Wether­spoon warns of mount­ing cost pres­sures as prof­its hit record high

The Scotsman - - Business - By SCOTT REID

Pubs gi­ant JD Wether­spoon’s prof­its hit record lev­els in the year to July, but the firm once again warned of ris­ing costs.

Chair­man and founder Tim Martin – who has been a prom­i­nent Brexit cam­paigner – de­scribed the cur­rent fi­nan­cial year as “rea­son­able”, with 5.5 per cent growth in like-for- like sales in the six weeks to 9 Septem­ber.

But he warned that higher run­ning costs could im­pact profit growth, say­ing: “The com­pany has had a rea­son­able start to the fi­nan­cial year, but taxes, labour and in­ter­est costs are ex­pected to be higher than those of last year, so we es­ti­mate that like-for-like sales growth of about 4 per cent will be re­quired for the com­pany to match last year’s record prof­its.”

Profit be­fore tax was up 4.3 per cent to £107.2 mil­lion in the full year while like-for­like sales rose 5 per cent in the 52 weeks to 29 July. Rev­enues were up 2 per cent to £1.69 bil­lion, mark­ing an­other record high.

Martin founded the chain in the late 1970s with a sin­gle pub in Muswell Hill, Lon­don. It now has 900-odd wa­ter­ing holes in­clude the Ca­ley Pic­ture House in Ed­in­burgh and Dun­fermline’s Guild­hall & Linen Ex­change.

The group main­tained its full-year div­i­dend at 12p.

Alas­dair Ron­ald, se­nior in­vest­ment manager at Brewin Dol­phin Scot­land, said: “There are few sur­prises in this set of re­sults from JD Wether­spoon.

“We con­tinue to have con­cerns over the com­pany’s abil­ity and will­ing­ness to pass on re­quired price in­creases to off­set in­put cost pres­sures.

“It has the low­est mar­gins of the large UK pub com­pa­nies and these cost pres­sures have a greater pro­por­tional im­pact on its prof­itabil­ity than they do its peers. The pub and restau­rant sec­tor is an in­cred­i­bly com­pet­i­tive en­vi­ron­ment.”

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