JD Wetherspoon posted a strong rise in profits for the six months to the end of January, but warned of a tough year ahead as a result of higher anticipated costs.
The pub chain on Friday said that profits before tax in the 26 weeks to 28 January were £62m, representing a 20.6 per cent rise from the £51.4m recorded during the same period last year. Revenues rose by 3.6 per cent to £830.4m while earnings per share jumped by more than 35 per cent to 45.7p.
But chairman Tim Martin struck a cautious tone about the months ahead.
“The company anticipates higher costs in the second half of the financial year, in areas including pay, taxes and utilities,” he said. “In view of these additional costs, and our expectation that growth in like-for-like sales will be lower in the next six months, the company remains cautious about the second half of the year,” he added.
As has become custom for Mr Martin, a vocal Brexiteer, he also used Friday’s trading statement to reiterate his views on the UK’s planned departure from the EU. He described predictions that Brexit would inevitably lead to a rise in food prices “a fallacy” and said that if international imports of certain items were to become more expensive for his pub chain, he would simply switch to local alternatives.
“Most economists who criticise Brexit use hypothetical arguments, but, in the real world, the UK can eliminate import taxes, improving living standards and simplifying the Byzantine tax system – both of these factors will improve the outlook for consumers and businesses in the UK,” he said.
Like high street retailers, pubs across the UK have in recent months been battling an increase in business rates, a hike in minimum wages and inflation hitting a multi-year high. Last month real estate adviser Altus Group published research showing that two pubs a day had shut their doors since April 2017.
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