JD Wetherspoon Records Impressive Sales Despite Rise in Taxes

Posted on 18 September, 2012 by MOVEHUT

In May we reported that JD Wetherspoon was contradicting a trend in the pub industry that despite many pubs closing, the pub chain was in fact expanding.

But it seems their success didn’t stop there as the company have just announced “record sales, profit and earnings per share before exceptional items.”

From 24 July 2011 – 29 July 2012 revenue in commercial properties equated to £1,197.1 million in revenue, which was up 11.7 per cent, when compared to the 2010/11. Like-for-like sales were up by 3.2 per cent and free cash flow increased by 16.1 per cent to £91.5 million.

After exceptional items that were removed from the equation, operating profit was up by 4.9 per cent to £107.3 million and earnings per share increased by 17 per cent to 41.3 pence.

The exceptional items included:

  • Damage to commercial properties (£7.8 million)
  • Difficult leases (£2.2 million)
  • IT write-off (£1.7 million)
  • A loss of commercial properties and equipment (£1.1 million)
  • Restructuring costs (£0.6 million).

In addition to exceptional items, the pub industry has also been hit by an increase in VAT and taxes, which is what makes these results even more of a surprise.

Speaking of the successful year, Tim Martin, Chairman of the pub chain, said: “The biggest dangers to the pub industry, are the VAT disparity between supermarkets and pubs, combined with the continuing imposition of stealth taxes, such as the late-night levy and the increase in fruit/slot machine taxes.

“Sales this summer have been enhanced by a number of one-off events and we do not expect to sustain this level of growth. As previously indicated, it is anticipated that taxation and input costs will continue to rise. Overall therefore, the company is aiming for a reasonable outcome, in the current financial year.”

But it seems the next interim statement which will be published on 8 November is already looking promising, thanks to the Olympics.

Tim said: “In the six weeks to 9 September 2012, like-for-like sales increased by 8.4%, with total sales increasing by 12.8%, helped by a strong performance during the Olympic and Paralympic Games.”

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