JD Wetherspoon sees record profits

Chairman and founder Tim Martin said while Britain has narrowly avoided economic “Armageddon”, it will be a “long, slow haul” to recovery, giving little cause for celebration to its cautious punters.

The chain of almost 900 pubs said growth is likely to remain subdued for the year ahead, after a recent slowdown in like-for-like sales growth to 2.5 per cent in the two weeks to September 8, as it comes up against strong numbers a year earlier.

Underlying sales grew 5.8 per cent in the 52 weeks to the end of July, with a 10.9 per cent surge in like-for-like food sales after the chain overhauled menus in its increasingly food-led pubs.

Record sales of traditional ales and ciders helped bar takings grow 3.8% during the year.

Wetherspoon, which opened its first pub in north London in 1979, added another 29 pubs during the year and sold three. It plans to open another 30 pubs in the year to the end of July 2014.

Revenues grew seven per cent to £1.28bn during the 52 weeks, compared with a 53-week financial year in 2012.

Profits before tax and exceptional items were 6.3 per cent stronger at £76.9m. But they fell three per cent to £57.1m once exceptional items such as impairment and onerous leases were included.

Mr Martin, who named the chain after one of his teachers, said drinkers remain wary about spending despite signs of life in the economy.

He said: “We’ve been living quite close to Armageddon since the trouble with the banks five years ago.

“People are perhaps starting to feel that the worst may not happen and are a bit more relaxed but they are still very cautious.

“It will take a long time for all the parties concerned to reduce their debt and get back to normal levels. It’s a long, slow haul.”

He said the gradually-improving economy will not see punters flocking back to pubs because of what he called unfair competition from supermarkets, which are able to subsidise their alcohol sales with VAT-free food sales.

Mr Martin said more than 10,000 UK pubs have closed in recent years, and higher taxes continue to heap pressure on the industry.

The chain is calling for a level playing field on tax with supermarkets, and will cut its prices by 7.5 per cent for one day on September 25 to publicise this.

Mr Martin said: “This does not make economic sense for the Government, since pubs create far more jobs per meal or per pint than supermarkets.”

Wetherspoon said it is aiming for a “reasonable” outcome for the new financial year, adding the recent 2.5% sales growth may be a good indicator of future sales trends.

The group paid bonuses and free shares worth £28.6m to its workforce of around 26,000 staff during the year.