PUB chain JD Wetherspoon has seen a big jump in sales, but a combination of high taxes, rising fuel bills and food and drink inflation dented profits.
Revenues for the six months to January 27 rose 10 per cent to £626.4m and like-for-like sales rose seven per cent, but underlying profits fell 2.7 per cent to £34.8m.
Sales are rising as more cash-strapped customers choose the chain’s value for money food and drink offers which undercut other pubs and restaurants.
But the group said unfair taxes are hitting it hard. Wetherspoons has long called for tax parity between pubs and supermarkets, which pay virtually no VAT on food, allowing them to sell alcohol at much cheaper prices.
Chief executive John Hutson said: “We don’t mind paying taxes, but we pay VAT on everything. Supermarkets pay next to nothing on food.”
He added that tax parity between pubs and supermarkets would lead to a rise in the average price of alcohol – a better way for the Government to meet its health objectives rather than introducing a minimum price on alcohol.
“It’s not great to put our like-for-like sales up by seven per cent and to have no profit growth to show from it, it does make me want to cry into my beer,” said Wetherspoons’ chairman Tim Martin.
The group hopes that improved offers and revamped pubs will lead to an increase in profits although it expects taxes and input costs will continue to rise.
The group’s total tax bill was £273.5m, an increase of £23.4m and the equivalent of 44 per cent of its sales.
Analysts said the company is performing better than expected and is on track for profits of more than £70m in the year to July.
The group, which has 70 pubs in Yorkshire, is opening two new pubs in Whitby and Selby later this month and will open a new site in Yeadon in May.
It will also open new pubs in Sowerby Bridge, Hemsworth and Chapeltown, but the dates are yet to be announced.
The group has also identified new sites in Wakefield, Beverley, Bramley, Saltaire, Malton, Knaresborough, Morley, Headingley, Leeds, Sheffield, Northallerton, Pontefract and Holmfirth.
It said it is looking for more sites in the region.