Tim Martin complains about tariffs as Wetherspoon introduces cheaper non-EU booze

J D Wetherspoon issued its pre-close trading statement for the financial year ending 29 July on Wednesday, reporting that in the 10 weeks to 8 July, like-for-like sales increased 5.2% and total sales by 5.6%.

The FTSE 250 budget pub chain said that in the year-to-date, like-for-like sales were ahead 5.2% and total sales by 4.2%.

On the property front, Spoons said it had opened six new pubs since the start of the financial year, and had completed the sale of 23 pubs, with no further openings expected before year-end.

Around £9m of exceptional, non-cash losses were expected in the year, mainly a result of pub disposals which were below the value in the firm’s balance sheet.

The company said it also spent £15.6m on buying the freehold ‘reversions’ of pubs of which it was previously tenant.

Looking at the books, Wetherspoon said it remained in a “sound” financial position, with net debt at the end of the year expected to be around £740m.

The company spent £51.6m in respect of share buybacks in the first quarter of the year.

As it had previously reported, the shareholding of chairman Tim Martin had risen above 30%, as a result of share buybacks in the last 12 years.

It said a rule 9 'whitewash' under the Takeover Code would again be put forward at the firm's general meeting in November, which would allow the company to continue to undertake buybacks.

True to form, chairman Tim Martin took the opportunity of the pubco’s RNS release to espouse what he saw as the benefits of Brexit, complaining that the “protectionist” EU imposed high tariffs on imports including wine, rice, coffee, oranges, children’s shoes and clothes.

JD Wetherspoon does not sell children’s shoes or clothes.

Martin noted the company’s recent review of its product range, exchanging EU products such as French champagne for sparkling wine from the UK and Australia, and German wheat beer for British and American alternatives.

“The new products are now available, at reduced prices, in our pubs,” he said.

At the time of the announcement, Martin did admit an economic reason for the changes, with the new non-EU products cheaper for the company to source, despite the European Union’s “protectionist” high tariffs.

"We plan further initiatives in this area in the coming months,” he said.

Finally focussing on his company’s performance, Martin said JD Wetherspoon continued to anticipate a trading outcome for the financial year in line with its previous expectations.

“As in the current year, we anticipate considerable cost increases next year, in areas including business rates, the sugar tax, utility taxes and wages.

“In addition, as a result of an increase in our ‘swaps’, our interest rates will rise by around £7m.”

Tim Martin also included an article he had recently written for the Sun newspaper on Brexit for the benefit of Spoons’ investors.

The pubco said its preliminary results were due to be announced on 14 September.