JD Wetherspoon saw like-for-like sales in the 12 weeks to 21 January increase 6%, with total sales up 4.3%.
In the year to date (25 weeks to 21 January 2018), both metrics were up at the same levels.
The group said that, as a result of better-than-expected sales, year-to-date underlying profit before tax is slightly ahead of expectations. However, it warned that similar outperformance in the second half will be more difficult to achieve.
Since the start of the financial year, the company has opened three new pubs and sold 10. It intends to open approximately 10 pubs in the current financial year.
The company has spent £15m on buying the freeholds of pubs of which it was previously a tenant and has bought back £51m of shares in the financial year.
Net debt, at the end of this financial year, is currently expected to be around £30m higher than the level at the last financial year end.
Chairman Tim Martin said: “”Sales in the second quarter to date matched the strong growth of the first quarter. In the second half of the year, sales comparatives will be more difficult.
“We face significant costs in the second half in areas which include labour, business rates and the sugar tax. There will also be some uncertainty as to the effects on our business of the FIFA World Cup.
“Nevertheless, given better-than-expected year-to-date sales, we currently anticipate a slightly improved trading outcome for this financial year.”
He added: “Most economists, business organisations and universities made extremely pessimistic forecasts about the immediate aftermath of a leave vote in the referendum, which have proven to be highly inaccurate. The Treasury, the IMF and the OECD were also key participants in this chorus. Their erroneous views lend weight to Warren Buffett’s aphorism that most forecasts tell you a lot about the forecaster, but nothing about the future.
“In Wetherspoon’s last update, I said that the CBI, the British Retail Consortium (BRC) and the chairmen of Whitbread and Sainsbury’s had issued ‘factually incorrect and highly misleading’ information about food price rises, post Brexit, which had been reported as if they were true in publications such as the Financial Times, The Sunday Times and The Guardian. None of these individuals or organisations has contested the truth of the criticisms. If this misleading information were true, it could have a damaging effect on Wetherspoon, similar businesses and the public - but it is not.
“By refusing to acknowledge the fact that food prices will be reduced, post Brexit, if the UK leaves the EU without a deal and parliament votes to eliminate taxes which are currently imposed on non-EU food imports, the CBI and the BRC are trying to fool the public and MPs and bringing business into disrepute.
“These factually incorrect scare stories seem to be designed to convince the public that a deal is necessary to avoid a ‘cliff edge’. In fact, the cliff edge is a myth. There is almost no action needed, for most companies, if the UK leaves the EU without a deal. Provided that parliament takes sensible steps, such as the elimination of food taxes, the public will benefit from lower food prices, from regained fishing rights and from savings of about £200m per week of EU contributions.
“Many people, including journalists and MPs, trust information from established organisations such as the CBI and the BRC - and many have been persuaded that food prices will rise if we leave the EU and the Customs Union. It should be emphasised that it is untrue and that the Customs Union, like the Corn Laws abolished nearly 200 years ago, keeps food prices at artificially high levels.”
