PUB CHAIN JD Wetherspoon has seen its sales growth wilt as World Cup fans shunned its bars in favour of those screening games.
The firm today reported a slowdown in underlying sales growth in the last ten weeks of trading. Takings were up by just 4.9 per cent compared with the 6.2 per cent increase reported in May.
While many Wetherspoon outlets have been showing matches during the World Cup tournament in Brazil, the firm admitted it does not brand itself as a sports pub operator.
The group, which said sales during the event were “slightly weaker”, banned TVs from its outlets for many years and even now usually has them on with the sound turned down.
In a trading update, the firm said that although sales have slowed in recent weeks, it remains “confident of a reasonable outcome” in the current financial year. It is due to post its full-year results on 12 September,
Headed by founder and chairman Tim Martin, pictured, Wetherspoon has grown to operate more than 900 pubs on demand for real ales and food-driven promotions like curry clubs and “beer and a burger” specials.
In the UK, the business has opened 45 pubs in the current financial year to the end of July, to be followed by between 30 and 40 in the next year.
Analysts at brokerage Shore Capital trimmed their 2014 forecast for the group by £500,000 due to margin concerns and expect it to report a pre-tax profit of £77.6 million.
Fellow broker Investec Securities reiterated its “buy” rating on the shares, saying it was “comfortable” with its 2014 earnings forecast.
Analyst Andrew Fitchie said: “JD Wetherspoon’s pre-close statement held no surprises. Recent trading has continued in line with the year to date, albeit the World Cup has taken the shine off the last few weeks.”
The group, whose Scottish watering holes include the Standing Order in Edinburgh and Glasgow’s Counting House, noted that its operating margin came in at 8.1 per cent and that for the next financial year it expected the figure to be in the region of 7.7 per cent to 8.1 per cent.
Meanwhile, the company is to cut the opening times of its outlets at the weekends in response to late-night levies being introduced by local councils south of the Border.
It said the levy, which can be imposed by local authorities on licensed premises after midnight, is an unfair tax burden on publicans.
Martin, who founded the company in 1979, said “almost all” of the firm’s pubs open until 1am on Fridays and Saturdays, but they will now close early in areas where the levy is introduced. The levy, designed to pay for late-night policing, ranges between £299 and £4,400 a year depending on the value of the property.