JD Wetherspoon profits from Rugby World Cup; plans freehold sales

JD Wetherspoon announces like-for-like sales increased by 2.4% and total sales increased by 6.1% during the early autumn period - with the intention of selling some freehold properties.

The pubco said sales were slightly higher in the last 6 weeks, which has coincided with the Rugby World Cup.

The operating margin in the 13 weeks to 25 October 2015 was 6.2%, compared with 7.7% in the same 13 weeks last year.

The lower margin was due to increases in the starting rates for hourly paid staff in October 2014 and August 2015, which totalled approximately 13%.

It opened 3 new pubs since the start of the financial year and has sold 1 with the intention to open approximately 15 pubs in the current financial year.

Having offered 20 leasehold pubs for sale, it said that it is now considering a 'small number of freehold disposals' in the course of the financial year. The news follows the decision to keep a number of sites originally put on the market, including one of the oldest JDW sites in Purley, The Foxley Hatch.

It also announced it remained in a 'sound financial position' with net debt at the end of this financial year expected to be 'slightly above' the 26 July 2015 total of £601.1million.

JD Wetherspoon founder and chairman, Tim Martin, said: “As we indicated in September, it is difficult to quantify exactly the factors which will influence our trading performance in the early stages of a financial year.

"Increased labour costs are clearly an important factor for all pub and restaurant companies and may result in our annual profits being slightly lower than the last financial year. We will provide updates in our regular statements.”