In the 26 weeks ended 25 January 2015, like-for-like sales increased by 4.5%, with total sales increasing by 9.0% to £744.4m (2014: £683.2m). Like-for-like bar sales increased by 1.5% (2014: 3.4%), food by 10.1% (2014: 10.5%) and fruit/slot machines by 1.1% (2014: decreased by 9.5%).
Operating profit decreased by 1.1% to £55.1m (2014: £55.7m). The operating margin was 7.4% (2014: 8.2%). Profit before tax and exceptional items decreased by 0.9% to £37.5m (2014: £37.8m), owing mainly to a slightly lower gross margin, higher rates of pay for pub staff and higher utility costs. There were no exceptional items this year, so profit increased by 4.1%, compared with last year'spost-exceptional profit of £36.0m.
Diluted earnings per share, before exceptional items, increased by 2.3% to 22.6p (2014: 22.1p), helped by a slightly lower corporation tax rate and a slightly lower number of shares in issue. Diluted earnings per share after exceptional items increased by 9.2% to 22.6p (2014: 20.7p).
As illustrated in the table in the tax section below, the company paid taxes of £305.3m in the period under review, compared with £290.7m in the same period last year.
Net interest was covered 3.1 times by operating profit (2014: 3.1 times, before exceptional items). Total capital investment was £93.8m in the period (2014: £82.7m), with £72.4m spent on freehold reversions of properties where Wetherspoon was the tenant and new pub openings (2014: £58.0m). In addition,£21.4m was spent on existing pubs (2014: £24.7m).
There were no exceptional items (2014:a charge of £1.8m which related to interest due to HMRC, following the 'Rank' High Court decision of October 2013, in respect of gaming machines).
Free cash flow, after capital investment of £21.4m on existing pubs and payments of tax and interest, increased to £44.9m (2014: £42.6m). Free cash flow per share was 36.5p (2014: 33.8p).
Dividends
The board declared an interim dividend of 4.0p per share for the current interim financial period ending 25 January 2015 (2014: 4.0p per share). The interim dividend will be paid on 28 May 2015 to those shareholders on the register at 1 May 2015. The dividend was covered 5.9 times by profit (2014: 5.2 times).
