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Wetherspoon's shares are up after sales outstripped expectations

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Sales at JD Wetherspoon pubs were even better than expected in the 12 weeks to 21 January, boosting the group's profits.

Chairman Tim Martin warned that trading in the second half would be more difficult, but that the trading outcome for the full year would still be improved.

The figures

Like-for-like sales jumped six per cent in the second quarter, while total sales were up 4.3 per cent.

This matched performance in the first quarter, meaning like-for-like sales growth for the year to date also stands at six per cent.

As a result of the better-than-expected sales, underlying pre-tax profits for the year so far are now ahead of the company's expectations.

Shares jumped more than six per cent in early trading.

Read more: Wetherspoon boss and CBI trade blows in no deal Brexit spat

Why it's interesting

Results from Wetherspoon today contrast with yesterday's update from Marston's, which included a £1m hit to profits due to adverse weather.

Analysts at Liberum said that Wetherspoon had dodged the impact of the snow due to its large town centre locations.

In the near term, founder and chair Tim Martin said Wetherspoon faced higher costs in the second half, including labour costs, business rates and the sugar tax.

"There will also be some uncertainty as to the effects on our business of the FIFA World Cup," he said.

Wetherspoon has previously experienced a dip in trading during World Cup summers due to its reluctance to put TV football in pubs.

Martin also argued again today that food prices will not rocket after Brexit, despite warnings from experts.

He took aim at the CBI, BRC, and the chairmen of Whitbread and Sainsbury's for suggesting a no-deal Brexit would result in higher food prices.

"If this misleading information were true, it could have a damaging effect on Wetherspoon, similar businesses and the public - but it is not," said Martin.

Read more: Tim Martin: Wetherspoon's is "ready to leave the EU"

What JD Wetherspoon said

Tim Martin said:

"As regards Wetherspoon's performance, sales in the second quarter to date matched the strong growth of the first quarter. In the second half of the year, sales comparatives will be more difficult.

"We face significant costs in the second half in areas which include labour, business rates and the sugar tax. There will also be some uncertainty as to the effects on our business of the FIFA World Cup.

"Nevertheless, given better-than-expected year-to-date sales, we currently anticipate a slightly improved trading outcome for this financial year."

 


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