £80,700 2,196 £36.75
less affluent areas, since the tax differential is more
Chiquito £68,500 2,221 £30.84
important there – people can less afford to pay the
ASK Italian £69,600 2,254 £30.88
difference in prices between the on and off trade.
PizzaExpress £68,100 2,325 £29.29
As a result, in these less affluent areas, there are
Prezzo £70,600 2,413 £29.26
often fewer pubs, coffee shops and restaurants, with
Harvester £98,600 3,171 £31.09
less employment and increased high-street
Pizza Hut £111,000 3,796 £29.24
dereliction. Tax equality would also be in line with
the principle of fairness – the same taxes should
Hot Flame £136,500 4,661 £29.29
apply to businesses which sell the same products.
Average (exc JDW) £82,340 2,721 £30.40
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
The table below shows the £6.0 billion of tax
revenue generated by the company, its staff and
Wetherspoon and other pub and restaurant
customers in the last 10 years. Each pub, on
companies have always generated far more in taxes
average, generated £6.8 million in tax during that
than are earned in profits.
period. The tax generated by the company, during
this 10-year period, equates to approximately 25
In the financial year ended 30 July 2023, the
times the company’s profits after tax.
company generated taxes of £760.2 million.
TOTAL
2023 2022 2021 2020 2019 2018 2017 2016 2015 2014
2014 to
2023
£m
£m
£m
£m
£m
£m
£m
£m
£m
£m
£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
- - - - - - - - -2 -
-2.0
capital
allowances)
Fruit/slot
15.7 12.8 4.3 9 11.6 10.5 10.5 11 11.2 11.3
107.9
machine duty
Climate change
11.1 9.7 7.9 10 9.6 9.2 9.7 8.7 6.4 6.3
88.6
levies
Stamp duty
0.9 2.7 1.8 4.9 3.7 1.2 5.1 2.6 1.8 2.1
26.8
Sugar tax
3.1 2.7 1.3 2 2.9 0.8 - - - -
12.8
Fuel duty
1.9 1.9 1.1 1.7 2.2 2.1 2.1 2.1 2.9 2.1
20.1
Apprenticeship
2.5 2.2 1.9 1.2 1.3 1.7 0.6 - - -
11.4
levy
Carbon tax
- - - - 1.9 3 3.4 3.6 3.7 2.7
18.3
Premise licence
0.5 0.5 0.5 1.1 0.8 0.7 0.8 0.8 1.6 0.7
8.0
and TV licences
Landfill tax
- - - - - 1.7 2.5 2.2 2.2 1.5
10.1
Furlough tax
- -4.4 -213 -124.1 - - - - - -
-341.5
Eat Out to Help
- -23.2 - - - - - - -
-23.2
Out
Local
government
- -1.4 -11.1 - - - - - - -
-12.5
grants
TOTAL TAX
760.2 666.7 38.9 441.9 764.9 730.5 695.2 672.3 632.4 600.5 6,003.5
TAX PER PUB
0.92 0.78 0.05 0.51 0.87 0.83 0.78 0.71 0.67 0.66 6.78
(£m)
TAX AS % OF
39.5% 38.3% 5.0% 35.0% 42.1% 43.1% 41.9% 42.1% 41.8% 42.6% 39.0.%
NET SALES
PROFIT/(LOSS)
33.8 -24.9 -146.5 -38.5 79.6 83.6 76.9 56.9 57.5 58.9 237.3
AFTER TAX
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
CHAIRMA
N’S STATEMENT
Corporate governance
A further issue is that many major investors, in their
own companies, for sensible reasons, do not
Wetherspoon has been a strong critic of the
observe the nine-year rule, and other rules,
composition of the boards of UK-quoted companies.
themselves. An approach of “do what I say, not
what I do” is clearly unsustainable.
As a result of the ‘nine-year rule’, limiting the tenure
of NEDs and the presumption in favour of
Further progress
‘independent’, part-time chairmen, boards are often
composed of short-term directors, with very little
As always, the company has tried to improve as
representation from those who understand the
many areas of the business as possible, on a week-
company best - people who work for it full time, or
to-week basis, rather than aiming for ‘big ideas’ or
have worked for it full time.
grand strategies.
Wetherspoon’s review of the boards of major banks
Frequent calls on pubs by senior executives, the
and pub companies, which teetered on the edge of
encouragement of criticism from pub staff and
failure in the 2008-10 recession, highlighted the
customers and the involvement of pub and area
short “tenure”, on average, of directors.
managers, among others, in weekly decisions, are
the keys to success. Wetherspoon paid £36.0
In contrast, Wetherspoon noted the relative
million in respect of bonuses and free shares to
success, during this fraught financial period, of pub
employees in the period ended 31 July 2023, of
companies Fuller’s and Young’s, the boards of
which 98.6% was paid to staff below board level and
which were dominated by experienced executives,
83.4% was paid to staff working in our pubs.
or former executives.
Wetherspoon has been the biggest corporate
As a result, Wetherspoon has increased the level of
sponsor of ‘Young Lives vs Cancer’ (previously
experience on the Wetherspoon board by
CLIC Sargent), having raised a total of £22.2 million
appointing four “worker directors”.
since 2002. During the pandemic, our contributions
had been reduced, but, since the reopening of our
All four worker directors started on the ‘shop floor’
pubs’ there have been great efforts seen and our
and eventually became successful pub managers.
contributions have bounced back significantly.
Three have been promoted to regional management
roles. They have worked for the company for an
Bonuses and free shares
average of 24 years.
As indicated above, Wetherspoon has, for many
years (see table below), operated a bonus and
Board composition cannot guarantee future
share scheme for all employees. Before the
success, but it makes sensible decisions, based on
pandemic, these awards increased, as earnings
experience at the coalface of the business, more
increased for shareholders.
likely.
Bonus and free
Bonus and
Profit/(loss)
Financial
free shares
after tax
1
shares as % of
year
profits
The UK Corporate Governance Code 2018 (the
£m £m
‘Code’) is a vast improvement on previous codes,
2007 19 47 41%
emphasising the importance of employees,
2008 16 36 45%
customers and other stakeholders in commercial
2009 21 45 45%
success. It also emphasises the importance of its
2010 23 51 44%
comply-or-explain ethos, and the consequent need
2011 23 52 43%
for shareholders to engage with companies in order
2012 24 57 42%
to understand their explanations.
2013 29 65 44%
2014 29 59 50%
A major impediment to the effective implementation
2015 31 57 53%
of comply or explain seems to be the undermanning
2016 33 57 58%
of the corporate governance departments of major
2017 44 77 57%
shareholders.
2018 43 84 51%
For example, Wetherspoon has met a compliance
2019 46 80 58%
officer from one major institution who is responsible
2020 33 (39) -
for around 400 companies - an impossible task.
2021 23 (146) -
As a result, it appears that compliance officers and
2022 30 (25) -
2023 36 34 106%
governance advisors, in practice, often rely on a
Total 503 591 53%
2
“tick-box” approach, which is, itself, in breach of the
1
IFRS 16 was implemented in the year ending 26 July 2020 (FY20). From this
Code.
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
leisure agent Davis Coffer Lyons, relating to claims
that Mr Lyons had been an accessory to frauds
The attraction and retention of talented pub and
committed by Wetherspoon’s former retained agent
kitchen managers are important for any hospitality
Van de Berg and its directors Christian Braun,
business. As the table below demonstrates, the
George Aldridge and Richard Harvey in respect of
retention of managers has improved, even during
properties in Leytonstone (which currently trades as
the pandemic.
the Walnut Tree), Newbury (which was leased to
Average pub
Average kitchen
Financial
manager length
manager length of
Café Rouge) and Portsmouth (which currently
year
of service
service
trades as The Isambard Kingdom Brunel).
(Years) (Years)
2013 9.1 6.0
Of these three properties, only Portsmouth was
2014 10.0 6.1
pleaded by Wetherspoon in its case 2008/9 case
2015 10.1 6.1
against Van de Berg. Mr Lyons denied the claim
2016 11.0 7.1
and the litigation was contested.
2017 11.1 8.0
2018 12.0 8.1
In the Van de Berg litigation, Mr Justice Peter Smith
2019 12.2 8.1
ruled that Van de Berg, but not Mr Lyons (who was
2020 12.9 9.1
not a party to the case), fraudulently diverted the
freehold of Portsmouth from Wetherspoon to
2021 13.6 9.6
Moorstown Properties Limited, a company owned
2022 13.9 10.4
by Simon Conway, which leased the property to
2023 14.3 10.6
Wetherspoon.
Food hygiene ratings
As part of a series of cases, Wetherspoon also
agreed out-of-court settlements with:
Wetherspoon has always emphasised the
importance of hygiene standards.
1) Paul Ferrari of London estate agent Ferrari Dewe
& Co, in respect of properties referred to as the
We now have 753 pubs rated on the Food
‘Ferrari Five’ by Mr Justice Peter Smith in the Van
Standards Agency’s website (see table below). The
de Berg case, and
average score is 4.99, with 99.2% of the pubs
achieving a top rating of five stars. We believe this
2) Property investor Jason Harris, formerly of First
to be the highest average rating for any substantial
London and now of First Urban Group who paid
pub company.
£400,000 to to Wetherspoon to settle a claim in
which it was alleged that Harris was an accessory to
In the separate Scottish scheme, which records
frauds committed by Van de Berg. Harris contested
either a ‘pass’ or a ‘fail’, all of our 60 pubs have
the claim and did not admit liability.
passed.
Pubs with
Financial
Total pubs
Average
highest
Messrs Ferrari and Harris both contested the claims
Year
scored
rating
rating %
and did not admit liability.
2013 771 4.85 87.0
2014 824 4.91 92.0
Press corrections
2015 858 4.93 94.1
The press and media, over the decades, have
2016 836 4.89 91.7
generally been fair and accurate in reporting on
2017 818 4.89 91.8
Wetherspoon. However, in the febrile atmosphere of
2018 807 4.97 97.3
the first lockdown, something went awry and a
2019 799 4.97 97.4
number of harmful inaccuracies were published.
2020 781 4.96 97.0
2021 787 4.97 98.4
In order to try to set the record straight, a special
2022 775 4.98 98.6
edition of Wetherspoon News was published, which
2023 753 4.99 99.2
includes details of the resulting apologies and
corrections. It can be found on the company’s
website
Property litigation
https://www.jdwetherspoon.com/~/media/files/pdf-
In 2013, Wetherspoon agreed an out-of-court
documents/wetherspoon-news/does-truth-
settlement of approximately £1.25 million with
matter_.pdf.
developer Anthony Lyons, formerly of property
J D WETHERSPOON PLC
ANNUAL REPORT AND FINANCIAL STATEMENTS 2023
7
CHAIRMA
N’S STATEMENT
Board changes
As we said last year, perhaps the biggest threat to
the hospitality industry is the possibility of further
Su Cacioppo retired from the Wetherspoon board
lockdowns and restrictions.
on the 7th October 2022, after 31 years with the
company. Su started as a pub manager in 1991,
Those interested in the UK Government’s response
then became an area manager, before eventually
to the pandemic may like to read the reports by
becoming the board director responsible for the
Professor Francois Balloux, director of the UCL
personnel, legal and marketing departments in
Genetics Institute, in The Guardian, and by
2008.
Professor Robert Dingwall, of Trent University, in
the Telegraph
Sir Richard Beckett KC also retired from the board
at last year’s AGM, after 13 years as a non-
(see pages 54-56 of Wetherspoon News
executive director of the company, latterly as head
https://www.jdwetherspoon.com/~/media/files/pdf-
of the nominations committee.
documents/wetherspoon-news/wetherspoon-news-
autumn-2022.pdf)
I would like to thank sincerely Su and Richard for
their dedicated, creative and conscientious work
The conclusion of Professor Balloux, broadly
over many years.
echoed by Professor Dingwall, based on an analysis
by the World Health Organisation of the pandemic,
Pubwatch
is that Sweden (which did not lock down), had a
Pubwatch is a forum which has improved wider town
Covid-19 fatality rate “of about half the UK’s” and
and city environments, by bringing together pubs,
that “the worst performer, by some margin, is Peru,
local authorities and the police, in a concerted way,
despite enforcing the harshest, longest lockdown.”
to encourage good behaviour and to reduce
antisocial activity.
Professor Balloux concludes that “the strength of
mitigation measures does not seem to be a
Wetherspoon pubs are members of 538 schemes
particularly strong indicator of excess deaths.”
country wide.
Indeed, as some commentators have noted,
The company also helps to fund National Pubwatch,
lockdowns were not contemplated in the UK’s
founded in 1997 by just two licensees and a police
laboriously compiled prepandemic plans. It appears
office. This is the umbrella organisation which helps
that these plans were jettisoned, early on in the
to set up, co-ordinate and support local schemes.
pandemic, in favour of copying China’s lockdown
approach - an example, perhaps, of Warren
It is our experience that in some towns and cities,
Buffett’s so-called “institutional imperative” -
where the authorities have struggled to control
“everyone else has locked down, so we will, too”.
antisocial behaviour, the setting up of a Pubwatch
has been instrumental in improving safety and
The company currently anticipates a reasonable
security - of not only licensed premises, but also the
outcome for the financial year, subject to our future
town and city in general, as well as assisting the
sales performance.
police in bringing down crime.
Conversely, we have found, in several towns,
including some towns on the outskirts of London,
Tim Martin
that the absence of an effective Pubwatch scheme
Chairman
results in higher incidents of crime, disorder and
6 October 2023
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
52 weeks
52 weeks
53 weeks 53 weeks 53 weeks
ended
ended
ended
ended ended ended
30 July
30 July
30 July
31 July 31 July 31 July
2023
2023
2023
2022 2022 2022
Before
separately
After
Before separately After
separately
disclosed
separately
separately disclosed separately
disclosed
items
disclosed
disclosed items disclosed
items
items
items
items
£000 £000 £000
£000 £000 £000
Revenue
1
1,925,044
-
1,740,477 - 1,740,477
Other operating (costs)/income
-
(1,022)
(1,022 )
- 29,384 29,384
Operating costs
(1,817,982)
-
(1,817,982 )
(1,714,757) - (1,714,757 )
Operating profit/(loss)
107,062 (1,022) 106,040
25,720 29,384 55,104
Property gains/(losses) 3
2,231
(47,712)
(45,481 )
2,142 (24,526) (22,384 )
Finance income 6
1,351
97,724
531 52,859 53,390
Finance costs 6
(68,085)
(1,038)
(69,123 )
(58,841) (1,000) (59,841 )
Profit/(loss) before tax
42,559 47,952 90,511
(30,448) 56,717 26,269
Income tax (charge)/credit 7
(8,734)
(22,190)
(30,924 )
5,560 (12,562) (7,002 )
Profit/(loss) for the period
33,825 25,762 59,587
(24,888) 44,155 19,267
Profit/(loss) per ordinary share (p)
- Basic 8
27.0
20.5
(19.6) 34.8 15.2
1
- Diluted
8
26.4
20.1
(19.6) 34.6 15.0
1
Restated, see note 8.
STATEMEMENT OF COMPREHENSIVE INCOME
for the 52 weeks ended 30 July 2023
52 weeks
53 weeks
ended
ended
30 July
31 July
Notes
2023
2022
£000
£000
Items which will be reclassified subsequently to profit or loss:
Interest-rate swaps: gain taken to other comprehensive income 22
Interest-rate swaps: loss reclassification to the income statement 22
(13,310 )
(4,332 )
Tax on items taken directly to other comprehensive income 7
(6,055 )
(11,051 )
Currency translation differences
(1,474 )
Net gain recognised directly in other comprehensive income
Profit for the period
Total comprehensive profit for the period
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
free cash
Notes
free cash
flow
1
flow
52 weeks
52 weeks
53 weeks 53 weeks
ended
ended
ended ended
30 July
30 July
31 July 31 July
2023
2023
2022 2022
£000 £000
£000 £000
Cash flows from operating activities
Cash generated from operations 9
270,686
Interest received 6
1,011
Interest paid 6
(50,545 )
(50,545)
(41,044 ) (41,044)
Cash proceeds on termination of interest-rate swaps
169,413
Corporation tax paid
(12,200 )
(12,200)
(715 ) (715)
Lease interest 23
(15,954 )
(15,954)
(17,501 ) (17,501)
Net cash flow from operating activities 362,411 362,411
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
(20,361 )
–
(51,083 ) –
Freehold reversions and investment properties
(11,202 )
–
(25,773 ) –
Proceeds of sale of property, plant and equipment
–
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
–
(192 ) (192)
Advances/(repayments) under bank loans
(200,033 )
–
Other loan receivables
–
(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
(5,061 )
Opening cash and cash equivalents 18
Closing cash and cash equivalents 18
1
Free cash flow
271,095
21,922
1
Free cash flow is a measure not required by accounting standards; a definition is provided in the accounting policies
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
30 July
31 July
2023
2022
£000
£000
Assets
Non-current assets
Property, plant and equipment 13
Intangible assets 12
Investment property 14
Right-of-use assets 23
Other loan receivable 16
Derivative financial instruments 22
Lease assets 23
Total non-current assets 1 ,812,794
Current assets
Lease assets 23
Assets held for sale 17
Inventories 15
Receivables 16
Current income tax receivables
Cash and cash equivalents 18
Total current assets
Total assets 1 ,971,904
Current liabilities
Borrowings 20
(4,200 )
(5,137 )
Derivative financial instruments 22
(78 )
Trade and other payables 19
(329,098 )
(282,481 )
Provisions 21
(2,395 )
(2,661 )
Lease liabilities 23
(51,486 )
(48,471 )
Total current liabilities (387,257 )
(338,750 )
Non-current liabilities
Borrowings 20
(727,643 )
(930,404 )
Derivative financial instruments 22
(2,031 )
Deferred tax liabilities 7
(65,752 )
(34,718 )
Lease liabilities 23
(391,794 )
(421,583 )
Total non-current liabilities (1,185,189 )
(1,388,736 )
Total liabilities (1,572,446 )
(1,727,486 )
Net assets 399,458
Shareholders’ equity
Share capital 27
Share premium account
Capital redemption reserve
Other reserves
Hedging reserve 22
Currency translation reserve
(144 )
Retained earnings
(17,132 )
(74,373 )
Total shareholders’ equity 399,458
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 Ben Whitley
Director Director
J D WETHERSPOON PLC
ANNUAL REPORT AND FINANCIAL STATEMENTS 2023
11
STATEMENT OF CHANGES IN EQUITY
Share
Notes Share
Capital Other
Currency
Total
premium
capital account redemption reserves Hedging translation Retained
reserve
reserve reserve earnings
£000 £000 £000 £000 £000 £000 £000
£000
As at 25 July 2021
Total comprehensive income
Loss for the period - - - - - - 19,267 19,267
Interest-rate swaps: cash flow
22 - - - - 48,452 - - 48,452
hedges
Interest-rate swaps: amount
22 - - - - (4,332 ) - - (4,332 )
reclassified to the income statement
Tax on items taken directly to
7 - - - - (11,051 ) - - (11,051 )
comprehensive income
Currency translation differences - - - - - (1,995 ) 521 (1,474 )
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 - - - - - 59,587 59,587
Interest-rate swaps: cash flow
22 - - - - 37,529 - - 37,529
hedges
Interest-rate swaps: amount
22 - - - - (13,310 ) - - (13,310 )
reclassified to the income statement
Tax on items taken directly to
7 - - - - (6,055 ) - - (6,055 )
comprehensive income
Currency translation differences - - - - - 2,292 (659 ) 1,633
Share capital expenses
Share-based payment charges
Tax on share-based payment
Purchase of own shares for share-
based payments
At 30 July 2023 2,575 143,170 2,337 234,579 31,781 2,148 (17,132 ) 399,458
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
J D WETHERSPOON PLC
ANNUAL REPORT AND FINANCIAL STATEMENTS 2023
13
NOTES TO THE FINANCIAL STATEMENTS
14
ANNUAL REPORT AND FINANCIAL STATEMENTS 2023
J D WETHERSPOON PLC
NOTES TO THE FINANCIAL STATEMEN
TS
J D WETHERSPOON PLC
ANNUAL REPORT AND FINANCIAL STATEMENTS 2023
15
NOTES TO THE FINANCIAL STATEMENTS
16
ANNUAL REPORT AND FINANCIAL STATEMENTS 2023
J D WETHERSPOON PLC
NOTES TO THE FINANCIAL STATEMEN
TS
J D WETHERSPOON PLC
ANNUAL REPORT AND FINANCIAL STATEMENTS 2023
17
NOTES TO THE FINANCIAL STATEMENTS
18
ANNUAL REPORT AND FINANCIAL STATEMENTS 2023
J D WETHERSPOON PLC
NOTES TO THE FINANCIAL STATEMEN
TS
J D WETHERSPOON PLC
ANNUAL REPORT AND FINANCIAL STATEMENTS 2023
19
NOTES TO THE FINANCIAL STATEMENTS
20
ANNUAL REPORT AND FINANCIAL STATEMENTS 2023
J D WETHERSPOON PLC
NOTES TO THE FINANCIAL STATEMEN
TS
J D WETHERSPOON PLC
ANNUAL REPORT AND FINANCIAL STATEMENTS 2023
21
NOTES TO THE FINANCIAL STATEMENTS
22
ANNUAL REPORT AND FINANCIAL STATEMENTS 2023
J D WETHERSPOON PLC
NOTES TO THE FINANCIAL STATEMEN
TS
J D WETHERSPOON PLC
ANNUAL REPORT AND FINANCIAL STATEMENTS 2023
23
NOTES TO THE FINANCIAL STATEMENTS
24
ANNUAL REPORT AND FINANCIAL STATEMENTS 2023
J D WETHERSPOON PLC
NOTES TO THE FINANCIAL STATEMEN
TS
J D WETHERSPOON PLC
ANNUAL REPORT AND FINANCIAL STATEMENTS 2023
25
NOTES TO THE FINANCIAL STATEMENTS
26
ANNUAL REPORT AND FINANCIAL STATEMENTS 2023
J D WETHERSPOON PLC
NOTES TO THE FINANCIAL STATEMEN
TS
J D WETHERSPOON PLC
ANNUAL REPORT AND FINANCIAL STATEMENTS 2023
27
NOTES TO THE FINANCIAL STATEMENTS
28
ANNUAL REPORT AND FINANCIAL STATEMENTS 2023
J D WETHERSPOON PLC
NOTES TO THE FINANCIAL STATEMEN
TS
J D WETHERSPOON PLC
ANNUAL REPORT AND FINANCIAL STATEMENTS 2023
29
NOTES TO THE FINANCIAL STATEMENTS
30
ANNUAL REPORT AND FINANCIAL STATEMENTS 2023
J D WETHERSPOON PLC
NOTES TO THE FINANCIAL STATEMEN
TS
J D WETHERSPOON PLC
ANNUAL REPORT AND FINANCIAL STATEMENTS 2023
31
NOTES TO THE FINANCIAL STATEMENTS
32
ANNUAL REPORT AND FINANCIAL STATEMENTS 2023
J D WETHERSPOON PLC
NOTES TO THE FINANCIAL STATEMEN
TS
J D WETHERSPOON PLC
ANNUAL REPORT AND FINANCIAL STATEMENTS 2023
33
NOTES TO THE FINANCIAL STATEMENTS
34
ANNUAL REPORT AND FINANCIAL STATEMENTS 2023
J D WETHERSPOON PLC
NOTES TO THE FINANCIAL STATEMEN
TS
J D WETHERSPOON PLC
ANNUAL REPORT AND FINANCIAL STATEMENTS 2023
35
NOTES TO THE FINANCIAL STATEMENTS
36
ANNUAL REPORT AND FINANCIAL STATEMENTS 2023
J D WETHERSPOON PLC
NOTES TO THE FINANCIAL STATEMEN
TS
J D WETHERSPOON PLC
ANNUAL REPORT AND FINANCIAL STATEMENTS 2023
37
NOTES TO THE FINANCIAL STATEMENTS
38
ANNUAL REPORT AND FINANCIAL STATEMENTS 2023
J D WETHERSPOON PLC
NOTES TO THE FINANCIAL STATEMEN
TS
J D WETHERSPOON PLC
ANNUAL REPORT AND FINANCIAL STATEMENTS 2023
39
NOTES TO THE FINANCIAL STATEMENTS
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.
J D WETHERSPOON PLC
ANNUAL REPORT AND FINANCIAL STATEMENTS 2023
41
ACCOUNTING POLICIES
Accounting policies
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.
42
ANNUAL REPORT AND FINANCIAL STATEMENTS 2023
J D WETHERSPOON PLC
fdfdfds
ACCOUNTING POLICIES
J D WETHERSPOON PLC
ANNUAL REPORT AND FINANCIAL STATEMENTS 2023
43
ACCOUNTING POLICIES
44
ANNUAL REPORT AND FINANCIAL STATEMENTS 2023
J D WETHERSPOON PLC
fdfdfds
ACCOUNTING POLICIES
J D WETHERSPOON PLC
ANNUAL REPORT AND FINANCIAL STATEMENTS 2023
45
ACCOUNTING POLICIES
46
ANNUAL REPORT AND FINANCIAL STATEMENTS 2023
J D WETHERSPOON PLC
fdfdfds
STRATEGIC REPORT
Strategy
Area managers invited to meet the board of directors
The Company’s strategy is to seek a return on capital in
(before each board meeting)
excess of the cost of the capital which will provide funds
Regular liaison meetings held with employees, at all
for developments, dividends and reinvestment.
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
Business review and future trends
directors
A review of the Company’s business and the
key measures of its performance, sometimes called key
Weekly e-mail from the chief executive to all employees
performance indicators (KPIs), can be found in the
chairman’s statement under the financial performance
Head-office staff completing regular pub and kitchen
section. The chairman’s statement also discusses those
shifts (both front of house and in the kitchen) to help in
trends and factors likely to affect the future development,
understanding any staff/customer issues
and performance of the Company.
Employee diversity
The table below shows the breakdown of directors, senior
Social matters
managers and employees at the end of the period.
Wetherspoon provides jobs for over 42,000 people, paying
a reasonable percentage of its profits as bonus for those
Male
Female
working in our pubs and head office, training large
Directors 7
2
numbers of staff and paying a significant percentage of our
Senior managers 539
361
sales as taxes to the government.
All employees
20,725
22,522
Further information about these policies are published on:
Section 172 statement
jdwetherspoon.com
Section 172 of the Companies Act 2006 requires that
directors of a Company act in good faith to promote the
Human rights
success of the Company for all stakeholders.
The Company is committed to respecting human rights
across our business by complying with all relevant laws
In the period, all directors of the Company have acted in a
and regulations. The Company prohibits any form of
manner most likely to achieve the long-term success of the
discrimination, forced, trafficked or child labour and is
business for its shareholders, employees, customers,
committed to safe and healthy working conditions for all
suppliers and the wider community in which the Company
individuals, whether employed by the Company directly or
operates.
by a supplier.
In the period, the directors have made decisions in a
Legal and ethical conduct
number of areas, often after comprehensive consultation
The Company has comprehensive measures to meet its
with pub teams and the wider management teams.
statutory requirements across all areas of its operation and
Examples include the various pricing and promotion
also those expected by our customers and employees, as
decisions that have been taken, the timing around hedging
necessary, for the long-term success of the business.
utility costs, the investment decisions relating to new and
Risks in this area can occur
existing pubs, and the extent to which pay rates were
from corruption, bribery and human rights abuses,
increased throughout the year. Further risks have been
including discrimination, harassment and bullying.
outlined within the risk section on pages 49-50.
The Company has training programmes for all employees.
Examples of the Company’s engagement with
It also has a documented whistleblowing programme,
stakeholders are:
written processes and procedures and a supply chain audit
programme.
Wherever practical, directors consult widely among the
Company’s employees, about decisions made about the
Employees
Company. The directors believe that wide consultation and
All employees are encouraged to participate in the
a management team with extensive industry experience
business, some examples of how this is achieved being:
are likely to result in the best long-term decisions. The
Several Company initiatives to encourage
Company’s senior management team regularly engages
with pub-based employees through meetings and pub
employees to suggest small and continuous improvements
visits.
to the running of their pubs
Most of the Company’s employees are customers and
‘Tell Tim’ suggestion scheme for all employees allowing
many are shareholders. The Company encourages its
them to be involved in the decision-making process for key
employees to feed back their views, as well as those of
business issues.
their friends and family. The Company operates a
Pub managers, area managers and other pub
suggestion scheme through the “Tell Tim” scheme
employees attending and contributing to weekly operations
whereby any employee can send in ideas and/or make a
meetings, hosted by the chairman or chief executive
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
fdfdfds
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
.
Risk’s description
The company is aware that, in operating in a
Being unable to supply our pubs with products,
consumer-facing business, its business reputation,
when required, at a competitive price.
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
Changes during the year
The industry remains highly competitive.
Inflationary pressures across the sector.
Changing consumer habits, owing to cost-of-living
Availability of products owing to disruptions in global
crisis.
supply chains.
Residual risk and impact on the business
Residual risk and impact on the business
Failure to execute the right strategy could damage reputation
Reduced profits resulting from higher product prices.
and affect profits.
The company’s reputation could be damaged if menu items
were unavailable. Negative consumer reaction to increasing
prices.
Risk
’s
mitigation
Risk’s mitigation
Challenging incorrect publications about the company.
The company works closely with supply chain members
Staying relevant through innovation of offerings in pubs.
to maintain product availability.
Monitor main competitors’ offerings and pricing.
Dual supply of key menu items.
Regular management review of strategic positioning
The company conducts audits of its supply chain.
and performance.
Long-term contracts with suppliers provide certainty of
supply and low pricing.
Health and safety
Legal and regulatory
Risk’s description
Risk’s description
The safety of our customers, employees and
Failure to comply with legislative requirements
contractors is at risk if correct processes are not
and taxation policies.
followed in relation to food-handling, equipment
usage, maintaining a safe working environment
and the use of hazardous substances.
Changes during the year
Changes during the year
There have been no material changes during the year.
Alcohol duty reform.
Minimum wage rate changes.
Residual risk and impact on the business
Residual risk and impact on the business
Ineffective health and safety practices could result in harm to
Non-compliance could result in financial penalties, criminal
individuals, prosecution, closure of pubs and reputational
prosecution and reputational damage.
damage.
Risk’s mitigation
Risk
’s mitigation
Focus on food hygiene ratings.
In-house legal team have regular meetings with the
Internal audits are performed.
management team.
All employees are provided with training in health and
Continued professional development through training,
safety matters.
completion of qualifications and communication with
Pubs are provided with the necessary resources and
third-party specialists.
support to ensure that safe working practices are
maintained.
Buildings are maintained to ensure a safe operating
environment.
J D WETHERSPOON PLC
ANNUAL REPORT AND FINANCIAL STATEMENTS 2023
49
STRATEGIC REPORT
Technology, cyber security, data
security
People
Risk’s description
Risk’s description
Loss of key information or business disruption
Not attracting the right people with
through system failures, cyber-attacks and data
sufficient experience to ensure the company’s
breaches.
future success.
Changes during the year
Changes during the year
There have been no material 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
Residual risk and impact on the business
Any prolonged or significant failure of these systems could
Failure to retain or attract the right people would lead a
pose a risk to trading, eg reduced profits, reputational
diminished customer experience, higher recruitment costs
damage and loss of personal information.
and lower productivity levels.
Risk’s mitigation
Risk’s mitigation
Ensuring appropriate technologies, policies and
The company offers a comprehensive remuneration
procedures, including disaster-recovery plans, system
package (eg staff discounts, bonuses and free shares),
backups and external hardware and software.
as well as genuine opportunities to progress within
The company continually assesses the risks posed by
the business.
cyber threats and makes changes to its technologies,
The company’s policy is to recruit from within,
policies and procedures to mitigate identified risks.
where possible.
Business continuity, crisis management and disaster
Liquidity and financing
recovery
Risk’s description
Risk’s description
Unexpected events such as fires, floods and
Inability to maintain cash flows to meet the needs
pandemics will affect the company’s ability to
and/or the debt covenants of the business.
operate.
Changes during the year
Changes during the year
There have been no material 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
Residual risk and impact on the business
These risks are outside of the company’s control, therefore
Insufficient funding or breaches of financing arrangements
without sufficient disaster-recovery plans, the impact could
could affect the company’s ability to trade.
be material.
Risk’s mitigation
Risk’s mitigation
Mitigating actions taken by the company will depend on
Sales, profitability, debt requirements and cash flow are
the nature of the event, how much forewarning the
reviewed weekly by the management team.
company has of an event and the reaction of the wider
Hedges in place relating to interest rates and energy
economic community.
supply.
Comprehensive disaster-recovery plans are in place
Maintenance of sufficient levels of cash headroom to
which seek to minimise such incidents’ impact.
sustain periods of economic uncertainty.
Effective and efficient communication platforms to send
messages to the workforce population.
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
fdfdfds
STRATEGIC REPORT – ENVIRONMENTAL MATTERS
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
2). Risk m
anagement
a. Describe the board’s oversight of climate-
a. Describe the organisation’s processes for identifying and
related risks and opportunities.
assessing climate-related risks.
b. Describe management’s role in assessing and
b. Describe the organisation’s processes for managing climate-
managing climate-
related risks and opportunities.
related risks.
c. Describe how processes for identifying, assessing, and managing
climate-related risks are integrated into the organisation’s overall risk
3). Strategy
management.
a. Describe the climate-related risks and
opportunities the organisation has identified over
the short, medium, and long term.
4). Metrics and
t
argets
b. Describe the impact of climate-related risks and
a. Disclose the metrics used by the organisation to assess climate-
opportunities on the organisation’s businesses,
related risks and opportunities in line with its strategy and risk
strategy, and financial planning.
management process.
c. Describe the resilience of the organisation’s
b. Disclose Scope 1, Scope 2 and, if appropriate, Scope 3
strategy, taking into consideration different
greenhouse gas (GHG) emissions and the related risks.
climate-related scenarios, including a 2°C or lower
c. Describe the targets used by the organisation to manage climate-
scenario.
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
/
Impact
Mitigations
Risk type
Chronic
Time
Financial
opportunity
or acute
horizon
impact
Lack of product
A lack of product availability would
Use of multiple
physical/
chronic medium high
availability
increase costs and lower profitability.
suppliers for key
transitional
from the
Any increased costs passed on to the
products to
supply chain.
customer or a reduced availability of
mitigate availability
products to purchase could affect sales.
risks.
Increased
Pub closures would affect the profitability
Use of flood
physical acute medium medium
likelihood of
of the company, through lower sales,
defenses, where
flooding from
potential rising insurance premiums and
necessary.
more rain and
the relocation of staff.
rising sea levels.
Negative
Reputational damage could result in
Publications such
transitional n/a short high
stakeholder
fewer customers visiting the pubs and
as Wetherspoon
perception if the
hence lower sales. The company may
News and
company is
struggle to attract investors, affecting its
Does Truth Matter
seen not to be
ability to access finance.
help to correct
doing enough to
misinformation.
tackle climate
change.
UK heat waves
If temperatures were to rise by 2°C or
n/a n/a n/a long opportunity
may result in
more, produce such as tomatoes,
produce typically
oranges and grapes for wine could be
grown in warmer
grown in the UK. This could lower the
climates being
company’s carbon footprint, while
grown closer to
reducing produce costs through lower
home.
transportation and import fees.
Key
1
2
Risk type
Chronic or acute
Time horizon
Financial Impact
Physical
Risks due to longer-term
Chronic physical risks refer to longer-
Long 25 years +
High >£25m
shifts in climate
term shifts in climate patterns
Medium 10-25 years
Medium £5-25m
patterns, such as
(eg sustained higher temperatures)
Short 0-10 years
weather disruption.
which may cause sea levels to rise or
Low <£5m
Transitional Risks in transitioning to a
chronic heat waves.
2
Annual impact
lower-carbon economy,
Acute physical risks refer to those
eg new policies
which are event driven, including
or regulations.
increased severity of extreme weather
1
Risk categories defined by the TCFD
events, eg cyclones/hurricanes/floods.
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
Fuel
Scope 1 Scope 2
Intensity Scope 1 Scope 2 Fuel (car) Total
emissions
(car)
Tonnes
Tonnes
Tonnes
Tonnes CO2e /
Unit
kWh kWh kWh kWh
CO2e
CO2e
CO2e
£m revenue
2023 35,839 79,044 948 60.2 196,311,302 249,058,142 4,056,075 449,425,519
2022 41,324 65,971 454 61.9 226,818,295 205,342,472 1,917,037 434,077,804
2021 24,726 57,079 33 105.9 134,994,694 178,260,013 139,138 313,393,845
2020 45,012 68,297 745 90.4 244,801,679 292,946,271 3,138,550 540,886,500
2019 47,358 94,016 1,034 78.3 257,589,099 308,430,989 4,277,561 570,297,649
2018 50,725 115,315
98
2017 50,805 138,864
114.2
2016 51,342 157,190
130.7
2015 52,510 170,048
147
2014 49,251 163,930
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
We are responsible for concluding on the appropriateness
Our opinion on the financial statements is unmodified
of the directors’ use of the going concern basis of
We have audited the financial statements of J D
accounting and, based on the audit evidence obtained,
Wetherspoon plc (the ‘company’) for the 52 weeks ended
whether a material uncertainty exists related to events or
30 July 2023, which comprise the Income statement, the
conditions that may cast significant doubt on company’s
Statement of comprehensive income, the Cash flow
ability to continue as a going concern. If we conclude that
statement, the Balance sheet, the Statement of changes in
a material uncertainty exists, we are required to draw
equity and notes to the financial statements, including a
attention in our report to the related disclosures in the
summary of significant accounting policies. The financial
financial statements or, if such disclosures are inadequate,
reporting framework that has been applied in their
to modify the auditor’s opinion. Our conclusions are based
preparation is applicable law and UK-adopted international
on the audit evidence obtained up to the date of our report.
accounting standards.
However, future events or conditions may cause the
In our opinion, the financial statements:
company to cease or continue as a going concern.
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
In auditing the financial statements, we have concluded
then ended;
that the directors’ use of the going concern basis of
have been properly prepared in accordance with UK-
accounting in the preparation of the financial statements is
adopted international accounting standards; and
appropriate.
have been prepared in accordance with the requirements
Based on the work we have performed, we have not
of the Companies Act 2006.
identified any material uncertainties relating to events or
conditions that, individually or collectively, may cast
Basis for opinion
significant doubt on the company’s ability to continue as a
We conducted our audit in accordance with International
going concern for a period of at least twelve months from
Standards on Auditing (UK) (ISAs (UK)) and applicable
when the financial statements are authorised for issue.
law. Our responsibilities under those standards are further
described in the ‘Auditor’s responsibilities for the audit of
In relation to the company’s reporting on how it has applied
the financial statements’ section of our report. We are
the UK Corporate Governance Code, we have nothing
independent of the company in accordance with the ethical
material to add or draw attention to in relation to the
requirements that are relevant to our audit of the financial
directors’ statement in the financial statements about
statements in the UK, including the FRC’s Ethical Standard
whether the directors considered it appropriate to adopt
as applied to listed public interest entities, and we have
the going concern basis of accounting.
fulfilled our other ethical responsibilities in accordance with
Our responsibilities and the responsibilities of the directors
these requirements. We believe that the audit evidence we
with respect to going concern are described in the relevant
have obtained is sufficient and appropriate to provide a
sections of this report.
basis for our opinion.
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
Key audit
(same as previous period); and
Materiality
matters
Going concern (same as previous period).
Scoping
Key audit matters
Description Audit response
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)
KAM
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
Our results / Key
Disclosures
financial statements as a whole, and in forming our opinion thereon, and we do not
observations
provide a separate opinion on these matters.
In the graph below, we have presented the key audit matters, significant risks and other risks relevant to the audit
High
The impairment of property,
plant and equipment and right of
use assets
Going concern
Revenue - notable items from audit data analytics
Management override of controls –
the presentation of
Potential
The continuing
separately disclosed items
financial
application of IFRS
statement
16, Leases
Revenue – occurrence of
impact
automatic postings
Taxation - accuracy
Trade and other payables -
Hedge accounting and the fair value of swaps
completeness
Cash – existence and accuracy
Low
Low
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
In responding to the key audit matter, we performed the following audit
equipment (“PPE”) and right of use assets
procedures:
(“ROU assets”)
Considered the accounting policy for compliance with IAS 36 and that the
We identified impairment of PPE and ROU assets
as one of the most significant assessed risks of
application by the company is consistent with the stated policy;
material misstatement due to fraud and/or error.
Assessed the design effectiveness of controls, including the methodology
PPE represents the largest balance on the balance
applied by management to identify indicators of impairment;
sheet (30 July 2023: £1.4bn / 31 July 2022:
£1.4bn). Further to this, there are ROU assets
Understood and challenged management on the approach to creating the
recognised which must be considered for
Watchlist and challenged management on its completeness, including any pubs
impairment (30 July 2023: £0.4bn / 31 July 2022:
which are performing below the remainder of the estate since returning to a
£0.4bn).
more “normal” trading period post Covid-19 and the impact of the more recent
The directors consider each individual pub to be a
macro-economic uncertainties;
separate cash generating unit (“CGU”). The
directors are required to undertake an impairment
Obtained management’s risk categorisation and challenged their assessment of
assessment where events indicate that the carrying
the pub categorisation utilised in the impairment review;
value of the CGU may not be recoverable.
Recalculated the arithmetical accuracy and integrity of management’s
The process for measuring and recognising
impairment model, by checking the internal consistency of formulae to identify
impairment under International Accounting
Standard 36 ‘Impairment of Assets’ (“IAS 36”) is
indicators of impairment;
complex and requires significant judgement,
Agreed a sample of impairment model inputs to supporting documentation,
including assumptions within management’s
assessment of the impact of the geopolitical and
including lease agreements, historic pub profit figures and the fixed asset
cost of living factors on future trading activity for
register;
each pub, the determination of the appropriate
discount rate to be applied to those cashflows, as
Validated that the methodology of the impairment exercise is consistent with the
well as management’s projections for the future
requirements of IAS 36, including appropriate identification of CGU’s and the
financial performance of each pub and where
allocation of costs in the Value in Use (“VIU”) calculations. We engaged our
appropriate, the underlying market value of the
valuation experts to assess the reasonableness of the discount rate applied to
pub.
forecast cash flows;
Management identifies pubs which have an
indicator of impairment (management’s “Watchlist”
Compared management’s assumptions within the impairment model against the
of pubs). These identified pubs are then risk
uncertainties inherent within the current economic environment;
weighted by management into four categories
depending on how the pub has performed in the
Obtained corroborative evidence to support management’s judgements used for
current year compared to the prior year.
those pubs with indicators of impairment, with specific additional consideration
We have pinpointed our significant risk to those
on pubs identified in the significant risk categories, including evidence for
pubs with a reduction in profit in the current year
changes made to the pubs, discussions with pub / area managers, review of pub
when compared to the prior year which covers two
space and evidence for operational changes;
of the four Watchlist categories.
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.
Relevant disclosures in the Annual Report and
Key observations
Financial Statements 2023
We identified that additional impairments were required in relation to the impairment
Financial Statements: Note 13, PPE
of PPE and ROU assets. Management have considered and accepted these further
impairments and adjustments were made.
Accounting Policies: Important estimates,
impairment of PPE & ROU assets
Corporate Governance: Significant financial
reporting items
56
ANNUAL REPORT AND FINANCIAL STATEMENTS 2023
J D WETHERSPOON PLC
INDEPENDENT AUDITORS’ REPORT
Key Audit Matter How our scope addressed the matter
Going concern
In responding to the key audit matter, we performed the following
We identified going concern as one of the most significant
audit procedures:
assessed risks of material misstatement.
Obtained management’s base case and downside scenario
As auditors, we are required to “obtain sufficient appropriate
audit evidence about the appropriateness of management's
forecasts for the period to 31 October 2024, together with
use of the going concern assumption in the preparation and
supporting evidence for all key trading, working capital and cash
presentation of the financial statements and to conclude
flow assumptions;
whether there is a material uncertainty about the entity's
ability to continue as a going concern” (ISA (UK) 570).
Obtained management’s reverse stress test scenario, which reflects
Management has modelled a base case forecast in which,
a sales decline which management consider to be remote and
over the period to 31 October 2024 as it continues to emerge
management’s response via controllable mitigating actions;
from the pandemic, sales, profit and cash flow growth
continues.
We have performed arithmetical accuracy procedures on each of
Management have anticipated within this forecast continued
management’s forecast scenarios, including forecast liquidity and
high levels of inflation, particularly on food products, wages
covenant calculations;
and repairs.
Assessed the robustness of forecasts prepared by comparison to
A more cautious “downside” scenario has been analysed,
where there is no like-for-like sales growth in FY24. The
forecasts made in prior periods, including assessing management’s
company has reviewed, and is satisfied with, the mitigating
historic ability to forecast, in light of our understanding of the
actions it could take if such a scenario were to occur. Such
company’s operations;
actions could include reducing discretionary capital
expenditure, reducing costs and / or implementing price
Following our review of management’s board memorandum, we
increases.
identified the areas of business operations which could be most
Management also modelled a “reverse stress test” in which
affected by rising costs and sought evidence to corroborate
sales reduce by 12% when compared to the base case. The
Directors consider this scenario to be remote as, other than
management’s attempts to quantify the potential impact. We also
when the business was closed during the pandemic, it has
sought evidence to support that the mitigating actions highlighted by
never seen sales decline at anywhere close to that rate.
management would be achievable and effective;
Furthermore, the Company could take additional mitigating
actions, in such a scenario, to prevent any covenant breach.
Assessed the reasonableness of managements assertion that the
Following the cessation of a period of lender-agreed relaxed
prospect of not being able to refinance is remote. The audit team
covenants to 31 July 2023, the Company has reverted to its
were supported by internal debt advisory experts with this
original covenant targets and the Company is confident that
assessment; and
these targets will be met in the going concern assessment
period.
Assessed the disclosures made within the financial statements for
As set out in Note 20, the secured Revolving Credit Facility
consistency with management’s assessment of going concern and
totalling £875 million of which £630 million was drawn at 30
whether they are in line with the accounting standards.
July 2023, matures in February 2024 (£20m) and February
2025 (£855m).
Relevant disclosures in the Annual Report and
Key observations
Accounts 2023
We have nothing to report in addition to that stated in the ‘Conclusions
The company’s accounting policy on going concern is
relating to going concern’ section of our report.
shown in ‘accounting policies’ to the financial statements
on page 41.
Accounting policies: Going concern and Important
judgements
Directors’ Reports: Going concern
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
We defined materiality as the magnitude of misstatement in the financial statements that,
statements as a whole
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
In determining materiality, we made the following significant judgements.
made by auditor in
determining the
We evaluated a range of benchmarks, including revenue, profit before tax and total assets.
materiality
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.
Performance
We set performance materiality at an amount less than materiality for the financial statements as
materiality used to
a whole to reduce to an appropriately low level the probability that the aggregate of uncorrected
drive the extent of our
and undetected misstatements exceeds materiality for the financial statements as a whole.
testing
Performance materiality
£3,825,000, which is 75% of financial statement materiality.
threshold
Significant judgements
In determining materiality, we made the following significant judgements;
made by auditor in
determining the
Whether there were any significant adjustments made to the financial statements in prior
performance materiality
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
We determined a threshold for reporting unadjusted differences to the audit committee.
misstatements to the
audit committee
Threshold for
£255,000 and misstatements below that threshold that, in our view, warrant reporting on
communication
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
FSM: Financial statements materiality
year rolling
average
PM: Performance materiality
profit
PM
£108.3m
£3.825m,
TFPUM: Tolerance for potential uncorrected
75%
FSM
£5.1m,
misstatements
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
ASSOCIATE
MANAGEMENT BOARD
NON-EXECUTIVE
EMPLOYEE
EXECUTIVE BOARD
DIRECTORS
EMPLOYEE DIRECTOR
DIRECTORS
DIRECTORS
S
DIRECTORS AND OFFICERS
Tim Martin
, Chairman, aged 68
John Hutson
, Chief Executive Officer, aged 58
Founded the Company in 1979, having previously studied law at
Joined in 1991 and was appointed to the board in 1996. He is a
Nottingham University and qualified as a barrister. He became
graduate of Exeter University.
chairman in 1983.
Ⓑ Ⓜ
Ⓑ
James Ullman, Personnel and Retail Auditor Director, aged 52
Ben Whitley, Finance Director, aged 45
Joined in 1994 and was appointed to the board in 2022. He is a
Joined in 1999 and was appointed to the board in 2015. He is a
graduate of Brighton University and Birmingham City University.
graduate of Durham University and qualified as a chartered
He became a chartered internal auditor in 2011.
management accountant in 2012.
Ⓑ Ⓜ
Ⓑ Ⓜ
Hudson Simmons
, Employee Director, aged 51
Deborah
Whittingham
, Employee Director, aged 54
Joined in 1997 and was appointed to the board in 2021 and is
Joined in 1992 and was appointed to the board in 2021. She is
area manager for the Sheffield area. He is a graduate of
regional manager for the West Midlands.
Nottingham Trent University.
Ⓑ
Ⓑ
Ben Thorne
, Senior Independent Director, aged 64
Debra van Gene
, Non-Executive Director, aged 69
Appointed to the board in 2020. He is a graduate of Westminster
Appointed to the board in 2006 and is chair of the remuneration
University. He qualified as a solicitor in 1985. He is a consultant to
committee. She is a graduate of Oxford University. She has
WH Ireland.
previously been a partner at Heidrick and Struggles Inc and a
commissioner with the Judicial Appointments Commission.
Ⓑ Ⓐ Ⓝ Ⓡ
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
David Capstick
, IT and Property Director, aged 62
Joined in 2009 and was appointed Company secretary in 2014.
Joined in 1998 and appointed to the management board in 2003.
He is a graduate of Newcastle University and qualified as a
He is a graduate of the University of Surrey.
solicitor in 1997.
Ⓜ
Ⓑ Ⓜ
Martin Geoghegan, Operations Director, aged 54
Michael Barron, Commercial Director, aged 37
Joined in 1994 and appointed as operations director in 2004.
Joined in 2011 and appointed to the management board in 2022.
Ⓜ
He is a graduate of Sheffield University and qualified as a
Tom Ball, People Director, aged 47
chartered accountant in 2010.
Joined in 2009 and appointed to the management board in 2022.
Ⓜ
He is a graduate of Bournemouth University.
Paul Brimmer, Purchasing Director, aged 48
Ⓜ
Joined in 2006 and appointed to the management board in 2022.
Hannah Young, Deputy Finance Director, aged 42.
He became a member of the Chartered Institute of Procurement
Joined in 2013 and appointed to the management board in 2022.
and Supply in 2002.
She is a graduate of Bristol University and qualified as a chartered
Ⓜ
management accountant in 2006 and a chartered secretary in
2023.
Ⓜ
Will Fotheringham
, Associate Employee Director, aged 48
Emma Gibson
, Associate Employee Director, aged 36
Joined in 1998. Appointed as an associate employee director in
Joined in 2004. Appointed as an associate employee director in
2021. He is general manager for the north west England and north
2021. She is pub manager of The Imperial, Exeter.
Wales.
Key
Board
Management
Audit
Nomination
Remuneration
Ⓑ
Ⓜ
Ⓐ
Ⓝ
Ⓡ
member
board
committee
committee
committee
J D WETHERSPOON PLC
ANNUAL REPORT AND FINANCIAL STATEMENTS 2023
63
DIRECTORS’ REPORT
Directors
There are no agreements with the Company’s directors or
The directors of the Company who were in office during
employees which provide for compensation for loss of
the year and up to the date of signing the financial
office or employment which occurs because of a takeover
statements are listed on page 63.
bid.
Dividends
Statement of directors’ responsibilities
No dividend will be paid for the year.
The directors are responsible for preparing the annual
report, the directors’ remuneration report and the financial
Return of capital
statements, in accordance with applicable law and
At the annual general meeting of the Company, held on 18
regulations.
November 2021, the Company was given authority to
make market purchases of up to 19,312,523 of its own
Company law requires the directors to prepare financial
Shares. During the year to 30 July 2023, we purchased
statements for each financial year. Under that law, the
2,368,302 shares for share-based payments.
directors have elected to prepared the financial statements
in accordance with international accounting standards in
Directors’ interest in contracts
conformity with the requirements of the Companies Act
No director has any material interest in any contractual
2006. Under company law, the directors must not approve
agreement, other than an employment contract, subsisting
the financial statements unless they are satisfied that they
during or at the end of the year, which is, or may be,
give a true and fair view of the state of affairs and profit or
significant to the Company.
loss of the Company for that period. In preparing these
financial statements, the directors are required to:
Takeover directive disclosures
The Company has an authorised share capital comprising
select suitable accounting policies and then apply them
500,000,000 ordinary shares of 2p each. As at 30 July
consistently
2023, the total issued share capital comprised
make judgements and accounting estimates
128,750,155 fully paid-up shares of 2p each. The rights to
these shares are set out in the Company’s articles of
which are reasonable and prudent
association. There are no restrictions on the transfer of
state whether applicable UK-adopted international
these shares or their attached voting rights.
accounting standards (IASs) in accordance with the
requirements of the Companies Act 2006 have been
Details of significant shareholdings at year end
Followed, subject to any material departures disclosed and
and as at 30 July 2023 are given on page 82.
explained in the financial statements
No person holds shares with specific rights regarding
prepare the financial statements on the going-concern
control of the Company.
basis, unless it is inappropriate to presume that the
Company will continue in business
The Company operates an employee share incentive plan.
However, no specific rights with respect to the control of
The directors are responsible for keeping adequate
the Company are attached to these shares. In addition, the
accounting records which are sufficient to show and
Company operates a deferred bonus scheme, whereby,
explain the Company’s transactions and disclose with
should a takeover occur, all shares held in trust would be
reasonable accuracy at any time the financial position of
transferred to the employee immediately.
the Company and to enable them to ensure that the
financial statements and the directors’ remuneration report
The Company is not aware of any agreements among
comply with the Companies Act 2006 and article 4 of the
holders of securities known to the Company which may
IAS regulation. They are also responsible for safeguarding
result in restrictions on the transfer of securities or voting
the assets of the Company and hence for taking
rights.
reasonable steps for the prevention and detection of fraud
and other irregularities.
The Company has the power to issue and buy back shares
The directors confirm that:
as a result of resolutions passed at the annual general
meeting in 2022. It is the Company’s intention to renew
so far as each director is aware, there is no relevant
these powers; the resolutions approving them are found in
audit information of which the Company’s auditor is
the notice of the annual general meeting for 2023.
Unaware; and
the directors have taken all the steps which they ought
In the event of a change of control, the Company is obliged
to have taken as directors to make themselves aware of
to notify its main bank lenders. The lenders shall not be
any relevant audit information and to establish that the
obliged to fund any new borrowing requests; facilities will
Company’s auditor is aware of that information.
lapse 10 days after the change of control, if the terms on
which they can continue have not been agreed on.
The directors are responsible for preparing the annual
Any borrowings, including accrued interest, will become
report in accordance with applicable law and regulations.
immediately repayable on such lapse.
The directors consider that the annual report and financial
statements, taken as a whole, provide the information
There are no other significant agreements to which
necessary to assess the Company’s performance,
the Company is party which may be subject to change-of-
business model and strategy and are fair, balanced and
control provisions.
understandable.
64
ANNUAL REPORT AND FINANCIAL STATEMENTS 2023
J D WETHERSPOON PLC
DIRECTORS’ REPORT
The directors are responsible for the maintenance and
processes, with further details set out in the audit
integrity of the corporate and financial information included
committee’s report on pages 79-81.
on the Company’s website. Legislation in the United
Kingdom governing the preparation and dissemination of
To assess the impact of the Company’s principal risks and
financial statements may differ from legislation in other
uncertainties on its long-term viability, scenarios were
jurisdictions.
applied to the Company’s financial forecasts in the form of
reduced like-for-like sales compared to FY22. It is
To the best of our knowledge:
assumed that the Company’s financial plans would be
adjusted in response. Such actions could include reducing
the Company’s financial statements are prepared in
discretionary expenditure and/or implementing price
accordance with the UK-adopted international accounting
increases.
standards and have been prepared in accordance with the
requirements of the Companies Act 2006; and
The directors have determined that, over the period of the
the strategic report and directors’ report include a fair
viability assesment, there is not expected to be a
review of the development and performance of the
significant impact resulting from climate change.
business and the position of the Company, together with a
description of the principal risks and uncertainties which it
The Company has Revolving Credit Facilities in place of
faces.
£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,
Business relations
as well as current and prospective lenders, the company
Information on the Company’s relations with customers
believes it has a number of viable refinancing options.
and suppliers is disclosed in the strategic report on page
47.
Going concern
The directors have made enquiries into the adequacy of
Employment policies
the Company’s financial resources, through a review of the
Information on the Company’s employment policies,
Company’s budget and medium-term financial plan,
Including the appointment and replacement of directors’,is
including capital expenditure plans and cash flow
disclosed in the corporate governance report on pages 80-
forecasts. In line with accounting standards, the going
81.
concern assessment period is the 12-months from the date
of approval of these accounts (approximately the end of
Streamlined Energy and Carbon Reporting (SECR)
quarter 1 of FY25). Given the proximity to the going
Environmental disclosures can be found on pages 51-53.
concern review period, the Company has also considered
the February 2025 expiry of its current Revolving Credit
Articles of Association
Facility in its assessment.
The Company’s Articles of Association may only be
amended by special resolution at a general meeting of the
The Company has modelled a ‘base case’ forecast in
shareholders.
which recent momentum of sales, profit and cash flow
growth is sustained. The Company has anticipated within
Directors’ indemnities
this forecast continued high levels of inflation, particularly
As permitted by the articles of association, the directors
on wages, utility costs and repairs. The base case
have the benefit of an indemnity which is a qualifying third-
scenario indicates that the Company will have sufficient
party indemnity provision, as defined by section 234 of the
resources to continue to settle its debts as they fall due
Companies Act 2006. The indemnity was in force
and operate within its leverage covenants for the going
Throughout the last financial year and is currently in force.
concern assessment period.
Throughout the financial year, the Company also
purchased and maintained, directors and officers’ liability
A more cautious but plausible scenario has been analysed,
insurance, in respect of itself and its directors.
in which sales for FY24 are in line with FY23 (ie no sales
growth). The Company has reviewed, and is satisfied with,
Viability statement
the mitigating actions that it could take if such an outcome
In accordance with provision 31 of the UK Corporate
were to occur. Such actions could include reducing
Governance Code 2018, the directors confirm that they
discretionary capital expenditure, reducing costs or
have a reasonable expectation that the Company will
implementing price increases. Under this scenario, the
continue to operate and meet its liabilities, as they fall due,
Company would still have sufficient resources to settle
until the financial year in 2026.
liabilities as they fall due and sensible headroom on its
covenants through the duration of the going concern
The directors have determined that a three-year period is
review period.
an appropriate period over which to assess viability, as it
aligns with the Company’s capital investment plans and
The Company has also performed a ‘reverse stress case’
gives a greater certainty over the forecasting assumptions
which shows that the Company could withstand a 12%
used.
reduction in sales from those assessed in the ‘base case’
throughout the going concern period, as well as costs
The directors’ assessment has been made with reference
assumed to increase at a similar level to the downside
to the Company’s current position, financial plan and its
scenario, before the covenant levels would be exceeded
principal risks and uncertainties set out on pages 49-50,
towards the end of the period. The directors consider
specifically economic, regulatory, reputational and interest-
this scenario to be remote as, other than when the
rate risks. The details of these risks and uncertainties are
business was closed during the pandemic, it has never
the result of internal risk management and control
seen sales decline at anywhere close to that rate.
J D WETHERSPOON PLC
ANNUAL REPORT AND FINANCIAL STATEMENTS 2023
65
DIRECTORS’ REPORT
Furthermore the Company could take additional mitigating
Future developments
actions, in such a scenario, to prevent any covenant
The Company intends to continue to operate pubs and
breach.
hotels throughout the UK and Ireland. The Company aims
to continue to provide customers with good-quality food
The directors have determined that, over the period of the
and drinks, served by well-trained and friendly staff, at
going concern assessment, there is not expected to be a
reasonable prices.
significant impact resulting from climate change.
Events after the reporting period
Following the cessation of a period of lender-agreed
On 22 August 2023, the company disposed of all interest
relaxed covenants to 31 July 2023, the Company has
rate swaps in place, receiving £15 million to do so. At the
reverted to its original covenant targets and the Company
same time, the company took out a new interest-rate swap
is confident that these targets will be met in the going
of £200 million from 23 August 2023 through to 6 February
concern assessment period.
2025 at a rate of 5.665%.
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
By order of the board
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
Nigel Connor
certainty over cost inflation, the Company has chosen not
Company Secretary
to formally commence any refinancing exercise as at the
6 October 2023
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 statement
Annual cash bonus
Dear shareholder
The previous year was a loss-making year. Therefore, the
Company has decided to award a bonus to all employees
Salary increases and awards made to executive board
based on performance in the second half of the year,
members this year are in accordance with the
compared to a Company forecast. The committee is
remuneration policy agreed by shareholders at the
proposing that this be extended to executive directors,
Company’s Annual General Meeting (AGM) in December
which will result in an award of 8.25% of basic salary.
2020.
Deferred bonus scheme
We are presenting a new remuneration policy for approval
The deferred bonus scheme is a scheme which awards
by shareholders at this year’s AGM in November. The new
shares to all eligible senior managers throughout the
policy document follows this statement.
business including executive directors.
The revisions introduced in the new policy are driven by an
Under the agreed scheme, executive directors will receive
ambition to get back to, and increase on, 2019 levels of
a maximum 100% of their basic salary in shares.
company profitability. They are also made to ensure there
are sensible comparators in place, rather than
The calculation for this award is included underneath the
comparisons with the Company performance which was
bonus and incentives table on page 73.
inevitably suppressed during the pandemic.
Company share incentive plan (SIP)
Company performance in the second half of this financial
The Company SIP is open to all employees in the
year has shown clear signs of emerging from the after-
Company, at varying levels, according to each individual’s
effects of the pandemic lockdown.
seniority and length of service.
As a result, the annual bonus award for the coming year
Executive Directors received an amount equivalent to 25%
will be based on percentage increases of profit compared
of their salary in shares. The CEO and Personnel & Retail
to performance in the second half of the current year
Audit director received additional awards equivalent to
annualised.
10% and 5% respectively of their salaries, because of their
lengths of service. These additional awards are available
Deferred Bonus Scheme (DBS) awards will be made on
to all employees with over 25 years’ service with the
performance relative to FY2019 rather than FY2023, until
Company.
that level of performance is surpassed.
Pension
We lay out our ESG targets and strategy on pages 51-53.
A new all-employee pension scheme has been introduced,
The committee considered introducing specific ESG
in line with current guidance and applies to all employees
measures into individuals’ remuneration incentive plans.
from 1 August 2022. Contributions of 12% to executive
This is a highly complex and evolving area, and on
directors are aligned to this scheme. The CEO and
balance the committee felt it is too early in the learning
Personnel & Retail Auditor Director received additional
curve to assign specific targets to individuals, which may
contributions because of their lengths of service. These
lead to unintended consequences. It is an area the
additional contributions are available to all employees with
committee will leave open for review in the future.
over 25 years’ service with the Company.
Salary
In setting remuneration for the executive board, the
In the year ending 30th July 2023 the salaries of the CEO
committee takes into account wider workforce
and the Personnel and Retail Audit Director were not
remuneration policies throughout the Company. Many of
increased. The salary of the Finance Director was
the elements of executive board remuneration outlined
increased by 2%.
above extend throughout much of the Company, at varying
levels.
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.
Debra van Gene
Chair of the Remuneration Committee
An increase of 7.8% for the Finance Director and 11.1%
6 October 2023
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 achiev
able and performance criteria
Base salary
Provide attractive
Salaries are reviewed at least annually, with any changes normally taking effect from 1 August
and fair
each year.
remuneration
for directors.
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 in
formation and the level of increase being offered to other
employees.
Benefits
Provide attractive
A range of taxable benefits is available to executive directors. These benefits comprise principally
and fair
the provision of a car allowance, life assurance, private medical insurance and fuel expenses.
remuneration
for directors.
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.
Pension
Provide attractive
The Company does not operate any defined benefit pension schemes.
and fair
remuneration
The Company’s pension contributions are based on length of service. The contribution detailed
for directors.
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
Company pension contribution %
Less than one year 3
Over one year 4
Over five years 5
Over 10 years 6
Over 15 years 8
Over 20 years 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
Incentivise
Annual bonus payments are paid in cash, at the discretion of the remuneration committee.
plan
directors
to perform to a
The bonus is based on profit growth, multiplied by a factor of 1.5 and paid to a maximum of 45%
high level.
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.
68
ANNUAL REPORT AND FINANCIAL STATEMENTS 2023
J D WETHERSPOON PLC
DIRECTORS’ REMUNERATION REPORT
Component
Reason
Operation, maximum achievable and performance criteria
Share incentive
Align directors’
The SIP allocates shares equivalent to 5% of salary to all Company employees after an 18-month
plan (SIP)
interests with
qualifying period. Shares do not vest for at least three years under this plan – and tax-free returns
those of
are possible, if shares are held for five years or more.
shareholders,
employees and
The Company offers extra shares under this scheme to some employees:
the wider
pub managers receive an extra 5% annual award; head-office staff 10–15%; directors, including
community.
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.
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. Th
e 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.
Deferred
Align directors’
The Company does not operate a shareholding scheme with a minimum vesting period of five
bonus scheme
interests with
years.
those of
shareholders,
The deferred bonus scheme may award shares to all senior managers, including executive
employees and
directors. Bonus awards are made under the scheme, annually, at the discretion of the
the wider
remuneration committee.
community
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 th
ird 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.
Aw
ards 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
Provide attractive
The fees paid to non-executive directors are determined by the executive board, taking into
directors’ fees
and fair
account the level of fees for similar positions in the market and the time commitment which each
remuneration
non-executive director makes.
for directors.
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
Shareholdings
Approach to recruitment remuneration
Executive directors are required to maintain a minimum
The aim, when agreeing on components of a remuneration
shareholding. Minimum holding requirements are set by
package, including any variable pay for incoming directors,
the remuneration committee for each director and
would be in accordance with the table above. Account is
reviewed every three years, when the remuneration policy
taken of the individual’s experience, the nature of the role
is reviewed. Minimum holding requirements include
being offered and his or her existing remuneration
awarded shares which have not yet vested.
package. Relocation expenses or allowances may be paid,
as appropriate.
To the extent that any executive director holds under the
required number of shares, at least 50% of any vested free
The committee may, at its discretion, offer cash, share-
share (SIP) awards must be retained, until the required
based elements or additional pension contributions, as
shareholding is attained.
necessary, to secure an appointment, although it does not
normally do so. Shareholders will be informed of any such
On ceasing to be an executive director, a minimum holding
payments at the time of appointment.
of 50% of the previous requirement must be maintained for
a minimum period of 12 months.
Our main principle is that payments made to prospective
directors as compensation for loss of benefits at a previous
This guideline applies to shares which vest following the
Company are inherently unfair, since it would be extremely
adoption of this guideline. Any shares purchased by
rare for anyone below board level to receive this sort of
executives would not be subject to the guideline.
compensation.
The application of the minimum shareholding requirement
Chairman and directors’ service contracts
is at the discretion of the remuneration committee.
The executive directors are employed on rolling contracts,
requiring the Company to give up to one year’s notice of
The current minimum shareholding requirements are 200%
termination, while the director may give six months’ notice.
of base salary, calculated on a £15.71 share price at the
start of FY19, when this holding requirement was
In the event of termination of employment with the
introduced.
Company, without the requisite period of notice, executive
directors’ service contracts provide for the payment of a
Number of shares
sum equivalent to the net value of salary and benefits to
Minimum
Shares held
Requirement
as 30 July 2023
1
which the executive would have been entitled during the
notice period.
B Whitley 28,000 85,921
J Hutson
76,000 358,337
The executive is required to mitigate his or her loss and
J Ullman 22,916 72,918
such mitigation may be taken into account in any payment
made. The Company’s policies on the duration of directors’
T Martin 41,000 30,774,709
service contracts, notice periods and termination payments
1
as per Directors and connected persons’ interests in
are all in accordance with best industry practice.
shares table below
Difference between the policy for directors and that for
The commencement dates for executive directors’ service
employees
contracts were as follows:
Members of the wider management team may receive
each of the components of remuneration awarded to the
Tim Martin – 20 October 1992
executive directors, although the amounts due for each
John Hutson – 4 September 1996
component may vary, depending on their level of seniority.
Ben Whitley – 2 November 2015
James Ullman – 4 May 2022
Non-executive directors are not entitled to any component,
other than fees.
All executive directors will be standing for re-election at the
AGM. Their current service contracts do not have an
The wider employee population of the Company will
explicit expiry date.
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
DIRECTORS’ REMUNERATION REPORT
Non-executive directors
The annual variable values include the cash bonus which
The non-executive directors hold their positions, pursuant
may be achievable. In the case of ‘expected’ an average
to letters of appointment dated 4th November 2022, with a
percentage achieved over the 7 years prior to FY20 has
term of 12 months.
been used.
If their appointment is terminated early, non-executive
The long-term incentive plan values include:
directors are entitled to the fees to which they would have
The fixed 25% awarded under the Company’s
been entitled up to the end of their term. They do not
participate in the Company’s bonus or share schemes.
share incentive plan
Their fees are determined by the executive directors,
An average achieved in respect of the
following consultation with professional advisers, as
appropriate.
deferred bonus scheme over the last five years
Employee directors
Payments for loss of office
The employee directors hold their positions, pursuant to
The Company’s policy is that the period of notice for
letters of appointment dated 9 December 2021, with a term
executive directors will not exceed 12 months; accordingly,
of three years.
the employment contracts of the executive directors are
terminable on 12 months’ notice by the Company or six
External appointments
months’ notice by a director.
Executive directors are not allowed to take external
In the event of gross misconduct, the Company may
appointments without the prior consent of the Company.
terminate a director’s employment without notice or
The Company has not released any executive directors to
compensation.
serve as non-executive director elsewhere.
In the event of a director’s departure, the Company’s policy
Illustration of the application of the
on termination payments is as follows:
remuneration policy
The Company will seek to ensure that no more is paid
The charts below set out the composition of the chairman
than is warranted in each individual case
and executive directors’ remuneration packages in £000,
at a minimum, a reasonable expectation target and as a
Salary payments will be limited to notice periods
possible maximum:
There is no entitlement to bonus paid (or associated
Tim Martin
deferred shares or SIPs) following notice of termination
Maximum
100%
£338
The committee’s normal policy is that, where the
Expected
100%
£338
individual is considered a ‘good leaver’, a prorated bonus
may be paid
Minimum
100%
£338
The Company may enable the provision of outplacement
£0 £100 £200 £300
services to a departing director
John Hutson
Maximum
40%
15%
43%
£1,913
Retirement policy
Expected
52%
4%
32%
£1,495
The Company does not have a mandatory retirement age.
Minimum
77%
19%
£987
Employees wishing to retire should be aged at least 55
years at the date of leaving (the minimum age a person
£0 £400 £800 £1,200 £1,600 £2,000
can access a workplace pension) and serve their
contractual notice period. Retiring employees are
Ben Whitley
permitted to retain any unvested shares held in any
Maximum
39%
15%
44%
£751
Company scheme.
Expected
50%
5%
42%
£584
Minimum
Consideration of employment conditions
76%
21%
£381
elsewhere in the Company
£0 £200 £400 £600 £800
The committee receives information on salary increases,
bonus payments and other benefits available at the
James Ullman
Company. These are taken into consideration when
Maximum
40%
17%
43%
£546
conducting the review of executive remuneration, although
Expected
52%
5%
32%
£428
no formal consultation with employees is undertaken in this
regard.
Minimum
78%
19%
£285
£0 £200 £400 £600
Consideration of shareholders’ views
Fixed Annual variable Long-term incentive
Any views in respect of directors’ remuneration expressed
to the Company by shareholders have been, and will be,
The fixed annual values include:
taken into account in the formulation of the directors’
Fixed annual salary, benefits and allowances, in line
remuneration policy.
with those outlined in the policy section, and based on the
salaries applicable as at 30 July 2023
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
Taxable
Performance
Long-term
Pension
Total
Salary/fees
1
2
4
3
Total Total Fixed
benefits
bonus
incentives
contributions
Variable
2023
2022
2023
2022
2023
2022
2023
2022
2023
2022
2023
2022
2023
2022
2023
2022
£000
£000
£000
£000
£000
£000
£000
£000
£000
£000
£000
£000
£000
£000
£000
£000
Executive
directors
J Hutson 638 638 53 54 – – 277 223 104 102 1,072 1,017 795 794 277 223
S Cacioppo 67 358 10 38 – – 30 125 11 57 118 578 88 453 30 125
B Whitley 255 250 30 29 – – 84 62 33 30 402 371 318 309 84 62
J Ullman 180 45 26 9 – – 64 – 25 6 295 60 231 60 64 –
1,140 1,291 119 130 – – 455 410 173 195 1,887 2,026 1,432 1,616 455 410
Non-executive
directors and
chairman
T R Martin 324 324 14 13 – – – – – – 338 337 338 337 – –
B Thorne 54 54 – – – – – – – – 54 54 54 54 – –
D van Gene 54 54 – – – – – – – – 54 54 54 54 – –
R Beckett 16 54 – – – – – – – – 16 54 16 54 – –
H Morley 54 54 – – – – – – – – 54 54 54 54 – –
D Whittingham 8 5 – – – – – – – – 8 5 8 5 – –
H Simmons 8 5 – – – – – – – – 8 5 8 5 – –
518 550 14 13 – – – – – – 517 563 517 563 – –
Total
1,658
1,841
133
143
–
–
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.
B Whitley
J Hutson
J Ullman
Maximum Awarded
£
£
£
Profit growth 45.0% 8.25% 21,038 52,665 14,850
Total performance bonus
45.0% 8.25% 21,038 52,665 14,850
Employee share scheme
25.0% 25.0% 63,750 159,581 43,115
Employee share scheme – long service*
5.0% 5.0% - - 8,623
Employee share scheme – long service**
10.0% 10.0% - 63,832 -
Deferred Bonus scheme***
100.0% 100.0% 255,000 638,366 180,000
Total long term incentives 140.0% 318,750 861,779 231,738
Total
180
.0%
3
39,788
914,444
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
Fair value in £
*Share **Deferred
Share Deferred
Incentive Bonus
Incentive Bonus
1
2
Plan
Scheme
Total Plan Scheme Total
B Whitley 11,943 16,881 28,824
63,115 115,531 178,646
J Hutson 42,320 42,482 84,802
223,414 290,749 514,162
J Ullman 9,755 11,488 21,243
51,738 78,623 130,360
64,018 70,861 134,869 338,267 484,902 823,169
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
Value of hypothetical £100 holding (£)
Share Incentive
Deferred Bonus
Shares
1
Plan
2
Scheme
3
2023
T R Martin
30,774,709
-
-
30,774,709
B Whitley
17,726
22,014
46,181
85,921
J Hutson
165,617
76,664
116,056
358,337
J Ullman
24,654
16,522
31,742
72,918
H Simmons
1,189
3,006
-
4,195
D Whittingham
3,868
6,591
-
10,459
B Thorne
2,050
-
-
2,050
D van Gene
3,777
-
-
3,777
8,611 -
-
H Morley
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
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
DIRECTORS’ REMUNERATION REPORT
Chief executive officer’s remuneration
It is believed that using a consistent methodology with that
Long-term
Performance
of gender pay reporting will produce the most
incentives
bonus
scheme
understandable ratios.
Single figure
payment
shares
of total
achieved
vesting
remuneration
against
There has been no comparison between dividends and
against
maximum
share buy-backs this year, as there has been no such
maximum
possible
possible*
events in the current and previous financial year.
John Hutson £000 % %
2023 1,072 - 100
Remuneration committee
The remuneration committee comprises the following
2022 1,017 - 100
independent directors: Debra van Gene (chair), Ben
2021 813 - 100
Thorne and Harry Morley.
2020 738 - 100
2019 1,035 10 100
The committee meets regularly and considers executive
2018 1,490 29 100
directors’ remuneration annually. It approves all
2017 1,698 85 100
contractual and compensation arrangements for the
2016 1,187 21 100
executive directors, including performance-related
2015 1,202 10 100
payments.
2014 741 19 100
Shareholders’ vote on 2022 directors’
2013 1,079 43 100
remuneration report
* As long-term incentive scheme shares issued have no
The table below shows the voting outcomes at the 17
further performance criteria attached, all shares previously
November 2022 AGM for the directors’ remuneration
awarded vest in full when the vesting date is reached.
report.
Number of
% of
The following table compares the change in remuneration
votes votes
of all the directors, non-executive directors and chairman
with that of all employees
For
94,480,039 95.91%
Against
4,001,408 4.06%
Change in
Change in
Change in
Abstentions
31781 0.03%
annual
annual
taxable benefits
salary
bonus
Total cast
98,513,228 100.00%
%
%
%
Ben Whitley 2
3.4
-
All votes at the AGM were passed with at least
John Hutson -
(1.9)
-
85% of the cast votes.
James Ullman -
-
-
Shareholders’ vote on 2021 directors’
Tim Martin -
7.7
-
remuneration policy
Ben Thorne -
-
-
The table below shows the voting outcomes at the 18
Debra Van Gene -
-
-
November 2021 AGM for the directors’ remuneration
Harry Morley -
-
-
report.
Deborah Whittingham
-
-
-
Number of
% of
Hudson Simmons -
-
-
votes
votes
Total Employees 6.7
14.2
35.7
For 93,104,202
92.36%
Against
7,666,690
7.61%
Change in total employees’ salary is calculated based on
Abstentions
37,197
0.03%
the amounts paid to all employees adjusted for
redundancy and employer’s national insurance payments,
Total cast 100,808,089
100.00%
divided by the number of hours worked by employees.
All votes at the AGM were passed with at least 80% of the
Chief executive’s pay ratios
cast votes.
The table below shows the chief executive’s total
remuneration, as disclosed in the single-figure table,
The Company has stated, on numerous occasions, its view
compared with that of full-time equivalent employees’
that the Company benefits from the experience of directors
median (50th), 25th and 75th percentiles in the UK.
who have served more than nine years and does not agree
that it impacts the individual’s independence.
Pay ratios table
Year Method 25th 50th 75th
The company has continued to engage with shareholders
2023 Option B 54:1 49:1 45:1
regarding its views on board composition and intends
2022 Option B 47:1 45:1 41:1
doing so going forwards.
The Company has used the same data used for gender
By order of the board
pay reporting to determine the median, 25th and 75th
percentile employees. This method is called option B in
The Companies (Miscellaneous Reporting) Regulation
Nigel Connor
2018.
Company Secretary
6 October 2023
Company Secretary
J D WETHERSPOON PLC
ANNUAL REPORT AND FINANCIAL STATEMENTS 2023
75
CORPORATE GOVERNANCE
Introduction
For this reason, it is believed best for the Company to
This section of the report sets out how the Company has
continue with its current system of ‘self-evaluation’.
applied the relevant principles and provisions of the 2018
code and identifies and explains where it has not.
30 – Long-term shareholdings
1. Board leadership and Company purpose (page 77)
To promote long-term shareholdings by executive directors
2. Division of responsibilities (page 78)
and align their interests with shareholders, the code
3. Composition, succession and evaluation (page 80)
requires that any share awards given to executive directors
4. Audit, risk and internal control (pages 79-81)
should have a minimum vesting period of five years. The
5. Remuneration (pages 67-75).
executive directors receive shares under schemes which
are open to other employees and have vesting periods of
Statement of compliance
under five years. The Company has disclosed details of
The board believes that the Company has been compliant
the share award schemes in the remuneration policy on
with the code throughout the 52 weeks ended 30 July
pages 68-69. To promote long-term shareholding by
2023, except as described below.
executive directors, the Company requires directors to hold
a minimum number of shares as disclosed on page 70.
3 – Dialogue with shareholders
Restrictions are in place on the sale of shares, if directors
have not achieved the minimum holding.
The code indicates that the chairman should discuss
governance and strategy with major shareholders. The
38 – Alignment of pension contribution rates of executive
chairman has had many discussions with shareholders
directors with wider workforce
since the Company’s flotation in 1992, although corporate
governance has rarely been raised. The majority of
The code states that pension contribution rates for
discussions with major shareholders now takes place
executive directors and payments in lieu, should be
among the CEO, finance director and shareholders. These
aligned with those available to the workforce. As set
discussions are relayed to, and considered by, the board.
out in the 2020 remuneration policy, the company took
The chairman is available for discussion with major
the decision that existing executive directors would
shareholders, when requested.
continue to receive 12% of base salary on the basis
that it had never been excessive, is lower than the average
10 – Non-executive directors’ independence
for a FTSE 250 Company and is not disproportionate to
the wider workforce. In August 2022, the Company
Debra van Gene has served more than nine years on the
changed its employee pension policy to reward long
board and so may not be considered independent under
service rather than being based on rank/job title. As the
the code. The board considers that her performance as a
relevant executive directors have the required long service
non-executive director continues to be effective.
entitlements, their existing pension contributions are now
aligned with the policy applicable to the wider workforce.
She contributes significantly as a director through her
individual skills, considerable knowledge and experience of
A full version of the code is available on the official website
the Company. She demonstrates strong independence in
of the Financial Reporting Council: frc.org.uk
how she discharges her responsibilities. Consequently, the
board has concluded that, despite the length of tenure,
Board leadership and Company’s purpose
there is no association with management which could
compromise her independence.
The board of directors
Tim Martin, chairman
19 – Chairman’s term
John Hutson, chief executive officer
Ben Whitley, finance director
Tim Martin has served more than nine years as chairman
James Ullman, personnel and retail auditor director
of the board. The board considers that his considerable
Debra van Gene, non-executive director
knowledge and experience from founding the Company
Harry Morley, non-executive director
and leading it for over 40 years have had a positive effect
Ben Thorne, non-executive and senior independent
on its performance.
director
Deborah Whittingham, employee director
The board believes that it is in the interest of the Company
Hudson Simmons, employee director
and its shareholders for Tim Martin to remain as chairman.
Su Cacioppo retired from the company and the board on 7
21 – External board evaluation
October 2022.
A requirement of corporate governance is a
Sir Richard Beckett KC retired from the board on 17
recommendation for a third party to evaluate the
November 2022.
functioning of the board. Delegation of a key task of the
chairman and of the directors of the board itself to a third
Will Fotheringham and Emma Gibson attend board
party, often with little or no connection with the Company’s
meetings in their capacity as associate employee directors.
business and with a very limited knowledge of the
directors, may be a dangerous step for a board to take. It
The board considers each of Debra van Gene, Ben Thorne
is the function of the board itself to evaluate its own
and Harry Morley to be independent.
performance – and that performance is most evident from
the results of the underlying business.
76
ANNUAL REPORT AND FINANCIAL STATEMENTS 2023
J D WETHERSPOON PLC
CORPORATE GOVERNANCE
Biographies of all board directors are on page 63 and on
Legal matters
Institution of legal proceedings, where costs
the Company’s website: jdwetherspoon.com
exceed certain values
The chairman regularly meets the non-executive directors
Secretarial
and evaluates the performance of the board, its
Call of all shareholders’ meetings
committees and its individual directors.
Delegation of board powers
Disclosure of directors’ interests
The Company’s purpose and how it establishes its values
General
and culture through engagement with employees are
Board framework of executive
disclosed on page 47.
remuneration and costs
Directors’ conflicts of interest
Culture and values
The board expects the directors to declare any conflicts of
The board monitors the culture and the values of the
interest and does not believe that any material conflicts of
Company in several ways:
interest exist.
Appointing employee directors to the board
Meeting and talking to employees from the pubs
Relations with shareholders
during pub visits, regional meetings and at weekly
The board ensures that all its members are kept aware of
head office meetings
Area managers attending the opening section of
both the views of major shareholders and changes in the
the board meetings to discuss issues relating to
major shareholdings of the Company. Efforts made to
pub operations and the Company generally
accomplish effective communication include:
Reviewing the outcome of weekly discussion
Annual general meeting, considered to be an important
meetings of selected pub and area managers led
forum for shareholders to raise questions with the board
by senior Company employees
Reviewing whistleblowing reports and outcomes
Regular feedback from the Company’s stockbrokers
via the audit committee
Interim, full and ongoing announcements circulated to
Division of responsibilities
shareholders
It is not helpful, in a company like Wetherspoon, for there
Any significant changes in shareholder movement being
notified to the board by the company secretary, when
to be high barriers or exaggerated distinctions between the
necessary
role of chairman and that of chief executive officer.
However, some general distinctions are outlined overleaf
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 chief executive officer is responsible for the smooth daily
the board and ensuring that all directors are fully
running of the business
informed of matters relevant to their roles
Delegated responsibility of authority from the Company to
Developing and maintaining effective management controls,
exchange
contracts for new pubs and to sign all contracts
planning and performance measurements
with suppliers
Providing support, advice and feedback to the chief
Maintaining and developing an effective organisational structure
executive officer
Supporting the Company’s strategy and encouraging the
External and internal communications, in conjunction with the
chief executive officer with that strategy’s development.
chairman, on any issues facing the Company
Chairing general meetings, board meetings, operational
Implementing and monitoring compliance with board policies
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,
Timely and accurate reporting of the above to the board
appraisal and remuneration, by way of making
recommendations to the remuneration committee
Providing support to executive directors and senior
Recruiting and managing senior managers in the business
managers
of the Company
Helping to provide the ‘ethos’ and ‘vision’ of the
Developing and maintaining effective risk-management
Company, after discussions and debates with employees
and regulatory controls
of all levels, customers and shareholders.
Helping to provide information on customers and
Maintaining primary relationships with shareholders and investors
employees’ views by calling on pubs
Helping to make directors aware of shareholders’
Chairing the management board responsible for implementing the
concerns
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
9 4 1
1
Tim Martin 8 N/A N/A N/A
John Hutson 9 N/A N/A 1
Ben Whitley 9 4 N/A 1
Debra van Gene 9 4 1 1
Harry Morley 8 4 1 1
Nigel Connor 9 4 N/A N/A
Ben Thorne 9 4 1 1
James Ullman 9 4 N/A 1
Deborah Whittingham 9 N/A N/A N/A
Will Fotheringham 9 N/A N/A N/A
Hudson Simmons 9 N/A N/A N/A
Emma Gibson 9 N/A N/A N/A
78
ANNUAL REPORT AND FINANCIAL STATEMENTS 2023
J D WETHERSPOON PLC
CORPORATE GOVERNANCE
those considered by the committee, to be the most
Audit, risk and internal control
significant:
The provision for the impairment of fixed assets –
Audit committee
several judgements are used in making this calculation,
The committee’s primary role is to assist the board
primarily on expected future sales and profits. The
in the provision of effective governance over the
committee received reports and questioned management
Company’s financial reporting, risk management and
on the calculations made and the assumptions used
internal control; in particular, it performs the
following activities:
Significant one-off items of expense or income are
reported as separately disclosed on the face of the income
Assumes direct responsibility for the appointment,
statement. All separately disclosed items are reviewed by
compensation, resignation and dismissal of the external
the committee
auditors, including review of the external audit, its cost and
The committee reviewed the financial plans, modelled
effectiveness
scenarios and assumptions made by the Company in
Reviews the independence of the external auditors,
support of the presentation of the financial statements on a
including consideration of the level of non-audit work
going concern basis
carried out by them
The committee reviewed and raised questions
Reviews the scope and nature of the work to be
on the calculations made by the Company in relation to the
performed by the external auditors, before audit
hedge accounting and effectiveness for interest-rate
commences
swaps. The committee is satisfied that the judgements
made by management are reasonable and that appropriate
Reviews the half-year and annual financial statements
disclosures have been included in the accounts.
Ensures compliance with accounting standards and
monitors the integrity of the financial statements and
Non-audit services
formal announcements relating to the financial
During the year, the Company made no use of specialist
performance of the Company and supports the board in its
teams from Grant Thornton UK LLP, relating to accounting
responsibility to ensure that the annual financial
or tax services. The fees paid to Grant Thornton UK LLP
statements are fair, balanced and understandable
for non-audit services were £82,000 (2022: £55,000),
relating to interim review procedures. The use of Grant
Reviews the internal audit plan, which is updated to
Thornton UK LLP for non-audit work is monitored regularly,
reflect the changing needs of the business and the
to achieve the necessary independence and objectivity of
concerns of management and the audit committee
the auditors. Where the auditors provide non-audit
Reviews and raises questions on all internal audit
services, their objectivity and independence are
reports and requests management to adjust the
safeguarded by the use of different teams. See note 2 on
prioritisation of mitigating actions, as needed. Areas
page 13, for a breakdown of the auditor’s remuneration for
reviewed this year included supply chain and distribution
audit and non-audit services.
centre, pub closures, system security, IT, cyber-crime,
changes in business environment, decline in like-for-like
External auditors
sales volume and escalating costs of labour
The audit committee is responsible for making
recommendations to appoint, reappoint or remove external
Reviews, with the support of specialists as required,
auditors. Following a review by the audit committee, the
controls over access to the IT systems used around the
board agreed to recommend, at the AGM in November
business and agrees with management on the timing of
2023, the reappointment of Grant Thornton UK LLP as
any mitigating actions to be carried out
external auditors.
Reviews and monitors procedures in relation to the
Company’s whistleblowing policy
Audit-tendering and rotation
The audit committee keeps under review the regulatory
Reviews and questions the effectiveness of
requirements on audit-tendering and rotation.
all risk-management and internal control systems
The Company will be required to change its audit firm for
the year ending 25 July 2038, at the latest. The audit was
Reviews the retail audit director’s statement on
last tendered in 2018 – and Grant Thornton UK LLP has
internal controls on completed audits
been in place as the Company’s auditor for six years.
Considers the overall impact on the business of the
The disclosures provided in this report constitute the
matters arisen from the various reviews described above
Company’s statement of compliance with the requirement
and any other matters which the auditors, internal or
of the statutory audit services for large companies market
external, may bring to the attention
investigation (mandatory use of competitive tender
of the committee
processes and audit committee responsibilities) order
2014.
Ensures that all matters, where appropriate, are raised
and brought to the attention of the board
Effectiveness of external auditors
The audit committee assesses the ongoing effectiveness
Significant financial reporting items
of the external auditors and audit process, on the basis of
The accounting policies of the Company and the estimates
meetings and internal reviews with finance and other
and judgements made by management are assessed by
senior executives.
the committee for their suitability. The following areas are
J D WETHERSPOON PLC
ANNUAL REPORT AND FINANCIAL STATEMENTS 2023
79
CORPORATE GOVERNANCE
In reviewing the independence of the external auditors, the
reviews, assessments and management of significant risks
audit committee considers several factors. These include
took place throughout the year under review and up to the
the standing, experience and tenure of the external
date of the approval of the annual report.
auditors, the nature and level of services provided and
confirmation from the external auditors that they have
The Company has an internal audit function
complied with relevant UK independence standards. The
which is discharged as follows:
terms of reference of the audit committee are available on
Regular audits of the Company’s stock
the Company’s website.
Unannounced visits to pub sites
Risk management
Monitoring systems which control the Company’s cash
The board is responsible for the Company’s risk-
Health and safety visits, ensuring compliance
management process.
with Company procedures
The internal audit department, in conjunction with feedback
from senior management of the business functions,
Reviewing and assessing the impact of
produces a risk register annually.
legislative and regulatory change
The identified risks are assessed, based on the likelihood
Risk-management process, identifying key risks facing
of a risk occurring and the potential impact to the business,
the business
should the risk materialise.
The Company has key controls, as follows:
The retail audit director determines and reviews the
Authority limits and controls over cash-handling,
risk-assessment process and will communicate the
purchasing commitments and capital expenditure
timetable annually.
A budgeting process, with a detailed 12-month operating
plan and a mid-term financial plan, both approved by the
The Audit Committee reviews the risk register at each
board
meeting, with a schedule of audit work agreed on, on a
rolling basis. The purpose of this work is to review, on
Business results reported weekly, with a report
behalf of the Company and the board, those key risks and
compared with budget and the previous year
the systems of control necessary to manage such risks.
Forecasts prepared regularly throughout the year,
Where recommendations are made for changes in
for review by the board
systems or processes to reduce risk, internal audit will
follow up regularly to ensure that those recommendations
Complex treasury instruments are not used. The
are implemented.
Company, from time to time, as stated in this report and
accounts, enters into swap arrangements which fix interest
No significant failings of internal control were identified
rates at certain levels for a number of years and enters into
during these reviews.
supply arrangements with fixed prices for electricity and
gas, for example, which run for between one and three
A summary of the financial risks and treasury policies can
years
be found on pages 49-50, together with other risks and
An annual review of the amount of external insurance
uncertainties.
which it obtains, bearing in mind the availability of such
cover, its costs and the likelihood of the risks involved
Emerging risks
The Company monitors emerging risks through the receipt
Regular evaluation of processes and controls,
of advice and feedback from head office and pub staff,
in relation to the Company’s financial
customers, suppliers, and several external advisers and by
reporting requirements
maintaining an awareness of the wider economic, political
and social environment.
The directors confirm that they have reviewed the
effectiveness of the system of internal control.
Any potential risks identified will be discussed in the
relevant internal meetings, where any potential impact on
Remuneration and nomination
the business will be considered. Any significant risks
identified will be added to the Company’s risk register.
Remuneration committee
The committee is responsible for determining the
Internal control
remuneration received by executive directors and senior
During the year, the Company provided an internal audit
managers. When setting levels of remuneration, the
and risk-management function. The creation of a system of
committee seeks to ensure that they are sufficient to
internal control and risk mitigation is a key part of the
attract and retain people with the necessary skills and
Company’s operations and culture. The board is
experience. The committee seeks to ensure that
responsible for maintaining a sound system of internal
remuneration is not excessive and is in line with amounts
control and reviewing its effectiveness.
paid by comparable companies. In setting executive
The function can only manage, rather than entirely
directors’ remuneration, the committee takes into account
eliminate, the risk of failure to achieve business objectives.
wider workforce remuneration policies throughout the
It can provide only reasonable, and not absolute,
Company, with many elements extending throughout much
assurance against material misstatement or loss. Ongoing
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
The remuneration policy operated as intended during the
personnel and management practices which ensure that
year – no changes were made and normally no discretion
no individual receives less favourable treatment
is applied.
on the grounds of his or her race, religion or belief,
nationality, ethnic origin, age, disability, gender
The directors’ report on remuneration is set out on pages
(including gender reassignment), sexual orientation, part-
67-75.
time status or marital status.
Employees who become disabled will be retained, where
Directors’ remuneration is clearly presented in the
possible, and retrained, where necessary.
accounts. The remuneration policy is clearly stated, with
the calculation of performance measures explained. The
The Company has established a range of policies,
remuneration policy does not rely overly on target-based
covering issues such as diversity, employees’ well-being
incentives, with share awards normally given based on
and equal opportunities, aimed at ensuring that all
profits, earnings per share and owners’ earnings growth,
employees are treated fairly and consistently.
as well as some shares awarded without performance
targets as part of a Companywide scheme. However,
The Company has also established the following network
during the current year no such award was given based on
groups to foster discussion and generate ideas about
such targets.
these issues:
LGBTQIA+
Awards made are predictable and within a range of values.
Women
The remuneration committee can apply discretion in the
Race and ethnic diversity
application of awards.
Mental health and well-being
The terms of reference of the remuneration committee are
available on the Company’s website.
Internal communications seek to ensure that staff are well
informed about the Company’s progress, through the use
Nomination committee
of regular digital newsletters, and staff liaison meetings, at
The committee meets at least annually and:
which employees’ views are discussed and taken into
reviews the board structure, size, diversity (including
account.
gender), composition and successional needs, keeping
under review the balance of membership between
All pub staff participate in bonus schemes related
executive and non-executive and the required blend
to sales, profits, stocks and service standards.
of skills, experience, knowledge and independence
on the board.
Approved by order of 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
Nigel Connor
meet the strategic needs of the business.
Company Secretary
6 October 2023
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
Number of
% of total
% of total
Shares of 2p each
Number
shareholders
shareholders
shares held
Up to 2,500 3,534 87.8
1,484,185 1.2
2,501–10,000 240 6.0
1,177,455 0.9
10,001–250,000 184 4.6
10,858,932 8.4
250,001–500,000 27 0.7
10,319,693 8.0
500,001–1,000,000 16 0.4
10,687,929 8.3
Over 1,000,000 23 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:
Number of
% of share
ordinary shares
capital
Tim Martin
29,548,779 23.0
Columbia Threadneedle Investments
7,102,605 5.5
FIL Investment International
6,519,967 5.1
MFS Investment Management
6,478,832 5.0
J D Wetherspoon plc Company Share Plan*
6,360,365 4.9
Artemis Investment Management LLP
5,600,320 4.3
Hargreaves Lansdown Asset Management LTD
5,225,961 4.1
Fidelity Investments
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 596p
Low 388p
High 816p
30 July 2023 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
J D WETHERSPOON PLC
ANNUAL REPORT AND FINANCIAL STATEMENTS 2023
83
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
ANNUAL REPORT AND FINANCIAL STATEMENTS 2023
84
GLOSSARY
J D Wetherspoon plc
Wetherspoon House, Central Park
Reeds Crescent, Watford, WD24 4WL
01923 477777
Jdwetherspoon.com
J D WETHERSPOON PLC
ANNUAL REPORT AND FINANCIAL STATEMENTS 2023
85