Wetherspoon profits set to drop as costs rise

Pub chain JD Wetherspoon backed its full-year expectations on Wednesday but said first-half profit will be lower than a year ago due to rising costs.

The company said like-for-like sales for the 12 weeks to 20 January were up 7.2%, while total sales were 8.3% higher. In the year to date, LFL sales were 6.3% higher and total sales were up 7.2%.

Wetherspoon said it remains in a "sound" financial position, with net debt at the end of this financial year expected to be around £10m higher than the last. The group has agreed a new five-year revolving credit facility of £875m, which matures in January 2024.

Since the start of the financial year, it has opened two new pubs and sold six. It also plans to open between five and 10 pubs in the current financial year. Wetherspoon said it has spent £56m in the year to date on buying the freeholds of pubs of which it was previously a tenant.

Chairman Tim Martin said: "Sales growth has been strong since our last update. Costs, as previously indicated, are considerably higher than the previous year, especially labour, which has increased by about £30m in the period, but also in other areas, including interest, utilities, repairs and depreciation."

Brexit-backing Martin, who recently axed all European wines and a third of EU beers from his pubs - also had a fair bit to say about the UK's divorce from the EU, repeating his call for no deal.

At 0920 GMT, the shares were down 0.5% to 1,190p.