UK-based pub chain JD Wetherspoon has followed up its better-than-expected financial year report with an equally optimistic update for the first quarter of the new trading season.
Like-for-like sales increased by 6.1% and total sales by 4.3% for the 13 weeks to 29 October 2017. The underlying operating margin, excluding property gains, was 8.6%, although one-off items increased that number in the quarter.
The company, which has opened two new pubs since the start of the financial year and has sold six, intends to open between 10 and 15 pubs in the current financial year.
Whilst JD Wetherspoon has managed to secure bumper sales for the 13-week period, the company acknowledges the potential impact a Brexit deal may have on trading and expenditure.
The chairman of Wetherspoon, Tim Martin, said: “A key issue for investors and the public is the impact of Brexit on the economy. In this connection, statements have been made by some senior PLC directors and trade organisations which are factually incorrect and highly misleading.
“The misinformation from directors and trade organisations seems to be designed to support the view that staying in the EU for an additional two years is necessary to avoid a ‘cliff edge’. There is no cliff edge. Wetherspoon, for example, is ready now to leave the EU, since almost no preparation is required – as is almost certain.”
At the beginning of the year JD Wetherspoon revealed a 0.7% rise in total sales, with like-for like sales increasing by 3.2% for the three months to January 2017, and predicted its operating margin for the half year ending 22 January 2017 to be around 8.0%, 1.7% higher than the same period last year.
The chairman concluded: “Although it is only a short period, the company has had a positive start to the year. Sales have continued at a slightly higher-than-expected level since we last reported on 15 September. Costs, as many pub and restaurant companies have indicated, have been significantly higher than last year, and further increases are expected in areas including labour, business rates, utilities and sugar taxes.”