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JD Wetherspoon

JD Wetherspoon’s run of record of profits set to come to an end despite sales surge

As investors have come to expect, sales are once again well up at the pubs group, but soaring costs mean annual profits will likely fall below what was achieved last year

jd wetherspoon chairman tim martin
‘Spoons has delivered record profits in each of the past three years

No-frills pub chain JD Wetherspoon PLC (LON:JDW) still expects profits to fall slightly this year, despite sales continuing to soar over the past couple of months.

For the 10 weeks to 7 July, like-for-like sales, which strip out the impact of new and closed sites, jumped by 6.9%.

READ: 'Spoons' enjoy Q3 sales boom, but shares drop on margin worries

So far in ‘Spoons’ financial year, which runs until the end of July, like-for-likes are up 6.7%, while total sales have soared by 7.4%.

That’s much better than most of its rivals, with Greene King PLC (LON:GNK) recently reporting a 1.8% rise in revenue, and Marstons PLC (LON:MARS) and Fuller Smith & Turner PLC (LON:FSTA) nearer to 5%.

But a surge in costs, particularly staff wages, means Wetherspoons’ top-line growth is unlikely to translate into higher profits when the company reports its full-year results in September.

No record profit this time around

Back in November, when it revealed it was upping pay for all of its workers, the FTSE 250 group said it expected “a trading outcome slightly below that achieved in the previous financial year”.

In Wednesday’s update, chairman Tim Martin, alongside his usual Brexit spiel, said this expectation remains unchanged.

That would bring to an end a run of impressive results for ‘Spoons, which has delivered record profits in each of the past three years.

Quick facts: JD Wetherspoon

Price: £16.15

Market: LSE
Market Cap: £1.7 billion
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