JD Wetherspoon PLC (LSE:JDW) boss Tim Martin has never shied away from using the company’s financial reports to speak his mind, and this time it’s no different.
Perceived VAT inequality between the pubs and supermarkets was a prominent theme in the results.
Wetherspoon’s annual statement read: “It does not make economic sense for the tax system to favour mainly out-of-town supermarkets over mainly high-street pubs.
“This imbalance is a major factor in town centre and high street dereliction.”
There is a genuine disparity between the VAT treatment of both sectors- pubs, clubs and restaurants must pay 20% VAT on food sales, while supermarkets pay none.
The pandemic also remains a bugbear for Martin.
“The company continues to be concerned about the possibility of further lockdowns and about the efficacy of the government enquiry into the pandemic, which will not be concluded for several years,” he said in the annual update.
There is not currently an indication from the government that another bout of lockdowns are on the agenda.
Wetherspoon also lashed out at the state of UK corporate governance: “Wetherspoon has been a strong critic of the composition of the boards of UK-quoted companies.
“The combination of arbitrary rules, the preponderance of part-time directors and overloaded institutional governance departments means that bureaucracy and virtue-signalling, rather than innovation and efficacy, dominate most UK PLC boardrooms.”
Wetherspoon also highlighted recent press reports that Labour is considering a potential tightening of pubs’ licensing hours.
“The effect of reducing pub opening times would certainly further reduce on-trade consumption, but that reduction is likely to be replaced by ‘off-trade’ consumption at home and in other ‘unregulated’ environments,” Wetherspoon said in response.
Public health minister Andrew Gwynne has denied that Labour is seeking to limit opening hours.
These issues aside, Wetherspoon has made a formidable post-pandemic return, at least on the top line.
Sales reached £2.04 billion in financial 2024, beating pre-pandemic levels of £1.82 billion in 2019, despite operating with 79 fewer pubs than before the pandemic.
Profit before tax climbed to £73.9 million, a significant improvement from 2023's £42.6 million, though still trailing the £102.5 million reported in 2019.
Its 2024 operating margin was approximately 6.85%, compared to 7.25% in 2019.