Wetherspoon’s boss tells Government to ‘refrain’ from tax hikes as profits dip

The boss of JD Wetherspoon, Tim Martin, has urged the Government to “refrain” from more tax hikes as the pub group announced weaker profits.

Profits slid by more than a quarter after it was hit by a jump in costs, including higher wages and property taxes.

The company, which runs 792 pubs across the UK, said pre-tax profits tumbled by 28% to £58.6 million for the year to July 26, compared with a year earlier.

The benefit from stronger sales was larger, offset by a 5.3% jump in costs, Wetherspoon told shareholders.

It said this included a £46 million increase in wage costs for the year, after the national minimum wage was increased by 4.1% during the year.

Wetherspoon also reported a £31 million increase in repair costs, and its business rates bill lifted by £9 million to £42.6 million despite relief measures for pub operators.

The hospitality firm reported a 5.2% jump in total sales for the year, with like-for-like sales growth of 4.2%.

The increase was particularly driven by customers buying drinks, with bar sales up 6.1% year-on-year.

Food sales were 1.2% higher for the year, revenues from slot and fruit machines rose 7.4%, and it saw 1.3% growth from its hotel rooms.

More recent trading was buoyed by “exceptional weather”, helping like-for-like sales jump 8.6% in the nine weeks to September 27.

Wetherspoon said it benefited from “substantial progress” to increase the number of beer gardens and outside seating areas across its pubs.

Tim Martin, chairman of the business, said: “The hospitality industry, as many commentators and companies have noted, has borne the brunt of government-led tax and regulatory cost increases, especially in the last two budgets.

“This has resulted in pubs becoming even more expensive than supermarkets, leading to job losses, closures and high street dereliction.

“It is to be hoped that the powers that be will refrain from any further increases, since pubs and restaurants pay around 40% of their receipts as taxes of one sort or another – and provide immense financial support to the Treasury, as well as social support to the community.”