Wetherspoon chairman Tim Martin has used the company’s interim results to again call for tax equality between the on and off-trade, and for the UK to exit the EU, after reporting an operating profits slump of 10.8%.
While announcing the company’s performance for the 26 weeks ended 24 January 2016, he said: 'As previously highlighted, the biggest danger to the pub industry is the continuing tax disparity between supermarkets and pubs. There is a growing realisation among politicians, the media and the public that pubs are overtaxed and that a level tax playing field will create more jobs and taxes for the country.
'A wide debate is taking place as to whether the United Kingdom should leave the European Union. I favour withdrawal from the Union, since returning power to the national parliament will increase the level of democracy and accountability.'
Revenue during the period grew 6.2%, to £790.3m and like-for-like sales grew 2.9%. However operating profit was down 10.8% from £55.4m in 2015, to £49.4m. Profit before tax fell 3.9% to £36m. According to Wetherspoon, the decline in operating margin was mainly due to a lower gross margin and higher rates of pay for pub staff.
However, this was partially offset by a property gain of £3.8m.
Like-for-like bar sales increased by 2.9% (2015: 1.5%) and food by 2.9% (2015: 10.1%). Like-for-like room sales at the company’s hotels increased by 7.5% (2015: 11.8%).
Martin said 2016 was looking 'slightly more favourable', with like-for-like sales increasing by 3.7%, in the six weeks to 6 March 2016, and total sales up 5.7%.
However, he warned of the upcoming impact of the national living wage upon future profitability. 'Sales comparisons in the second half of the financial year will be slightly more favourable, although further wage increases are due in April,' he said. 'As a number of companies have indicated, the pub and restaurant market is highly competitive, but we are aiming for a reasonable outcome for the financial year.'
This article was edited following the company's press conference.