Smoking ban costs to hit Wetherspoon profits
JD Wetherspoon has warned that annual profits may be 'marginally below expectations' because of the cost of preparing its pubs for the smoking ban.
Other news was good with the company announcing that third-quarter like-for-like sales had increased 3.4% with year-to-date like-for-like sales up 6.1%.
A statement released this morning said: "In addition to the cost pressures previously highlighted in energy and wages, the third quarter has seen increases in our underlying investment in certain areas.
The scale of these initiatives will result in a short-term impact on profitability and the full year profits outcome is expected to be marginally below current market expectations A statement.
"These include increased repairs in advance of non-smoking legislation, combined with extra costs from the temporary closure of all of our pubs for the installation of new beer and wine chilling systems.
"We have increased non-smoking areas to approximately 80% of customer space since January, which has resulted in strong growth in food sales, with some adverse impact on bar volumes, and we will continue to increase our marketing activity in advance of non-smoking in England.
"Wetherspoon has led the industry with regard to non-smoking initiatives and has been willing to invest in the relevant areas to maximise the benefit from non-smoking legislation. This worked well with our Scottish pubs, and we have continued to take initiatives in recent months, at a level in advance of our previous plans.
"We believe that these are important areas and will produce significant underlying benefits during the change to a non-smoking environment.
"The scale of these initiatives will result in a short-term impact on profitability and the full year profits outcome is expected to be marginally below current market expectations."
