JD Wetherspoon founder and chairman Tim Martin has said its five bars in Ireland are performing above average, as the group announced lower first-half pretax profits.
Mr Martin, who established the pub chain in 1979, also repeated calls for the UK to leave the European Union. He said a "Brexit" would restore power to the national parliament and thereby increase the level of democracy and accountability.
His call came as the group reported pretax profits of £36 million (€46.1m) for the 26 weeks till January 24th, down 3.9 per cent on the £37.5 million recorded for the same period a year earlier.
Revenues were 6.2 per cent higher at £790.3 million, versus £744.4 million for the preceding year with operating profits down 10.8 per cent to £49.4 million, as against £55.4 million last year.
Irish operations
Speaking to The Irish Times, Mr Martin said plans to open up to 30 pubs in the Republic are continuing, although he added that rising property prices meant the pace of expansion had slowed.
“We’ve got five pubs going and another four that are awaiting planning permission. There are also a few other irons in the fire but the thing that’s working against us is the property market. I can see us having a dozen or so pubs within the next two years but rising property prices might affect this,” he said.
JD Wetherspoon currently operates five bars in Ireland: The Three Tun Tavern in Blackrock; The Forty Foot in Dun Laoghaire; The Great Wood in Blanchardstown; The Old Borough in Swords; and the Linen Weaver in Cork city.
Mr Martin said the group was very happy with the success of the bars it currently has in the Republic.
“The Irish bars are trading well with higher average sales compared to in the UK. We’ve built up a good team in Ireland and have received a great reception,” he said.
Like-for-like sales at JD Wetherspoon rose 2.9 per cent in the 26 weeks till January 24th, with total sales up 6.2 per cent to £790.3 million, compared to £744.4 million. Operating profit decreased by 10.8 per cent to £49.4million with the group reporting an operating margin of 6.3 per cent. The group said in the six weeks to 6th March, like-for-like sales increased by 3.7 per cent, with total sales up 5.7 per cent.
During the period under review, JD Wetherspoon opened five new pubs and sold two , bringing the number of pubs open to 954. It said it expected to open 15 new pubs overall in its new financial year.
Tax disparity
Mr Martin was highly critical of the tax disparity between pubs and supermarkets in the UK, which he said was unfairly impacting on business.
The main disparity relates to value added tax, with pubs having to pay 20 per cent on all food sales. Mr Martin said this allowed supermarkets to subsidise their alcoholic drinks prices.
“The tax disparity with supermarkets is unfair. Pubs create significantly more jobs and more taxes per pint or per meal than do supermarkets and it does not make social or economic sense for the UK tax regime to favour supermarkets,” said Mr Martin.
