Pub chain J D Wetherspoon said on Friday its sales growth has picked up since July, mainly thanks to sunny weather, but cautioned that good weather will not last as the industry contends with rising costs and closures.
The pub operator reported a 28 per cent drop in pretax profit for the year ended July and said it expects profit for its new fiscal year to July 2027 to be in line with market expectations at this early stage.
“Wetherspoon has made a good start to the financial year, although it is at least partially due to weather, which will inevitably revert to the norm,” said chairman Tim Martin. Like-for-like sales for the nine weeks to September 27th rose 8.6 per cent, an acceleration from the 3.2 per cent it reported in the same period a year ago.
Shares in the company rose over 7 per cent in early trade to a four-and-a-half-year high.
Wetherspoon had issued four profit warnings this year, citing high labour and energy costs and property taxes. Known for its cheap food and drink, the pub chain has held prices down to keep customers loyal, but that has squeezed its operating margin to 5.37 per cent from 6.88 per cent a year earlier.
The heatwave helped lift consumer spending, offering a respite for the hospitality sector as it contends with elevated costs and tight consumer budgets that have led to several pub closures this year.
The company reports in its results that its Irish pubs generated approximately €11.1 million of tax payments to the exchequer during the year, of which €5.9 million related to VAT, €2.6 million alcohol duty and €2.1 million employment taxes. That is down from €14 million the previous year.
Wetherspoon operates nine pubs in the Republic and another three in Northern Ireland. It also owns a hotel on Dublin’s Camden St.
The British Beer and Pub Association has called for a freeze on levies imposed on beers and an increase in discounts to 30 per cent on draught beer to improve profitability, in advance of UK chancellor John Healey’s budget on October 28th.
“The hospitality industry, as many commentators and companies have noted, has borne the brunt of government-led tax and regulatory cost increases, especially in the last two budgets,” Martin said. “It is to be hoped that the powers-that-be will refrain from any further increases.”
Wetherspoon’s pretax profit before separately disclosed items was £58.6 million (€68.7 million) compared with £81.4 million a year earlier.
British prime minister Andy Burnham said in July the government would lower business rates for pubs, clubs and live music venues by 20 per cent from April. – Reuters
