Wetherspoon raises pounds 22m

THE fast-expanding JD Wetherspoon pub group is raising pounds 22m to repay some debts and fund development, writes John Shepherd.

Wetherspoon's pub estate has grown from 44 when it floated on the stock market in October 1992 to 77 today.

It has become renowned for converting large disused sites such as banks into pubs, and for regularly selling at least one beer at less than pounds 1 a pint.

Plans are in place to convert another 14 sites into pubs. Ten are expected to be trading by the end of the financial year to July.

Fund-raising is via an underwritten one-for-four rights issue at 315p per share. Interim results were also announced, showing pre-tax profits up from pounds 1.5m to pounds 2.6m.

Sales rose from pounds 13.2m to pounds 20.6m. Wetherspoon is selling about 80,000 barrels, or 23 million pints of beer a year.

The dividend for the six months to end-January is being lifted 22 per cent to 2.2p. Wetherspoon's shares, floated at 160p, rose 7p to 390p on the announcement.

Gearing before the rights of 68 per cent will fall to 19 per cent of enlarged shareholders' funds of pounds 70m. About pounds 5m of short-term debt will be repaid by the cash call.