JD Wetherspoon sales increase, profits forecast remains weak
The British pub chain has recorded strong sales growth in its second quarter of trading, but the company still expects its pre-tax profits to be lower as input costs continue to increase.
JD Wetherspoon has seen like-for-like sales increase 7.2% and total sales rise by 8.3% in its second quarter of trading, but its profit forecast is down due to a steady increase in input costs, the company said.
The British pub chain remains in a strong financial position, with net debt at the end of this fiscal year expected to be around £10 million higher than the that of last year, according to its latest trading update.
‘Sales growth has been strong since our last update,’ JD Wetherspoon Chairman Tim Martin said. ‘Costs, as previously indicated, are considerably higher than the previous year, especially labour, which has increased by about £30 million in the period, but also in other areas, including interest, utilities, repairs and depreciation.’
‘Profit before tax in the first half is expected to be lower than the same period last year. Our expectations for the full year are unchanged,’ he added.
Weatherspoon to benefit from Brexit
JD Wetherspoon's Chairman is a proponent of Brexit and used the company’s recent trading update to advocate that Britain and his business stand to benefit from the UK leaving the EU without a deal.
Not only does will a no-deal Brexit mean that the UK will avoid paying a £39 billion divorce bill to Brussels, but Britain will also benefit from a free-trade approach by avoiding a deal, he said.
‘This approach also means that the UK, without the agreement of the EU, can end some or all of the protectionist tariffs and quotas that apply on non-EU imports, including rice, oranges, bananas, coffee, wine, children’s clothes and over 12,000 other products - many of which are not produced in this country,’ Martin said.
‘Ending tariffs reduces prices for consumers, without loss of government income, since the proceeds are currently remitted to Brussels,’ he added.
‘A good example of the EU’s protectionism, which is denied by many people, is the recent imposition of tariffs on Cambodian rice, which will inevitably increase prices for businesses and consumers.’
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