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Fri 13th Mar 2015 - JDW aims to triple breakfast and coffee sales within 18 months
JD Wetherspoon aims to triple coffee and breakfast sales in 18 months: JD Wetherspoon is to reduce coffee and breakfast prices with the aim of tripling sales in 18 months. The move comes as like-for-like sales growth slowed to 1.6% in the six weeks to 8 March. The company reported like-for-like sales grew 4.5% in the 26 weeks to 25 January 2015. Sales were up 9% to £744.4 and operating profit dropped 1.1% to £55.1m. Profit before tax and after exceptionals was up 4.1% to £37.5m. Chairman Tim Martin said: “The first half of the financial year resulted in a reasonable sales performance and free cash flow, although our profit was under pressure from areas which included increased competition from supermarkets and increased pay and bonuses for pub staff. As previously highlighted, the biggest danger to the pub industry is the continuing tax disparity between supermarkets and pubs. Thanks mainly to the work of Jacques Borel’s VAT Club, there is a growing realisation among politicians, the media and the public that pubs are overtaxed and that a level tax playing field will create more jobs and taxes for the country. In the six weeks to 8 March 2015, like-for-like sales increased by 1.6%, with total sales increasing by 5.6%. The company has successfully established a strong coffee and breakfast trade in recent years, selling approximately 50m Lavazza coffees and teas per annum and about 24m breakfasts – more breakfasts (according to research by CGA Peach) than are sold by Caffè Nero or Pret A Manger. We are increasing our efforts in this area by introducing more competitive prices from Wednesday 18 March. Lavazza filter coffee, with free refills, will be available at 99p or under, between 8am and 2pm daily, at approximately 880 pubs. We are also introducing more competitive prices for breakfasts. Our aim is to triple coffee and breakfast sales over the next 18 months. On the same date, we are introducing several drinks offers, reflecting greater supermarket competition, including Magners Cider (568ml) and Punk IPA (330ml) at £1.99, at approximately the same number of pubs. Marketing and labour costs may be higher than anticipated in the second half, as a result of the coffee and breakfast campaigns. The second half of the last financial year was strong, which will make it difficult to improve on that performance in the current year, although we expect a reasonable outcome for the full financial year, even so.” Martin added: “As previously highlighted, the company continues to try to upgrade as many areas of the business as possible. Current initiatives include investment in various IT and accounting systems, improved management of repairs and maintenance and improved training for pub and kitchen managers. We also allocated £15.3m (2014: £14.0m) in bonuses and free shares to employees, 98% of which was paid to those below board level and 83% of which was paid to those working in our pubs. As we have reported, the company has received a record number of recommendations in CAMRA’s Good Beer Guide 2015- more, we believe, than any other pub company. In this connection, 925 of our pubs have also achieved approval from Casque Marque, a brewery-run scheme which encourages high standards in ale quality. In addition, the number of pubs receiving the maximum hygiene rating, in respect of the local-authority-run scheme Scores on the Doors, continues to increase, with 784 pubs (out of 838 which have been officially rated) scoring five out of five – a higher percentage of maximum scores than any other substantial pub company.”

Revolution Bars Group sets 200p share float price: Revolution Bars Group has set a flotation price of 200p per share. This sets Revolution Bars Group’s total market capitalisation at the commencement of conditional dealings at £100m. Its Initial Public Offering comprises 42,984,234 shares, representing 86% of Revolution Bars Group’s 50,000,000 shares. Immediately following admission, Caspian Bidco Limited (the “Selling Shareholder”) will hold 4,999,999 shares, representing approximately 10% of the voting rights, and certain members of the company’s senior management team will (together) hold 2,015,767 shares, representing approximately 4% of the voting rights. The offer will raise total gross proceeds of £86 million for the selling shareholder. Conditional dealings in the shares will commence on the London Stock Exchange at 8.00am today. Chief executive Mark McQuater said: “We are excited to begin this next stage of Revolution Bars Group’s development. On behalf of the Board, I would like to thank all of our employees, customers and investors for their commitment to the Group. With their support, we believe we are ideally placed to proceed with our growth strategy and roll-out plans for Revolution and Revolución de Cuba.”

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