JD Wetherspoon drinks up extra profits

07-09-2007

JD Wetherspoon drinks up extra profits
Pub chain JD Wetherspoon has reported a six per cent rise in annual pre-tax profits, but remains cautious about its trading outlook in the wake of the recently introduced smoking ban.

In a statement today the company revealed that its pre-tax profits for the 52 weeks to July 29th climbed to £62 million, up from £58.39 million in the previous year.

Like-for-like sales also grew by 5.6 per cent over the period, while the group's total sales for the year climbed by five per cent – up to £888.5 million.

However despite Wetherspoon also reporting a slight improvement to its operating margin, a key measure of profitability, the company said that its outlook for like-for-like sales for the current year remained uncertain given the unknown impact the smoking ban will have on its performance.

The smoking ban in England was introduced on July 1st, following a similar ban introduced in Scotland last year. A ban is also in operation in Wales.

Commenting on the company's trading prospects, J D Wetherspoon chairman Tim Martin said: "Given the smoking bans and our experience in Scotland, our outlook for like-for-like sales for the 2008 financial year remains cautious, as it involves more uncertainty than usual, although we have no doubt that this legislation will be to the long-term benefit of the licensed trade."

Meanwhile, Wetherspoon revealed that its like-for-like sales in August had been boosted by a strong trade in food, which had offset a fall in beer sales.

The pub chain, which is launching a new menu in October, says that food now accounts for more than 30 per cent of its sales – up from 17 per cent a decade ago.

Wetherspoon, which opened 18 pubs last year to bring its total to 671, said that intends to open around 30 additional outlets in the year to July 2008.


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