
ACCOUNTING POLICIES SECTION 2
Authorisation of financial statements and statement of
The Company has also performed a ‘reverse stress case’
compliance with IFRSs
which shows that the Company could withstand a 12%
The financial statements of J D Wetherspoon plc
reduction in sales from those assessed in the ‘base case’
(the ‘Company’) for the 52 weeks ended 30 July 2023
throughout the going concern period, as well as costs
were authorised for issue by the board of directors on
assumed to increase at a similar level to the downside
6 October 2023, and the balance sheet was signed
scenario,
on the board’s behalf by John Hutson and Ben Whitley.
before the covenant levels would be exceeded towards the
end of the period. The directors consider this scenario to
J D Wetherspoon plc is a public limited company,
be remote as, other than when the business was closed
incorporated and domiciled in England and Wales.
during the pandemic, it has
The Company’s ordinary shares are traded on the
never seen sales decline at anywhere close to that rate.
London Stock Exchange.
Furthermore the Company could take additional mitigating
actions, in such a scenario, to prevent any covenant
Basis of preparation
breach.
The Company’s financial statements have been prepared
in accordance with the UK-adopted international
The directors have determined that, over the period of the
accounting standards and have been prepared in
going concern assessment, there is not expected to be a
accordance with the requirements of the Companies Act
significant impact resulting from climate change.
2006.
Following the cessation of a period of lender-agreed
The financial statements have been prepared on the
relaxed covenants to 30 July 2023, the Company has
going-concern basis, using the historical cost convention,
reverted to its original covenant targets and the Company
except for the revaluation of financial instruments.
is confident that these targets will be met in the going
concern assessment period.
The principal accounting policies adopted by the Company
are set out on pages 41-46. The accounting policies which
As set out in Note 20, the secured Revolving Credit Facility
follow set out those policies which apply in preparing the
totalling £875 million of which £630 million was drawn at
financial statements for the year ended 30 July 2023.
30 July 2023, matures in February 2024 (£20 million) and
February 2025 (£855 million).
These policies have been consistently applied to all of the
years presented, unless otherwise stated.
As the directors believe that the positive trading and cash
flow trends which have been experienced in the period to
Going concern
30 July 2023 will continue, coupled with increasing
The directors have made enquiries into the adequacy of
certainty over cost inflation, the Company has chosen not
the Company’s financial resources, through a review of the
to formally commence any refinancing exercise as at the
Company’s budget and medium-term financial plan,
date of these accounts.
including capital expenditure plans and cash flow
forecasts. In line with accounting standards, the going
Given the Company’s strong financial position and current
concern assessment period is the 12-months from the date
trading performance, the directors are
of approval of these accounts (approximately the end of
confident that the Company will be able to refinance its
quarter 1 of FY25). Given the proximity to the going
debt facilities when it is required to do so. The Company
concern review period, the Company has also considered
has had frequent conversations to date with its
the February 2025 expiry of its current revolving credit
longstanding lending syndicate and advisors.
facility in its assessment.
These discussions have highlighted multiple refinancing
options and very good levels of support. These factors,
The Company has modelled a ‘base case’ forecast in
combined with the alternative liquidity options available to
which recent momentum of sales, profit and cash flow
the Company, provide the Directors
growth is sustained. The Company has anticipated within
with appropriate assurance that the prospect of not being
this forecast continued high levels of inflation, particularly
able to refinance is remote and as such
on wages, utility costs and repairs. The base case
no material uncertainty exists.
scenario indicates that the Company will have sufficient
resources to continue to settle its debts as they fall due
After due consideration of the matters set out above,
and operate within its leverage covenants for the going
the directors have satisfied themselves that the Company
concern assessment period.
will continue in operational existence for the foreseeable
future. For this reason, the Company continues to adopt
A more cautious but plausible scenario has been analysed,
the going-concern basis in preparing its financial
in which sales for FY24 are in line with
statements.
FY23 (ie no sales growth). The Company has reviewed,
and is satisfied with, the mitigating actions
Important judgements
that it could take if such an outcome were to occur. Such
The key judgements made in preparing the financial
actions could include reducing discretionary
statements are detailed below.
capital expenditure, reducing costs or implementing price
increases. Under this scenario, the Company
Hedging
would still have sufficient resources to settle liabilities as
As set out in note 22, the Company previously hedge
they fall due and sensible headroom on its covenants
accounted for interest-rate swaps if it met the specified
through the duration of the going concern review period.
qualifying criteria outlined by IFRS 9. On 14 October 2022,
J D WETHERSPOON PLC
ANNUAL REPORT AND FINANCIAL STATEMENTS 2023