Wetherspoon cautious on year ahead

The pubs group said tax increases, higher interest charges and the risk of dampened consumer spending meant it was "slightly more cautious" about the next financial year.

Wetherspoon reported same outlet sales for the 13 weeks to April 25 were down 0.8 per cent, compared with a 0.2 per cent decline over the nine months of the financial year so far.

Wetherspoon said total company sales increased 3.6 per cent in the third quarter, compared with four per cent in the year to date.

The firm now has 767 pubs across the country, having opened 26 new sites in the year so far and closed two.

It anticipates adding a total of 45 new locations in the year to July.

Margins held up in the three months and the company said profit and cashflow continued to be "resilient" despite price rises in January and March caused by higher VAT levels and an increase in excise duty for pubs.

The firm also reported a cash payment of 14.9m for a claim against overpayment of VAT on amusement machines, although it said the potential income would be contingent on continuing a legal process.

"The performance of our pubs which opened within the last two years is encouraging; we continue to believe there are substantial opportunities for us to acquire sites at reasonable prices," the firm said.

"We therefore remain confident about the company's prospects for this financial year.

"However, we now feel slightly more cautious about the outlook for the next financial year, as a result of the annualised effect of recent tax and duty increases, and higher interest charges, combined with the risk of more subdued consumer expenditure."

Shares in the firm fell over eight per cent today.

Hugh-Guy Lorriman, of Seymour Pierce, said: "Even the mighty Wetherspoon can suffer in the current environment - and as we see... the like-for-like trend worsened in the third quarter relative to the year to date."

He said his forecasts for the full year and 2011, which are already at the lower end of analyst predictions, would not be altered after the update.