JD Wetherspoon has denied its move to offload around 30 pubs is an exercise in “money-raising”, as the company signalled its expectation of an “improved outcome” for its next financial year.

Shares in the pub giant surged by more than 10% as chairman Tim Martin highlighted a continuing improvement in sales and a “slightly reduced expectation for cost increases”.

Wetherspoon said like-for-like sales for the first 10 weeks of the final quarter of its current financial year increased by 11% compared with the same period in its last full financial year before the pandemic, which ended on July 28, 2019. Sales in the year to date are up 7.4% compared with the same year.

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Compared with 2022, like-for-like sales have risen by 11.5% in the fourth quarter to date and by 12.9% in the year to date.

Wetherspoon said it had sold, closed, or surrendered to the landlord 28 pubs in the financial year to date, generating net cash inflow of £6.5 million from the disposals, while opening three.

Fifteen of the pubs disposed were leasehold, where the lease had expired, or where the company had exercised a break clause in the lease. In the case of 12 of the 15 leasehold pubs, the company said it had another pub nearby, within a radius of about one mile. Of the remaining 13 pubs, 11 of these also had another Wetherspoon pub nearby.

It did not disclose the names or locations of the pubs it has sold.

The company said: "The disposals outlined above have been characterised in a small number of newspaper articles as a “money-raising” exercise, provoked by the difficult trading circumstances for the hospitality industry in recent years. This is a misinterpretation.

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“In fact, the disposals have raised relatively modest amounts (although every little helps) and almost all are related to circumstances, as outlined above, where there is another Wetherspoon pub nearby. 22 pubs remain on the market or are under offer. The company currently has a trading estate of 827 pubs.”

The company said net debt was £688m on July 9, around £114m lower than when it reported its interim results for 2020, immediately before the pandemic.

Profits for the current year will be in line with expectations, Wetherspoon noted. House broker Investec is forecasting the company will make a profit before tax of £68m this year, a slight upgrade.

Mr Martin said: "The company expects profits in the current financial year to be in line with market expectations.

“As a result of a continued improvement in sales and a slightly reduced expectation for cost increases, for example energy costs, the company anticipates an improved outcome for the next financial year and anticipates an outcome for the first half of FY24 approximately in line with the second half of FY23.”

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Russell Pointon, director of consumer at Edison Group, said: “This is a reassuring trading update from JD Wetherspoon, which noted a rise in sales and a fall in debt. Higher labour and supplier costs have undoubtedly had their impact on Wetherspoon over the past financial year; yet a growth in sales since 2019 indicates the attraction of a cheap and cheerful brand with a wide selection of beers during a cost-of-living crisis.

“Despite growing sales figures, however, the financial year has seen the closure of 28 Wetherspoon pubs, where 15 of these were leasehold. In the trading update, Wetherspoon denied the statement that these closures were a “money-raising” exercise.

“Certainly, the £6.5m cash inflow raised by the disposals would do little to alleviate the company’s net debt, which amounted to £688m as of 9th July 2023. On the other hand, as higher food prices continue to bite, the redirection of resources into a smaller number of remaining venues will help Wetherspoon to conserve capital during a trying economic period.”

Shares in Wetherspoon closed up 10.3%, or 68.5p, at 731p.