Wetherspoons sales and profits up but tax troubles lie ahead
JD Wetherspoon enjoyed a boost in profits last year, with operating profit up nearly 14 per cent and profit before tax up more than 20 per cent.
The pub chain also saw its revenue increase by 3.6 per cent to £830.4m and its like-for-like sales increase by 6 per cent.
Earnings per share were up more than 35.2 per cent to 45.7p, from 33.8p the previous year. The results meant that Wetherspoon was able to maintain its interim dividend at the same level as last year at 4.0p.
Why it’s interesting
Sales at Wetherspoon were even better than expected in the 12 weeks to 21 January, boosting the group’s profits.
Chairman Tim Martin warned that trading in the second half would be more difficult, but that the trading outcome for the full year would still be improved.
Martin warned that Wetherspoon faced higher costs in the second half, including labour costs, business rates and the sugar tax.
But a pro-Brexit Martin has also maintained that food prices will not rocket after Brexit, despite warnings from experts. He said the company’s results vindicated his Brexit stance.
What Wetherspoon said:
“There has been a huge debate, since the referendum, about the economic effects of Brexit.
“In particular, trade organisations like the CBI and the BRC, supported by the FT, the Sunday Times, the Guardian, the chairmen of Whitbread and Sainsbury’s and others, have misled the public by saying that food prices will automatically rise if we leave the EU without a deal.
“This is a fallacy – the EU is a protectionist organisation which imposes high taxes on food, clothing, wine and thousands of other items from non-EU countries – which comprise around 93% of the world’s population.
“In the six weeks to 11 March 2018, like-for-like sales increased by 3.8% and total sales increased by 2.6%.
“The company anticipates higher costs in the second half of the financial year, in areas including pay, taxes and utilities. In view of these additional costs, and our expectation that growth in like-for-like sales will be lower in the next six months, the company remains cautious about the second half of the year.
“Nevertheless, as a result of slightly better-than-expected year-to-date sales, we currently anticipate an unchanged trading outcome for the current financial year.
Read more: He’s at it again: Tim Martin has put more Brexit beer mats in Wetherspoons