JD Wetherspoon PLC (LON:JDW) appeared to have shrugged off worries around a shortage of CO2 as the pub chain reported a steady climb in like-for-like (LFL) sales toward the end of its financial year.
In a trading update, the FTSE 250 group reported that LFL sales for the 10 weeks to July 8 had risen 5.2% and total sales by 5.6%, while in the year to date LFL sales had climbed 5.2% and total sales 4.2%.
READ: CO2 shortages could leave Britain facing a World Cup beer drought this summer
The company also said it had opened 6 new pubs and sold 23 since the start of the financial year, spending £15.6mln on buying freehold “reversions” in addition to £9mln in exceptional, non-cash losses expected for the full-year due to pub disposals which were below the value of its balance sheet.
Regarding the rest of its financial position, the firm said it expected net debt for the end of the year to be around £740mln, with £51.6mln spent in share buybacks over the first quarter.
In its outlook for the coming year, Wetherspoons chairman Tim Martin dished out another batch of his famous Brexit rhetoric, saying that the company had started to review its product range to swap European products such as French champagne and German wheat beer for UK, Australian, US alternatives in preparation for the UK’s exit from the bloc.
READ: Zut Alors: Wetherspoon's to shun French champagne and sell more British and non-European drinks
He added that leaving the EU would allow the UK to “adopt the approach of countries like Singapore, Hong Kong, Switzerland and Australia by dismantling these tariff walls, which improves general living standards.”
Regarding the company itself going forward, Martin said trading for the current financial year was anticipated to be in line with expectations, although the coming year was expected to bring “considerable” cost increases in areas such as business rates, the sugar tax, utility taxes, and wages.
In a note to clients, analysts at City broker Liberum commented: "JDW is on course to deliver LFL sales growth of at least 5.2% for [the end of the 2018 financial year] - with the final quarter benefiting from c1.5% weather/World Cup boost. Additionally, the gap between LFL and total sales growth has narrowed, which we find encouraging.
They added: "The key question is how sustainable this sector LFL out-performance is against fierce competition, unrelenting cost inflation and now, a step-up in interest costs."
In mid-afternoon trading Wednesday, Wetherspoons shares were up 3.8% at 1,292p.
-- Adds broker comment and updates share price --