Total revenue for the six months to 24 January total revenue grew 6.2% to £790.3m. Operating profit fell 10.8% to £49.4m with an operating margin of 6.3% (2015: 7.4%). Profit before tax and exceptional items decreased by 3.9% to £36m. JDW said the decline in operating margin was mainly due to a lower gross margin and higher rates of pay for pub staff. It said the reduction in PBT was partially offset by a property gain of £3.8m (2015: loss of £0.3m).
During the half year wet sales increased by 2.9%, food by 2.9% while fruit/slot machines fell by 2.9%. Like-for-like room sales at the company’s hotels increased by 7.5%. Wet sales were 59.2% of the total, food was 37.0%, fruit machines were 2.8% and room sales were 0.8%.
During the period, JDW opened five new pubs and sold two, bringing the number of pubs open at the period end to 954. The company said it expects to open approximately 15 pubs in this financial year. JDW said it expected some of the pubs it has on the market to be sold in the remainder of the financial year.
In the six weeks to 6 March 2016 total sales increased by 5.7%. JDW said sales comparisons in the second half of the financial year would be “slightly more favourable”, although noted further wage increases are due in April.
It said: “As a number of companies have indicated, the pub and restaurant market is highly competitive, but we are aiming for a reasonable outcome for the financial year, before the impact of the property gain referred to above.”
On the evolving offer at its pubs, JDW said: “As previously highlighted, the company`s philosophy is to try continuously to upgrade as many areas of the business as possible. For example, we have recently introduced a new menu with a number of new and improved items. At the same time we continue to increase our range of “craft” beers and traditional ales and have introduced three beers from the excellent Hogs Back brewery nationwide. 296 Wetherspoon pubs were recommended in CAMRA`s 2016 Good Beer Guide, more than any other company.”
The company said it had also allocated £14.4m (2014: £15.3m) in bonuses and free shares to employees, 98.2% of which was paid to those below board level and 90% of which was paid to those working in its pubs.
Chairman Tim Martin stressed that the the company paid taxes of £333.0m in the period under review, an increase of 9.4% compared with the £304.5m paid in the same period last year - and about 50% higher than five years ago (2011: £225.6m).
Martin added: “As previously highlighted, the biggest danger to the pub industry is the continuing tax disparity between supermarkets and pubs. There is a growing realisation among politicians, the media and the public that pubs are overtaxed and that a level tax playing field will create more jobs and taxes for the country.
“A wide debate is taking place as to whether the United Kingdom should leave the European Union. I have written an article on the subject, favouring withdrawal from the Union, since returning power to the national parliament will increase the level of democracy and accountability.”