Pub group to extend breakfast club hours

The company, whose cut-price food and drink deals have helped it grow despite the recession, hopes opening earlier will attract the lucrative office worker market.

"The breakfast market is a growing market," said chief executive John Hutson. "We think it's got huge potential. We've been opening at 9am for breakfast for the past four and a half years and it's gone very well.

"By pushing forward the hours we think we will pick up a new sort of customer."

Wetherspoon now sells about 275,000 breakfasts and 500,000 coffees and teas weekly, and believes by opening early from April 28, it can "substantially increase" their sales.

Mr Hutson added the focus will be on food sales and "only a handful" of pubs will be licensed to sell alcohol early.

The pub group also unveiled a new 530m debt facility, giving it the firepower to ramp up its expansion plans. Wetherspoon has 50 pubs in Yorkshire, and plans to expand its 746-strong estate by 50 this year, including sites in Sheffield and Leeds.

It has also earmarked sites in Headingley, Ripon, Wakefield, Sheffield, Whitby and Driffield, and is on the lookout for more.

The company said underlying pre-tax profit rose by 17.5 per cent to 36.2m in the six months to January 24, ahead of a consensus of 35.4m.

Including new pubs, total sales grew 4.1 per cent to 488.1m, but like-for-like sales edged up just 0.1 per cent. Since the end of January, like-for-like sales have dipped 0.4 per cent as the economic climate takes its toll on the trade. Mr Hutson said the pub group has had to "run pretty hard" to achieve this performance. Figures from the British Beer & Pub Association suggest an average of 39 pubs a week are closing in Britain.

Mr Hutson also called for a halt on beer duty in this month's budget, to help the industry ride out the downturn. The group paid 197.8m in various taxes over the six months.

"The Government makes more out of a trading pub than the pub operators," he said. "If the tax on the industry were to remain at a similar level that would allow the industry to try to catch its breath."

The company said it would pay a regular dividend of 12p per share and, in light of the refinancing, reward shareholders with a special dividend of 7p per share. Wetherspoon scrapped dividend payments this time last year pending successful completion of a refinancing.

Wetherspoon's new financing is with a syndicate of 11 banks and is due to expire in March 2014. It replaces the previous 435m facility, which was due to expire in December.

"The company has been winning market share from competitors suffering in the depressed economy and is now preparing to take over more of their pubs," said KBC Peel Hunt analyst Paul Hickman.

"Wetherspoon has the will and now has the means for another major transformation on the scale of that it achieved in the 1990s."

Nigel Parson, at Evolution Securities, added: "Wetherspoon is having a good recession – it is opening a new pub every week and it remains good value on cash metrics."