JD Wetherspoon sees FY trading outcome ahead of expectations

Pub operator JD Wetherspoon said on Wednesday that its trading outcome for the year is likely to be ahead of previous expectations following better-than-expected sales so far this year.

In a trading update for the 13-week period to 23 April, the company said like-for-like sales were up 4% with total sales 1.3% higher. Year-to-date, LFL sales have increased 3.5% and total sales are up 1.4%.

The operating margin in the period was 7.3% compared with 6.4% in the same 13 weeks last year, while the year-to-date operating margin was 7.8% compared with 6.3%.

The group has opened nine pubs since the start of the financial year and sold 36. In addition, three pubs have been closed and are being marketed. It expects to open one further pub in this financial year.

Chairman Tim Martin said: "As previously reported, the company expects significantly higher costs in the second half of the financial year, mainly for business rates, utility taxes, excise duty and labour. In view of these costs and stronger sales comparisons, the company remains cautious about the second half of the year.

"Nevertheless, as a result of better-than-expected year-to-date sales, we currently anticipate a slightly improved trading outcome for the current financial year, compared with our expectations at the last update.

"As a result of these higher costs the company anticipates it will require like-for-like sales of about 3 to 4% in our next financial year to maintain profits at current levels."

At 0900 BST, the shares were up 2.6% to 1,036p.