JD Wetherspoon has released its Interim Management Statement.
Current trading
In the first quarter (13 weeks to 28 October 2012), like-for-like sales increased by 7.1% and total sales increased by 11.1%, helped by a strong performance during the Olympics and Paralympic games. They do not expect this level of sales growth to be sustained for the rest of the financial year.
The operating margin was 8.6%, approximately 0.4% lower than the last financial year, due to increases in costs in areas such as tax, utilities, labour and bar and food supplies, combined with increased marketing costs.
New pubs
Two new pubs were opened in the period, and there are a further 8 pubs in development, with about 25 pubs expected to open in the current financial year.
Outlook
JD Wetherspoon regard the main challenges for the pub industry to be the VAT disparity between supermarkets and pubs, combined with the continuing imposition of stealth taxes (applying to pubs but not supermarkets) such as the late-night levy and the increase in fruit/slot machine taxes.
In spite of these challenges, JD Wetherspoon sales, profit and cash flow remain resilient and the board ‘continues to aim for a reasonable outcome in the current financial year.’