THE boss of giant JD Wetherspoon has warned rising costs mean first-half profits will be lower than last year’s, while launching an attack on the “protectionist” trade policies of the European Union (EU).
The comments from arch-Brexiter Tim Martin came as Wetherspoon reported strong trading over the festive period.
Wetherspoon, which has 65 pubs in Scotland, reported that like-for-like sales increased by 7.2 per cent in the 12 weeks to January 20, with total sales 8.3 per cent higher than the same period around one year ago.
However, Mr Martin warned that with costs running higher than last year, first-half profits would be lower.
The company stated in November that the low level of unemployment was putting upwards pressure on wages, and confirmed yesterday that it had increased the pay of its 44,000 staff that month. Mr Martin said staff costs have increased by tens of millions of pounds over the period.
Mr Martin said: “Sales growth has been strong since our last update. Costs, as previously indicated, are considerably higher than the previous year, especially labour, which has increased by about £30m in the period, but also in other areas, including interest, utilities, repairs and depreciation.
“Profit before tax in the first half is expected to be lower than the same period last year. Our expectations for the full year are unchanged.”
As is now customary with Wetherspoon updates, Mr Martin waded into the Brexit debate with an attack on EU trade policies.
He repeated his assertion that the UK, and his own company, would “benefit from a free-trade approach” by avoiding a deal which involves a £39 billion payment to the EU.
Declaring that the House of Lords has confirmed there is no legal obligation for the UK to make the divorce payment, Mr Martin added: “This approach also means that the UK, without the agreement of the EU, can end some or all of the protectionist tariffs and quotas that apply on non-EU imports, including rice, oranges, bananas, coffee, wine, children’s clothes and over 12,000 other products - many of which are not produced in this country.
“Ending tariffs reduces prices for consumers, without loss of government income, since the proceeds are currently remitted to Brussels.”
Wetherspoon said it has spent £65 million so far in the current year on acquiring the freeholds of pubs which were previously tenancies. It has opened two new pubs so far, sold six, and said it plans to open between five and 10 outlets in the current financial year. Wetherspoon it expects net debt to be around £10m higher at the end of this financial year compared with its last year-end.
Shares closed down 3p at 1,193p.
Why are you making commenting on The Herald only available to subscribers?
It should have been a safe space for informed debate, somewhere for readers to discuss issues around the biggest stories of the day, but all too often the below the line comments on most websites have become bogged down by off-topic discussions and abuse.
heraldscotland.com is tackling this problem by allowing only subscribers to comment.
We are doing this to improve the experience for our loyal readers and we believe it will reduce the ability of trolls and troublemakers, who occasionally find their way onto our site, to abuse our journalists and readers. We also hope it will help the comments section fulfil its promise as a part of Scotland's conversation with itself.
We are lucky at The Herald. We are read by an informed, educated readership who can add their knowledge and insights to our stories.
That is invaluable.
We are making the subscriber-only change to support our valued readers, who tell us they don't want the site cluttered up with irrelevant comments, untruths and abuse.
In the past, the journalist’s job was to collect and distribute information to the audience. Technology means that readers can shape a discussion. We look forward to hearing from you on heraldscotland.com
Comments & Moderation
Readers’ comments: You are personally liable for the content of any comments you upload to this website, so please act responsibly. We do not pre-moderate or monitor readers’ comments appearing on our websites, but we do post-moderate in response to complaints we receive or otherwise when a potential problem comes to our attention. You can make a complaint by using the ‘report this post’ link . We may then apply our discretion under the user terms to amend or delete comments.
Post moderation is undertaken full-time 9am-6pm on weekdays, and on a part-time basis outwith those hours.
Read the rules here