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Wetherspoon (JD) plc First Quarter Trading Update Conference Call - Final.

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Original Source: FD (FAIR DISCLOSURE) WIRE

OPERATOR: Good morning, ladies and gentlemen, and welcome to the JD Wetherspoon interim management statement conference call hosted by John Hutson. My name is Clementine and I will be your coordinator for today's conference. For the duration of the call you will be on listen-only. However, at the end of the call, you will have the opportunity to ask questions. (OPERATOR INSTRUCTIONS).

I am now handing you over to John Hutson to begin today's conference.

JOHN HUTSON, CEO, WETHERSPOON (JD) PLC: Good morning everybody. This is our first interim management statement that we've made under new FSA disclosure rules, although we've been providing quarterly trading updates for some time. It's also the first time we've held a conference call, so please bear that in mind. Hopefully, you've all had a chance to read the statement and I'll take a few questions in a moment but in advance of that I've just got a few opening remarks. And I think the first of those is to -- is that last year, the same corresponding period last year, we had like-for-like sales of plus 9.2% so in terms of all the comparisons for the quarter this year that was the toughest.

Also, in the previous quarter to this one, May to July of this year, like-for-like sales in that quarter were plus 4.4%. So, in our view, the most significant change really has been the introduction of the smoking bank in England on July 1. We think we're managing the transition well and we believe, and from what we can tell, are doing at least as well as anybody else at the moment. Of course, it's difficult to be too categorical in that regard.

Sales have reacted generally as we expected with strong food sales growth and a decline in bar sales. This is broadly the experience we saw in Scotland. We're being proactive in managing the transition but, as we said before, there is a degree of uncertainty in predicting like-for-like sales for the year as a whole, certainly at this point, and that is why we continue to take a cautious view at this stage on the outcome of sales and profits for the financial year as a whole.

Okay. I'll hand back to the operator now who's going to help coordinate any questions that you've got. Thank you.

It should have gone back to the operator.

OPERATOR: Thank you. (OPERATOR INSTRUCTIONS). The first question comes from the line of Ian Rennardson. Please go ahead.

IAN RENNARDSON, ANALYST, MERRILL LYNCH: Morning. It's Ian Rennardson at Merrill Lynch. I wonder if you could just give us that split of like-for-likes between wet sales, food sales, and machine sales please.

JOHN HUTSON: We're not going to break them out for the trading statement because I think we've been told if we do that then we've got to do it every month from now on but what we've seen is the continued strong growth in foods. They remain double-digit positive. But the decline in bar sales is a bit sharper, although it's still single-digit, and machine sales have broadly followed bar sales.

IAN RENNARDSON: Okay. Thank you.

OPERATOR: Thank you. The next question comes from the line of Vaughan Lewis. Please go ahead.

VAUGHAN LEWIS, ANALYST, MORGAN STANLEY: Hi there. Could you give us an indication about what the actual operating margins are this year or what they were last year and whether they were in line with the first half or a bit higher because of the strong trading?

JOHN HUTSON: Last year we had operating margin for the year as a whole, it's about 10.3% I think, although I can check that for you, but in the first half last year the operating margin was 10.6%, and then it fell to 10.3% in the second half. And a lot of the reason for that was the change in the utilities cost which came in in October of last year. So one of the things that is not quite in the comparisons yet is the fact that utilities costs have come back down again this year so from October 1 of this year until the end of the financial year we expect to save GBP5 million as compared to last year but, obviously, that saving has only just started. So that's part of the story of the operating margin for change first half to second half last year and a little bit this year.

VAUGHAN LEWIS: So if that's clear then the...