The chairman of JD Wetherspoon predicted yesterday that pub and restaurant operators would have to raise prices by up to 5 per cent to counter the impact of “the pernicious combination of increasing taxes and regulation”.
Tim Martin, also the pub chain’s founder, said: “Paying £10 of tax for every £1 of profit made is unsustainable. Our average pub pays £10,000 of tax a week of one type or another. I think I definitely deserve a knighthood, though I’d probably turn it down.”
Wetherspoons reported an 11 per cent fall in interim pre-tax profits to £32.2 million, due mainly to extra interest charges after a refinancing. Its operating margin also fell, from 10 per cent to 9.4 per cent, amid higher taxes and rising costs for labour, utilities and food and drink.
Operating profits rose 1.4 per cent to £49.6 million, with revenues up 7.6 per cent to £525.4 million. Like-for-like sales increased by 2.3 per cent, and that has improved to 2.8 per cent in the past six weeks.The interim dividend is 4p, down from 19p, although last year’s payout included a special dividend of 7p.
Asked if the recent board upheaval — the abrupt exit of its finance director and chief operating officer — had settled down, Mr Martin said: “The dogs have barked and the caravan has moved on.”
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The group confirmed that Kirk Davis, acting finance director since the departure last October of Keith Down, had been given the role full-time.
Mr Martin said that Wetherspoons would be stepping up refurbishments, spending £35 million this year. “The average age of our pubs is 11 to 12 years and a lot of loos, computers and the like need updating. You need to upgrade in these competitive markets.”
The company will spend another £75 million opening 50 new pubs this year, taking its total to about 820.