Wetherspoon profits to take knock as costs continue to spiral
Boss Tim Martin said Britain should quit the EU because of tariffs on Cambodian rice.
Profits at JD Wetherspoon are to come in lower in the first half of the year after the firm was stung by a rise in costs, taking the shine off a stellar rise in sales.
The pubs chain said in a trading update that in the first 12 weeks of the second quarter to January 20, like-for-like sales increased by 7.2% and total sales by 8.3%. In the half year, comparable increased by 6.3% and total sales by 7.2%.
However, costs have rocketed, especially labour, which has increased by about £30 million in the period.
Sales growth has been strong since our last update Tim Martin, Wetherspoon chairman
Wetherspoon said that pre-tax profit in the first half is expected to be lower than last year’s £62 million.
Chairman Tim Martin said: “Sales growth has been strong since our last update.
“Costs, as previously indicated, are considerably higher than the previous year, especially labour, which has increased by about £30 million in the period, but also in other areas, including interest, utilities, repairs and depreciation.
“Profit before tax in the first half is expected to be lower than the same period last year. Our expectations for the full year are unchanged.”
The company has opened two new pubs in the first half and has closed or sold six.
It guided new openings of between five and 10 pubs in the current financial year.
Brexit-backing Mr Martin also used the update to wade into politics, arguing that one of the reasons Britain should quit the EU is because of tariffs the bloc has imposed on Cambodian rice.