Wetherspoon boss slams £5m tax hit

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Tim Martin has slammed the government for wiping £5m from his company's profits this year.The JD Wetherspoon executive chairman said that was the...

Tim Martin has slammed the government for wiping £5m from his company's profits this year.

The JD Wetherspoon executive chairman said that was the toll of a rise in tax on pre-mixed drinks such as Smirnoff Ice and Bacardi Breezer. "The government and pub company directors have been slow to realise that you cannot pass on this cost to the consumer," he said.

He also said that the national insurance hike that goes live next month would take a further £1m from the bottom line. Added to this the company's insurance premiums have risen by £3.25m this year.

He said the "legislative and tax uncertainty" created by the government was one of the factors in the company's reduced investment in new openings this year. "This government excels in tax by stealth," he said. "Business does not know from which direction it will be hit next."

New openings targets for the company have fallen in last few years from a staggering 100 each financial year, down to 50 for the current year. In the first half the company opened 21 units to take its total to 629 outlets.

Announcing results for the previous six months, the company announced it was preparing to open its first pub on foreign soil - in Dublin. The company plans to be on site and open within the next 12 months.

"It's a difficult market to find sites in and the licensing laws are quite strict," said Mr Martin. "But property prices have come off a bit recently, and that has given us the opportunity we needed."

Mr Martin also confirmed that the company had walked away from a number of sites. "We have looked to renegotiate terms on a number of leases to reflect the recent change in the market and where that hasn't happened we have withdrawn our interest."

The company has also seen hefty rises in insurance premiums across the business.

Wetherspoon reported an improvement in recent like-for-like sales on the back of an increase in drinks prices. Like-for-likes have climbed from 4,2 per cent over Christmas to 4.9 per cent in February.

For the six months, profits rose three per cent to £25.6m on sales up 23 per cent to £350.6m.

Average sales per pub hit £26,000.

Related topics JD Wetherspoon

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