As JD Wetherspoon announced its interim results to the City this morning the company did what it does best and kept the analysts and financial hacks guessing.
Despite its highest ever turnover, JD Wetherspoon's pre-tax profits plunged by 20 per cent during the six months to 23 January, with like-for-likes through February also down 1.9 per cent.
Tough trading conditions, underpinned by a raft of cost pressures, including the impact of minimum wage rises, an increase in utilities costs and the costs of implementing licensing reform, were all cited as factors by chief executive officer John Hutson.
The figures, which were described as "below expectations" with "the trend likely to continue into the foreseeable future" by analyst Douglas Jack, showed operating profit down 11 per cent to £34.4m over the half year.
In defence of the disappointing results, Mr Hutson highlighted Wetherspoon's highest ever weekly turnover and stressed that the costs of absorbing minimum wage increases, plus the future bourn out of current licensing costs, would ease through 2005.
In light of Wetherspoon's current disposal of 16 sites, Mr Hutson confirmed: "We will not be growing the estate in size, and will continue with the sale of smaller pubs which may be better run as part of a different style of estate."
Mr Hutson also talked of the possibility of staff reductions, possibly cutting the number of managers in each pub from the current average of five.
On Wetherspoon's controversial unilateral decision to introduce non-smoking pubs, the company said that sales remained strong in pubs which had banned smoking. And there were some signs that wine and food sales were growing their percentage of the sales mix.
One analyst suggested that Wetherspoon's chairman, Tim Martin, was promoting a unilateral smoking ban as a ploy to lend weight to lobbying the government to introduce a blanket ban, thus taking some of the pressure off Wetherspoon's which many believe will be particularly badly hit.
Asked about the ongoing share buy-backs and the possibility of a management buy-out, Mr Hutson was adamant this was not an option. "This would involve taking on more debt which is not what we are looking to do," he said.