JD Wetherspoons returns to profit but warns of inflation impact
The trading update comes after the ONS recorded an unexpected 10.4% jump in inflation that was driven by increased food and drink prices in pubs and restaurants
Pub chain JD Wetherspoons has returned to profit in H1, with profit before tax reaching £4.6m for the 26 weeks ended 29 January after a £26.1m loss the prior year.
Nonetheless, this was still below the £50.3m profit reported for the same period in 2019.
However, the group’s like-for-like sales have maintained a 5% increase compared with the full year results from 2019.
The trading update comes after the ONS recorded an unexpected 10.4% jump in inflation that was driven by increased food and drink prices in pubs and restaurants, as founder Tim Martin warned of “inflationary pressures” on the industry.
He maintains that the pub chain has a “full complement of staff”, despite a competitive labour market.
Tim Martin, chairman of JD Wetherspoon, said: “Supply or delivery issues have largely disappeared, for now, and were probably a phenomenon of the stresses induced by the worldwide reopening after the pandemic, rather than a consequence of Brexit, as many commentators have argued.
“Inflationary pressures in the pub industry, as many companies have said, have been ferocious, particularly in respect of energy, food and labour. The Bank of England, and other authorities, believe that inflation is on the wane, which will certainly be of great benefit, if correct.”
He added: “Having experienced a substantial improvement in sales and profits, compared to our most recent financial year, and with a strengthened balance sheet, compared both to last year and to the pre-pandemic period, the company is cautiously optimistic about further progress in the current financial year and in the years ahead.”
