JDW to scale back openings due to tax burden

By John Harrington, M&C Report

- Last updated on GMT

Related tags: Exceptional items, Tax, Jd wetherspoon

JD Wetherspoon, the managed pub operator, has reported a 2.1% rise in like-for-like sales in the 26 weeks to 22 January but says it will scale back its opening programme due to the tax regime on pubs.

The continuing pub opening programme helped lift total sales by 8.4% to £569.4m, with profit before tax and exceptional items up 11.1% to £35.8m (after exceptional items: +3.1%, £33.2m).

Operating profit before exceptional items increased 7.2% to £53.1m (after exceptional items: +1.9%, £50.5m).
However, performance has dipped since the end of the period. Like-for-like sales in the six weeks to 4 March fell 0.7%, with total sales up 6.1%.
Across the half-year, like-for-like bar sales increased 3.4% (2011: + 0.6%), like-for-like food sales were up 0.1% (2011: +7.4%) and machine sales fell 3.8% (2011: -3.8%).
The company’s tax burden increased in the period. It paid £250.1m in taxes in the half year, 43.9% of sales, against £225.7m in the same period last year, 43% of sales.
JDW opened 20 new pubs and closed two in the half year; an airport lease expired and one pub was sold. It brings the estate to 841 pubs at the period end.
The company had previously aimed to open 50 pubs per year but will scale this back to 40.
Tim Martin, chairman of JD Wetherspoon, said: “The outcome for the first half of the financial year was reasonable, given the pressures on the UK consumer.
“The main challenges for the company, in this financial year of 53 trading weeks, will be the continuing cost pressures resulting from government legislation, including further increases to excise duty, business rates and carbon tax."

Related topics: JD Wetherspoon

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