Record profits at Wetherspoon’s but chairman warns over costs

PUB GROUP JD Wetherspoon’s profits rose to record levels in the year to July, but the business warned it would need to maintain sales momentum to keep up with rising costs.

Profit before tax was up 4.3 per cent to £107.2m, the group’s highest profit in its 39year history.

Like-for-like sales, which exclude new pubs, rose 5 per cent in the 52 weeks to July 29. Revenue climbed 2 per cent to £1.69bn, another all-time high.

Chairman Tim Martin, said the current financial year had been “reasonable”, with 5.5 per cent growth in like-for-like sales in the six weeks to September 9. But he warned higher running costs could threaten 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 likefor-like sales growth of about 4 per cent will be required for the company to match last year’s record profits.”

Emma-Lou Montgomery, associate director at Fidelity Personal Investing’s share dealing service, said Martin’s comments touched on “the very real pressure facing pubs today”.

“Claiming 50 per cent of beer sales have been lost to supermarkets in the last 35 years, his calls for tax equality, with government treating pubs as ‘leniently’ as supermarkets when it comes to tax, looks much needed,” she said.

Trade bodies and campaign groups including the Campaign for Real Ale (Camra), Wine and Spirits Trade Association (WSTA) and UK Hospitality have urged the Chancellor to freeze alcohol duty for a second year in a row to lessen the tax burden on pubs.

JD Wetherspoon maintained its full year dividend at 12p.