JD Wetherspoon has reported a 5.2% rise in like-for-like sales in the 26 weeks to 26 January, with profits before tax and exceptionals up 8.5% to £37.8m.
Revenue in the period grew 9.1% to £683.2m with operating profit up 7% to £55.7m. Operating margin dipped slightly, to 8.2% from 8.3% in 2013.
Meanwhile, in the six weeks to 9 March 2014, like-for-like sales increased by 6.7%, with total sales increasing by 11.6%.
Like-for-like bar sales in the period increased by 3.6% (2013: 4.1%), food sales by 10.5% (2013: 13.4%) and fruit/slot machine sales decreased by 9.5% (2013: increased by 4.4%).
The company paid taxes of £294.8m in the year, against £274.9m in the same period last year, “an increase which is far greater than profit growth”.
Wetherspoons opened 19 new pubs in the period, bringing the number of pubs open at the period’s end to 905. As previously indicated, it expects to open c40-50 pubs in this financial year.
Earnings per share, before exceptional items, increased by 10.5% to 22.1p (2013: 20p). Earnings per share after exceptional items increased by 3.5% to 20.7p (2013: 20p).
Exceptional items before tax totalled £1.8m (2013: nil) and relate to interest due to HMRC, following the Rank High Court decision of October 2013, in respect of gaming machines.
Net interest, excluding the interest due to HMRC, was covered 3.1 times by operating profit (2013: 3.0 times). Total capital investment was £82.7m in the period (2013: £36.3m), with £58m spent on freeholds and new pub openings (2013: £19.1m) and £24.7m on existing pubs (2013: £17.2m).
Chairman Tim Martin said: “The first half of the financial year resulted in a good sales performance and reasonable growth in profits and free cash flow.
“The biggest danger to the pub industry is the continuing tax disparity between supermarkets and pubs. Thanks mainly to the work of Jacques Borel’s VAT Club, there is a growing realisation among politicians, the media and the public that a level tax playing field will create more jobs and taxes for the country.
“In the six weeks to 9 March 2014, like-for-like sales increased by 6.7%, with total sales increasing by 11.6%.
“We expect taxation and input costs to rise and the comparisons against a strong second half result in the last financial year will be more difficult. Despite these factors, the company continues to expect to achieve a reasonable outcome in the current financial year and has a solid platform for future growth.”