Wetherspoon cheers rugby fans but warns on profits

Pubs giant JD Wetherspoon has warned that its profits could be hit by an increase in staffing costs.

Thirsty rugby fans lifted sales at JD Wetherspoon but it warned of a hit to profits from higher staff wages. Picture: Jane Barlow

The firm said higher hourly wages could see its annual results fall short of last year, when it delivered a pre-tax profit of £77.8 million.

Wetherspoon, which has 950 outlets, said like-for-like sales in the 13 weeks to 25 October were 2.4 per cent higher than the same period last year.

“Sales have been slightly higher in the last six weeks, which has coincided with the Rugby World Cup,” it added.

But the group said an increase in starting rates for staff paid by the hour saw operating margins in the first quarter of its financial year reduce to 6.2 per cent, down from 7.7 per cent a year earlier.

It plans to open about 15 pubs in the year, having added three and sold one since the end of July. It has offered 20 leasehold pubs for sale and is now considering a “small number” of freehold disposals.

Chairman and founder Tim Martin said: “It is difficult to quantify exactly the factors which will influence our trading performance in the early stages of a financial year.

“Increased labour costs are clearly an important factor for all pub and restaurant companies and may result in our annual profits being slightly lower than the last financial year.”