JD Wetherspoon has reported preliminary results for the 26 weeks ended 28 January 2018, with more positive results than predicted.
Before exceptional items, revenue stood at £830.4m (2017: £801.4m), up by 3.6%, and like-for-like sales were up by 6.1%
Profit before tax stood at £62.0m (2017: £51.4m), an uplift of 20.6%, and operating profit was £74.0m (2017: £65.1m), a rise of 13.6%.
After exceptional items, profit before tax was £54.3m (2017: £39.9m), up by 36.1%, and operating profit was £74.0m (2017: £65.1m), up 13.6%.
Tim Martin, the Chairman of J D Wetherspoon plc, said, “In the six weeks to 11 March 2018, like-for-like sales increased by 3.8% and total sales increased by 2.6%.
“The company anticipates higher costs in the second half of the financial year, in areas including pay, taxes and utilities. In view of these additional costs, and our expectation that growth in like-for-like sales will be lower in the next six months, the company remains cautious about the second half of the year.
“Nevertheless, as a result of slightly better-than-expected year-to-date sales, we currently anticipate an unchanged trading outcome for the current financial year.”
Martin then spoke about Brexit, “There has been a huge debate, since the referendum, about the economic effects of Brexit.
'In particular, trade organisations like the CBI and the BRC, supported by the FT, the Sunday Times, the Guardian, the chairmen of Whitbread and Sainsbury’s and others, have misled the public by saying that food prices will automatically rise if we leave the EU without a deal.
“This is a fallacy – the EU is a protectionist organisation which imposes high taxes on food, clothing, wine and thousands of other items from non-EU countries – which comprise around 93% of the world’s population. Like Monty Python’s Dennis Moore, the EU “….steals from the poor and gives to the rich…”.
“In fact, MPs have the power to eliminate these import taxes in March 2019, thereby reducing prices for the public, just as their predecessors achieved the same objective by repealing the Corn Laws almost two centuries ago.
“Another frequently repeated Brexit concern is that the much bigger EU economy will be better able to withstand a Mexican standoff than the UK.
“This is also a fallacy. For example, Wetherspoon is one of the biggest customers, or possibly the biggest customer, of the excellent Swedish cider-maker Kopparberg. If trade barriers were imposed, so as to make Kopparberg uneconomic, then Wetherspoon could switch to UK suppliers or those from elsewhere in the world.
“In this case, the principal losers in a trade war would be the inhabitants of a small town in Sweden, where Kopparberg is produced, rather than the UK economy. Unfortunately for the Swedes, the EU negotiators, unlike those of the UK, are not subject to judgement at the ballot box, so Kopparberg’s influence on the outcome may be minimal.
“The same principle applies to thousands of EU imports including Prosecco, Champagne and many wines and spirits – in almost all cases there are suitable, and often excellent, alternatives to EU products available elsewhere.
“In fact, the biggest danger for EU producers, whose wine industry, for example, has lost huge market share to the New World, in spite of import taxes, is that UK consumers take umbrage at what they see as the overbearing behaviour of EU negotiators, and decide to favour products which originate elsewhere.
“Provided that the UK parliament votes to eliminate tariffs, EU producers will, in any event, be faced with a far more competitive UK market – since New Zealand wine producers, for example, will be able to compete on an equal, import tax-free basis, for the first time. So, the antagonistic approach of EU negotiators, which risks alienating UK consumers, is extremely unhelpful to businesses within their own bloc.
“Most economists who criticise Brexit use hypothetical arguments, but, in the real world, the UK can eliminate import taxes, improving living standards and simplifying the Byzantine tax system – both of these factors will improve the outlook for consumers and businesses in the UK.'