Wetherspoon eyes break even goal but warns over rising costs

Pubs giant JD Wetherspoon expects to break even this year after returning to profit in the third quarter, but flagged “considerable” pressures amid rising energy and staffing costs.

By Scott Reid
Wednesday, 4th May 2022, 10:39 am
Updated Wednesday, 4th May 2022, 10:39 am

The group – one of the UK’s biggest hospitality businesses with hundreds of pubs - said like-for-like sales in its third quarter to April 24 were 4 per cent below the same period in 2019 before the pandemic struck, but bounced back to stand slightly higher in the final two weeks.

It has returned to profit since March 13 and is hopeful of a further gradual improvement in sales over its final quarter.

Tim Martin, the group’s vocal founder and chairman, said: “The company anticipates a continuing slow improvement in sales, in the absence of further restrictions, and anticipates a ‘break-even’ outcome for profits in the current financial year.”

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But he added: “As many hospitality companies have indicated, there is considerable pressure on costs, especially in respect of labour, food and energy. Repairs are also running at a higher rate than before the pandemic.”

Sophie Lund-Yates, equity analyst at investment platform Hargreaves Lansdown, noted: “JD Wetherspoon is edging towards glass half full again. The bigger picture shows overall sales are still down on pre-pandemic levels, but zoom in and you can see that trading in more recent weeks has been marginally positive.

“This is an especially important development for the Spoons brand, thanks to its need to shift high volumes so it can support cheap price tags. Margin accretion is going to be very hard won, but Tim Martin’s business is hardly one to shy away from a challenge.”

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