Pubs giant JD Wetherspoon has cheered a hike in sales as drinkers shrugged off Brexit uncertainty but its profits were hit by rising costs.
The group, which has more than 900 pubs across the UK and Ireland, reported a 4.5 per cent fall in underlying pre-tax profits to £102.5 million for the 52 weeks to 28 July.
The result was impacted by property costs, as well as an increased wage bill and a programme to refurbish and open new outlets.
On a statutory basis, however, pre-tax profits rose 7.2 per cent to £95.4m.
The chain, whose watering holes include the Caley Picture House in Edinburgh and Dunfermline’s Guildhall & Linen Exchange, saw like-for-like sales increase 6.8 per cent and said trading had held up since the year-end, with comparable sales up 5.9 per cent in the six weeks to 8 September.
The full-year dividend was maintained at 12p per share.
Chairman and founder Tim Martin – who has been a prominent Brexit campaigner – said: “Wetherspoon continues to perform well. We currently anticipate a reasonable outcome for the current financial year, subject to our future sales performance.”
But Martin also hit out at the “elite Remainers” for ignoring the long-term benefits of Brexit. The group trimmed 20p off the cost of a pint of beer last week in hundreds of its pubs, calling it an example of how leaving the customs union with the EU can reduce prices.
Martin, who founded the chain in the late 1970s with a single pub in Muswell Hill, London, said leaving the customs union on 31 October would allow the UK government to end “protectionist tariffs”, which he maintained would reduce prices in pubs and supermarkets.
It is the latest Brexit-related move by Wetherspoon, which has shown its commitment to leaving the EU by selling more British beers and wines over European brands.
Martin added: “Elite Remainers are ignoring the ‘big picture’, regarding lower input costs and more democracy, and are mistakenly concentrating on assumed short-term problems, such as potential delays at Channel ports – which are easier to extrapolate on their computer models.”
Greg Johnson, an analyst at brokerage Shore Capital, noted: “Although, JDW continues to deliver on the top-line, with like-for-like sales ahead by a staggering 6.8 per cent, albeit the contribution from net new units is modest (+0.6 per cent), conversion to the bottom line remains difficult with operating margins down 70bps in the year to 7.3 per cent.
“For balance, the operating margin was negatively impacted by higher repair and maintenance in the year and was modestly up H2 over H1, although the improvement was below our expectations, especially given the strength in sales.”