JD Wetherspoon PLC (LON:JDW) has reported an increase in first-half like-for-like (LFL) sales but gave a cautious outlook for the second half, accompanied by the usual helping of Brexit rhetoric from chairman Tim Martin.
The FTSE 250-listed pubs chain reported LFL sales increases of 6.1% in the 26 weeks to January 28, with pre-tax profits before exceptional items jumping by 21% to £62mln.
READ: Wetherspoon froths higher on better-than-expected first-half sales
Wetherspoon's said, since the period end, LFL sales in the 6 weeks to 11 March 2018 were up 3.8%, but added that it expects higher costs in areas including pay, taxes and utilities to lead to lower LFL sales growth in the second half
The firm added, as a result of slightly better than expected year-to-date sales, they anticipate an unchanged outcome for the current financial year.
The group maintained its interim dividend at 4p.
Aside from the financials, Wetherspoon’s chairman Tim Martin dished out a large helping of Brexit rhetoric in his statement, saying that organisations such as “the CBI and the BRC, supported by the FT, the Sunday Times, the Guardian, the chairmen of Whitbread and Sainsbury's and others, have misled the public by saying that food prices will automatically rise if we leave the EU without a deal.”
The statement echoes similar remarks made in a company trading update in November when Martin claimed Wetherspoons had calculated that the UK scrapping tariffs on food imports from both inside and outside the EU would reduce the cost of one of its meals by 3.5p and one of its drinks by 0.5p.
In a note to clients, Richard Hunter, Head of Markets at Interactive Investor, said: "Wetherspoon has been a rare success story on the UK High Street in recent years, as its finely priced and simple offering has captured the imagination of the cost-conscious consumer."
"There are, however, some less palatable indicators, not least of which is a very guarded outlook from the company for the second half. The potential for extra World Cup income which provides a boost to many other retailers does not necessarily apply to Wetherspoon, whilst it fully expects to be battling with higher costs over the period. Although the full year outlook remains unchanged, these comments are somewhat troubling. Meanwhile, from an investment perspective, the current and projected yield of 0.9% is paltry, even if investors have been compensated by growth" he added.
Wetherspoon shares were down 2% Friday morning at 1,265p.
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