Wetherspoon cheered by region's love of ale

THE chairman of JD Wetherspoon has highlighted the encouraging performance of its Yorkshire pubs, as the company revealed that it was on course to deliver "reasonable" full year figures.

Speaking on the day of Wetherspoon's annual meeting, Tim Martin said the "strong ale culture" in Yorkshire was helping to boost sales at the company's pubs in the region.

In a first quarter trading update, Wetherspoons said the investments in its pubs across the UK was paying off.

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The company, which has nearly 800 pubs across Britain, reported a 1.6 per cent increase in sales at pubs open for more than a year in the first quarter to October 24. Total sales rose by 7.3 per cent.

"Our sales, profit and cashflow continue to be resilient and the performance of our recently opened pubs remains encouraging," the company said in a statement.

Wetherspoon's, which announced last month that finance director Keith Down and chief operating officer Paul Harbottle were to step down, said there had been no significant change in its overall financial position since its annual report was published on October 7.

The company said it had increased planned investment in till systems, pub refurbishment and staffing and, as a result, its operating margin had fallen by about 0.7 percentage points to 9.4 per cent. It is targeting margin improvement in the second half.

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The statement added: "The company opened five pubs and closed two pubs in the quarter under review. It remains our intention to open approximately 50 pubs in the current year."

The statement said that "as previously indicated" higher interest charges, following refinancing in March 2010, will "adversely affect profits" in the first half of the financial year, although the company was confident of a reasonable outcome for the year as a whole, helped by investments in new and existing pubs.

In recent months, Wethersppon's trading performance has been boosted by its decision to open its outlets at 7am for breakfast.

In September, the group revealed it was selling more than 400,000 breakfasts a week and the move to open two hours earlier has prompted a 40 per cent rise in coffee sales to around 600,000 a week, making it one of the UK's biggest coffee chains.

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The group opened 47 pubs during the year to July and said it plans to open at least the same number in the year to come.

Yorkshire is a key target area for the company, which has identified sites in Ripon, Wakefield, Whitby, Driffield, Beverley, Scarborough, Pudsey, Mirfield, York, Morley, Horsforth, Halifax, Selby, Northallerton, Thorne, Ossett and Chapel Allerton

In September, Wetherspoon's operations director Martin Geoghegan said the company was looking for more sites in the region.

Speaking yesterday, Mr Martin said that the pub group's big city sites in Yorkshire were doing well.

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He said two recently opened pubs in Leeds had been particularly successful, adding: "We have done very well in Sheffield and many of the big towns.

"Quite a big focus for us is ale. It's a strong ale culture in Yorkshire. We do a lot of local ales and that also helps us."

Mr Martin said the company was providing an "enhanced pub" with more features, such as breakfasts.

Commenting on economic prospects, he said: "I'm hoping it's steady as she goes, and we can continue to improve the existing pubs and also do well at the newly opened ones.

"Overall, money is tight but we should still be able to earn a buck.

"Reasonable prices have an especially strong attraction in Yorkshire."

The next trading update is scheduled for January 19, 2011.