Downsized Wetherspoons cheers solid sales performance

Wetherspoon has 900-odd watering holes include the Caley Picture House in Edinburgh. Picture: Contributed

Releasing a trading update to the stock market, the group said like-for-like sales in the ten weeks to 7 July were up 6.9 per cent, consistent with growth in the year to date of 6.7 per cent.

Total sales, which factor in pub openings and closures, rose 6.6 per cent in recent weeks and 7.4 per cent in the year so far.

Chairman and founder Tim Martin – who has been a prominent Brexit campaigner – said the company’s expectations for full-year performance remain unchanged.

He also reiterated his calls for the UK government to adopt a no-deal exit from the European Union, labelling it a “multi-deal” approach.

“The main issue for shareholders, which dominates debate, relates to the nature of the UK’s post-Brexit relationship with the EU,” noted Martin, who founded the chain in the late 1970s with a single pub in Muswell Hill, London.

“The dichotomy between a ‘no-deal’ Brexit and a ‘deal’, as it is often portrayed in the media, politics and business, is highly misleading.

“The term no-deal really means ‘multi-deal’ – a multitude of deals agreed between individuals, businesses, governments and other organisations.

“In contrast the term ‘deal’ refers to a ‘mono-deal’ – a single overarching agreement, which aims to govern the entire relationship between the UK and the EU.

“A complex and overarching mono-deal, agreed under duress, is unnecessary and counterproductive. It would reduce the flexibility of UK businesses and Parliament in the future. The multi-deal approach is simpler, safer and will yield immediate dividends.”

In the year to date, there have been five pub openings offset by nine disposals. No further openings are expected in the current financial year.

The group expects some £3m of exceptional, non-cash losses in the financial year, after some of the disposals came under balance sheet value. It has also invested £71m in buying up freeholds for its pubs.

Wetherspoon, which has 900-odd watering holes include the Caley Picture House in Edinburgh and Dunfermline’s Guildhall & Linen Exchange, told investors: “The company remains in a sound financial position.”

Alasdair Ronald of Brewin Dolphin noted: “JD Wetherspoon’s continuing growth in sales highlights the success of its ‘stack ‘em high, sell ‘em cheap’ approach – particularly against a weak economic backdrop.

“However, the business model is staff-intensive and relies on the marginal visitor to drive profitability.”