The boss of JD Wetherspoon PLC (LON:JDW) has slammed the Chancellor by claiming that his speech on Wednesday was a “budget for dinner parties”, doing nothing for the struggling pub industry.
Tim Martin, the pub chain’s chief executive, was referring to the £1,000 Philip Hammond pledged to give most pubs as a special discount on their business rates bills this year.
That’s only for pubs with a rateable value of less than £100,000 and although the Chancellor claims that means 90% of UK boozers stand to benefit, ‘Big Tim’ wasn’t happy.
“That sum [the £1,000 discount] is dwarfed by tax and regulatory increases,” Martin said in the group’s half-year report.
“Companies like Wetherspoon, on examination of the fine print of the budget, are not, in fact, eligible for the £1,000 per annum decrease in business rates, in any event.”
“In effect, this was a budget for dinner parties, no doubt the preference of the Chancellor and his predecessor,” Martin added.
As has become a common theme in Wetherpoon statements, Martin mentioned the apparent special treatment received by supermarkets compared to pubs.
Wetherspoon’s results might cheer up its boss, with the company posting steady growth across the board.
For the six months to 22 January 2016, Wetherspoon saw like-for-like sales rise 3.3%, which helped to push up overall revenues to £804.1mln, a 1.4% increase from the £790.3mln it posted a year earlier.
The biggest jump came in pre-tax profits though, which soared 43% to £51.4mln (2016: £36mln).
That figure was buoyed by an improved operating margin (8.1% compared to 6.3% in 2016), as well as lower utility and interest costs, Wetherspoon said.
The Watford-headquartered firm maintained the 4p interim dividend it paid out last year.
Net debt increased to £696mln in the period, an increase of £45.2mln, although the net-debt-to-EBITDA ratio actually fell slightly to 3.46 times.
While these levels are justifiable in an era of low interest rates, Wetherspoon told investors that “debt levels of between 0 and 2 times EBITDA are a sensible long-term benchmark”.
As for its outlook, the company – founded in 1979 – said it “remains cautious about the second half of the year”, but given the slightly better-than-expected sales so far, it reckons full-year trading could come in “slightly” ahead of management expectations.
Shares closed at 957p on Thursday.