Wetherspoon bounces back to profit as boss rails against Covid curbs

JD Wetherspoon has returned to profitability as the absence of Covid-related restrictions continued to boost sales.

Tim Martin’s company, one of Britain’s largest pub chains, with 826 locations, announced that it made pre-tax profits of £42.6 million for the year ended July 30.

This compares with a loss of £30.4m in the previous 12 months, when rising inflation and the emergence of the Omicron variant put people off visiting hospitality venues.

Although cost pressures continue to impact households and the pub sector, Wetherspoon’s revenues still increased by 10.6 percent to £1.93 billion last year.

Food sales drove the bulk of this growth, rising by over £100m to £742m, yet drinks sales still made up the majority of the company’s turnover.

Since the end of the period, the company noted that trading continued to perform well, with like-for-like sales up 9.9 percent in the first nine weeks of the new financial year.

Martin, who founded Wetherspoon’s in 1979, praised the result but warned that ‘perhaps the biggest threat to the hospitality industry is the possibility of further lockdowns and restrictions’.

The New Zealand-born chairman was a noted critic of the government’s response to the pandemic and the massive job and financial losses the pub sector experienced as a result.

He has also spoken out about the differences in the way pubs, restaurants and supermarkets are taxed.

As for VAT, Wetherspoon notes that pubs pay around 20 percent on food sales, while supermarkets pay zero.

For business rates, the report noted that pubs hand over around 20p per pint, while grocers only pay around 2p.

Wetherspoons shares were 4.4 per cent lower at £6.72 on Friday morning, making them the worst performer on the FTSE 250 Index.

While they are still up by about half this year, shares remain well below their pre-pandemic levels.

Mark Crouch, analyst at investment platform eToro, said: ‘While shareholders will raise a glass to the company’s return to the black, profits are less than half the level they were at their peak in 2018.

‘Some of this is of course due to rising energy and other costs, which have risen significantly for businesses over the past eighteen months.

‘That may hamper growth plans for the next two years, but overall and over the longer term we are significantly more positive about Wetherspoon than we were a few months ago.’