“EU trade deal impossible”, says Wetherspoon boss

Wetherspoon chairman Tim Martin on the Brexit campaign trail in the Grey Friar pub in Preston
Wetherspoon chairman Tim Martin on the Brexit campaign trail in the Grey Friar pub in Preston
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The Brexit-backing chairman of JD Wetherspoon has once again launched an invective against prominent backers of the Remain campaign, pouring scorn on their “gloomy economic forecasts” as the firm notched up solid sales and profits.

Tim Martin, hit out at Chancellor George Osborne, the IMF, the Bank of England and a host of other organisations including the CBI, the IMF and the OECD, for failing to “see through the flaws” of the EU, and said their economic forecasts “have been proven to be false”.

He also warned that Britain should not try to agree a trade deal with the EU.

“Now that the gloomy economic forecasts for the immediate aftermath of the referendum have been proven to be false, ‘scare story two’ is that failure to agree on trade deal with the EU will have devastating consequences,” he said.

“Wetherspoon’s experience indicates that reaching formal trade deals with reluctant counterparties is impossible - and it is unwise to try.”

The company reported better than expected results with a 3.6 per cent rise in pre-tax profit in the 52 weeks to July 24. “I haven’t seen a loss of confidence among customers. People in Britain are feeling good,” Mr Martin said.

In contrast, a trading update from rival Greene King cast a nervous eye towards Britain’s impending departure from the European Union.

The rivals’ share prices diverged as Greene King warned of tougher trading conditions ahead, adding to the mixed messages on Britain’s economic outlook since its EU referendum in June.

Wetherspoon’s has seen a 4.1 per cent increase in sales since July 24, while Greene King said its like-for-like sales had grown 1.7 per cent since the end of its financial year on May 1.

“While the broader implications remain unclear, a number of recent industry surveys have flagged risks to leisure spend and we are alert to a potentially tougher trading environment ahead,” a Greene King statement said.

The company, which brews ales such as Old Speckled Hen, had cautioned in June that uncertainty arising from the Brexit vote would weigh on consumer sentiment.

Stifel analysts described Greene King’s sales as “somewhat disappointing” because they implied that growth had slowed since the end of June.

Shares in Wetherspoon, which owns more than 950 pubs in Britain and Ireland, rose six per cent to a record high in morning trade. Greene King shares were down 4.5 per cent at 803 pence.

“Wetherspoon probably outperformed Greene King because most of its growth is generally organic,” said Investec analyst Karl Burns, citing the company’s market position and the brand’s reputation for value. “Most of Greene King’s growth is capex driven, so it takes time to come through.”

Looking ahead, Mr Martin said: “Despite this positive start, it remains to be seen whether this will continue over the remainder of the year, given the strong like-for-like sales in the last financial year and what remains a very low-inflation environment.”