ClickAJob News

Pub chain JD Wetherspoon has blamed the smoking ban for a 13 per cent drop in first half profits to £28.5 million as bar sales declined.

Food sales were stronger, however, and food and drinks with meals now make up 60 per cent of the company's trade, Wetherspoon said.

The company's turnover was up 0.4 per cent to £440.2 million, but the operating margin declined by 0.5 per cent to 10.1 per cent.

Chairman Tim Martin said: "The half year to 27 January 2008 was a challenging period for the company, and for the pub trade generally, since it followed smoking bans in England, Wales and Northern Ireland in the second half of the last financial year.

"As anticipated, the introduction of the bans resulted in a strong growth in food sales but a decline in bar sales, which put pressure on margins and profits."

Mr Martin added second-half sales trends would be broadly similar to those of the second quarter, with the firm experiencing cost pressures, leading to a more cautious outlook for the second half.

The smoking ban, combined with a downturn in consumer confidence, has hit industry profits as a whole.

Greene King, a rival pub operator, recently described the trading environment as "challenging", while Punch Taverns recorded a decline in like-for-like outlet profit of 0.8 per cent in the 20 weeks to January 5th.

However, the 24-hour licensing laws, introduced three years ago, have benefited Wetherspoon.

Now it is open for breakfast, the pubs are selling 514,000 coffees and teas per week, an increase of around 12 per cent compared to last year.