In a statement on its annual results the company said the UK needs to offer domestic businesses incentives to grow the economy rather than “taxing them to the hilt”.
The news came as JW Lees announced profit before tax for the year ended 31 March 2025 of £7.1m (2024: £7.1m).
Turnover for the year increased to £99.9m (2024: £95.8m) whilst the group’s net assets increased to £102m (2024: £98m). The company said it invested significantly in its existing pub estate and completed £11m of capital expenditure in the year (2024: £8m).
This momentum continued as in the current year’s first 15 weeks commencing April 2025 JW Lees has experienced strong like-for-like retail sales of 8.6% and overall retail sales growth of 17% with invested sites showing sales growth of 32%.
The directors of JW Lees said they anticipate the group will continue to operate profitably in the future.
But the company did raise concern about a number of issues and challenges facing the business and the pub sector.
Challenges
From a global perspective, major conflicts continued to dominate the JW Lees 2024/25 financial year, including the Ukraine Russia war, the conflict between Israel and the Hamas-led Palestinian groups in the Gaza Strip.
The company also highlighted political change including the election in the UK of a Labour Government led by Sir Keir Starmer, and the election in the US of Donald Trump as President.
JW Lees said it is still having to tackle the challenges presented by Rachel Reeves, Labour’s Chancellor of the Exchequer, in her first Budget on 30 October 2024.
It highlighted the fiscal measures, including increasing national insurance contributions and national living wage rates, are having a major cost impact on business and the hospitality sector.
These changes increased JW Lees cost base by more than £2m per year, which represented nearly a third of pre-tax profits.
Inheritance tax
As a family business, JW Lees said the changes to inheritance tax, with effect from 6 April 2026, which will remove the benefit of 100% Business Relief (BPR), would also have a major impact. This allows family-owned businesses to be transferred from one generation to the next without a tax hit.
It said this has been a “significant distraction” at board level, working through and planning for the potential implications. JW Lees added it remained hopeful the Government would listen to reason and decide not to enact the changes and it continues to lobby for industry consultation to this change.
It also said that energy prices, food price food inflation and the cost-of-living pressures remain challenging.
In a statement the company said: “Despite the headwinds during the course of the financial year and the significant shift in its cost base relative to prior to Covid, JW Lees is pleased to report, with continued careful cost and financial management, the continued steady growth and progression of the business, enabling the company to achieve record sales and to maintain levels of profitability in the face of an increasing cost base.”
New opportunities
Over the year JW Lees invested significant amounts in 27 pubs, inns and hotels, and bought two more freeholds sites, the Craigside Manor Hotel Llandudno, a 20-bedroom hotel and pub, from Whitbread plc, and the Bellflower Pub and Kitchen in Garstang from Marston’s plc, each of which received more than £1m expenditure before successfully reopening.
Both sites moved into profit within one month of reopening following their respective refurbishments.
JW Lees said it would proactively seek new opportunities, both by acquiring new sites and investing in existing properties, and by developing its beers and brands. It also announced a deal to exclusively brew Boddingtons cask ale.
It further revealed it was continuing with the trial of a new Retail Agreement (begun in 2023/24), whereby a Retail Operator runs the pub with direct responsibility for the operation of the site, including all of the wages in return for a % of the sales.
The company extended this trial into three sites in total and continues to review this operating format, with plans for three more sites which will be converted in the current year. The sites tend to be wet-led and pub games including live sports and darts featuring heavily in the offering.
JW Lees managing director William Lees-Jones said the company was outperforming the market.
He continued: “Our performance in our invested sites is particularly strong and we can see how much our guests enjoy the JW Lees pub experience with guest satisfaction for the year running at 92%.
“That said, the increased costs which the Chancellor imposed on us in her budget mean that the business will inevitably be less profitable and so we need to be cautious and focus on productivity; we are calling on the Chancellor to put measures in place to support hospitality in her next budget and this would mean a choice between the long-awaited review of business rates, lower VAT, lower beer duty or less onerous National Insurance contributions.”
JW lees said the year was overshadowed by the tragic and very sad passing on 8 October 2024 of Simon Lees-Jones, who, during his 31 years as JW Lees Property Director, led the JW Lees acquisitions strategy, as well as being a main board director and shareholder.
