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Smoking ban takes its toll on JD Wetherspoon

From The Publican

By Hamish Champ , 07-Mar-2008

The smoking ban predictably hit pre-tax profits across JD Wetherspoon's 681 managed pubs, sliding 13 per cent in the first half of the group's financial year.

In the six months to January 27 overall turnover grew 0.4 per cent to £440.2m, while like-for-like sales dipped two per cent.

Operating profits fell four per cent to £44.4m, operating margins dipped 0.5 per cent to 10.1 per cent, and pre-tax profits fell 13 per cent to £28.5m.

Wetherspoon chairman Tim Martin said: "The half year to January 27 2008 was a challenging period for the company and for the pub trade generally, since it followed smoking bans in England, Wales and Northern Ireland in the second half of the last financial year.

"As anticipated, the introduction of the bans resulted in a strong growth in food sales but a decline in bar sales, which put pressure on margins and profits.

"In February, we continued to generate strong growth in food sales combined with a decline in bar sales.

"We expect second half sales trends to be broadly similar to those of the second quarter, to experience some cost pressures, and therefore have a slightly more cautious outlook for the second half of this financial year."

Martin said he expected bar sales to recover as customers adjusted to life under the ban, but warned that "significant cost pressures" would continue.

The group was meanwhile seeing gross food sales worth £8,600 per pub per week, up from £7,900 last year. Coffee and tea sales were up 12 per cent, at 514,000 cups a week.

Wetherspoon also announced two new board appointments: Paul Harbottle, chief operating officer, and Su Cacioppo, a former bar shift manager and now personnel and legal director.

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