Tim Martin lays into coalition government over taxes
'New government, same attitude towards pubs', was the withering assessment of David Cameron's administration from JD Wetherspoon boss Tim Martin.
Speaking as the managed pub group announced its first half results, Martin said the coalition was continuing the work of the previous government in "zealously" increasing taxes and regulation to levels he believed were "unsustainable".
No fan of government intervention in business, Martin again highlighted the price disparity between supermarkets and pubs and pointed to France, where VAT on food sold in restaurants and bars is set at 5.5 per cent. The government recently announced that a VAT cut for restaurants was not on the agenda for the foreseeable future.
But Martin still piled into the UK's tax regime. "In contrast to previous decades, Britain has now become a high tax and regulation environment for business, the effects of this being seen in many thousands of closed pubs and other small businesses across Britain, as well as a marked increase in unemployment."
Meanwhile, higher interest charges dented JD Wetherspoon's pre-tax profits and operating margin in the first half of its current financial year, but the managed pub group still saw turnover and operating profits rise in the period.
Like-for-like sales for the 26 weeks to January 23, 2011, rose 2.3 per cent, with total sales - which included 14 new pubs - up 7.6 per cent.
Operating profits rose 1.4 per cent to £49.6m. Pre-tax profit was 11 per cent lower at £32.2m, which Wetherspoon put down to higher interest charges, following the renewal of its bank facilities in March last year.
Earnings per share fell 9.1 per cent, and an interim dividend of 4p per share was declared. The 19p dividend announced last year included a special 7p payment to shareholders.
Operating margins slipped more than nine per cent, due to rising costs in areas such as taxes, labour, utilities and bar & food supplies. "These pressures which are likely to continue into the next financial year," the group said.
Wetherspoon appeared to have continued its sales momentum into recent trading, however, with like-for-like sales in the six weeks to March 6, 2011, up 2.8 per cent, with total sales up 7.9 per cent.
Martin said: "In common with most businesses in Britain, the company is faced with rising costs for a wide range of goods and services, combined with a reduction in disposable income for many customers.
"In addition, pubs are dealing with a pernicious combination of increasing taxes and regulations.
"In spite of these obstacles, our resilient sales performance and strong cash flow should enable the company to produce a reasonable outcome in the current financial year," he said.
Wetherspoon also confirmed the appointment of caretaker finance director Kirk Davis to the role full time. Davis replaces Keith Downe, who left the business last year.
