JD Wetherspoon sales shrug off wet weather but costs rise
- Sir Tim Martin said Wetherspoon was seeing a 'gradual recovery' in sales
JD Wetherspoon char Sir Tim Martin has said his pub group is seeing a 'gradual recovery' of profits and sales, despite rising labour costs.
The pub chain posted like-for-like sales growth of 5.8 per cent for the 10 weeks to 7 July, despite unseasonably wet weather, meaning revenues are up 7.7 per cent sicne the start of 2024 on a like-for-like basis.
Sir Tim total sales are at 'record levels', despite having fewer venues than it did a year ago.
He also renewed his calls for the government to equalise the tax paid on drinks between his pubs and supermarkets.
Upbeat: The chairman of JD Wetherspoon, Sir Tim Martin
Sir Tim said: 'The average Wetherspoon pub has generated taxes of one sort or another of £7million in the last 10 years, as well as generating considerable employment and social benefits.
'The last government failed to implement tax equality between pubs and supermarkets, leading to pub closures and underinvestment.
'Wetherspoon hopes that the current Chancellor, with a Bank of England pedigree, will understand how many beans make five, and rectify this inequality.'
Wetherspoon rationalises its estate
Wetherspoon has opened two pubs but sold or surrendered the lease on 26 sites since the start of the year, marking a net cash inflow of £8.7million as a result of the disposals.
A further 10 trading pubs are either on the market or under offer, the group said.
Wetherspoon, which currently has an estate of 801 pubs, said it has largely disposed of venues which are 'smaller and older', or where it has another site in close proximity.
At its peak, the pub firm had around 950 venues in 2015. Earlier this year, the group said it still hoped to meet long-term ambitions of growing to 1,000 venues despite shrinking the size of its estate.
Wetherspoon flagged new openings in Waterloo and Fulham Broadway stations in London, and in Marlow in Buckinghamshire planned for the coming months.
Net debt is expected to stand at approximately £670million at the end of the financial year.
The group said it continued to invest in areas such as beer gardens, staff rooms, above-bar glass racks and improved beer dispense systems.
Sir Tim, said: 'Sales per pub are approximately 21 per cent higher than pre-pandemic levels, which has helped to compensate for the very substantial increase in costs.
'For example, compared to the 2019 financial year, labour in this financial year has increased by approximately £164million, energy by £28million, repairs (also affected by labour costs) by £38million and interest (excluding IFRS 16 interest) by £16million.'
Wetherspoon shares edged down 0.26 per cent or 2.00p to 766.50p on Wednesday, having risen over 16 per cent in the last year.
Russ Mould, investment director at AJ Bell, said: 'Pubs chain Wetherspoons used to be all about volume of sales and not margins. That left the company exposed to increases in costs coming out of the pandemic.
'It is now delivering record sales from a streamlined trading estate and with debt under control the company expects to deliver results in line with forecasts.
'In a hospitality market which has seen a large number of venues disappear in recent years, Wetherspoons has an opportunity to further entrench its market position and it is investing in areas like beer gardens which could broaden the range of customers it might attract.'
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