JDW drops profit forecast
JD Wetherspoon, the quoted pub group, has issued a bullish trading update for the final two months of its financial year but said profits would be towards the bottom end of expectations.
Profits have been revised down two per cent to £53.5m - within analysts predictions.
The company saw like-for-like sales rise by 3.8 per cent in May and by 3.5 per cent for June.
The figures seem all the more compelling when compared to the rest of the industry - many operators are reporting very marginal or negative like-for-like growth.
"Wetherspoons is showing once again that it enjoys the greatest sales success of any company in the sector, whatever the economic conditions," said executive chairman Tim Martin.
"We are in a very strong position. Our pubs are the busiest in the areas in which they trade, our staff are incentivised by the best packages around, we have won loo of the year, numerous design awards - it's looking good."
Like-for-likes for the 48 weeks to the 30 June increased by 5.1 per cent. The first two weeks of July increased by 4.0 per cent and 5.0 per cent respectively.
The figures quosh speculation that the World Cup would have an adverse affect on the Wetherspoon business. "It's one of those myths that has taken root," said Mr Martin.
"There are a lot of people who don't want to watch sport all the time. A match only lasts for two hours and our pubs are all on circuits near pubs that show football. The pattern has been evident for years."
The company said that costs for the year to date are slightly higher than anticipated so that profits may be towards the lower end of analysts' estimates.
"It's not a bad statement," said one leading City analyst. "The company had an openings backlog, with 28 outlets opening in the last two months. That's a hell of an outlay and they will see nothing back in this year's figures.
"It's a good business, with a largely freehold estate and strong earnings growth. The share-price is cheap and it is time to take a look."
The company said that it predicted 85 and 87 new pubs in the financial year, slightly more than previous estimates. "Between 15 and 20 of those will be Lloyds No.1 outlets," said Mr Martin.
"That takes us to 30 and soon we will overtake Walkabout. Lloyds natural competitors include Edwards, Yates and Litten Tree, so I'm afraid it's good night to them."
The Glasgow Lloyds outlet is currently recording average weekly sales in excess of £30,000.
The preliminary results for the year ending 28 July are expected to be released on September 6, 2002.
