JD Wetherspoon PLC (LSE:JDW) shrank its losses in the year to end-July, although its results remain below levels seen before the Covid-19 pandemic struck and lockdowns led to long periods of pubs being closed.
But the pubs chain said the sales trend is improving as it reported over 10% growth in like-for-like sales in the first couple of months of the current year.
In the year to 31 July 2022, Wetherspoons posted a pre-tax loss before exceptional items of £30.4mln, narrowing from a loss of £167mln in the same period last year, but significantly below the profit of £102.5mln achieved in pre-pandemic 2019.
Revenues rose to £1.74bn from £772.5 mln a year earlier, but were still 4.3% lower than the £1.8bn seen in 2019.
Tim Martin, Wetherspoon's outspoken founder and chairman, said it had been a challenge to persuade people to return to pubs after the lockdowns.
"During lockdown, dyed-in-the-wool pub-goers, many for the first time, filled their fridges with supermarket beer - and it has proved to be a momentous challenge to persuade them to return to the more salubrious environment of the saloon bar," he said.
"Even so, Wetherspoon's trading performance in FY22 improved versus the annus horribilis of FY21, but was still markedly adverse to pre-pandemic FY19."
Although like-for-like sales fell by 4.7% compared to FY19, the group said the sales trends improved during the year, with like-for-like sales falling 7.4% in the first half, down 4% in the third quarter and contracting by 0.6% in the fourth quarter.
The improved trend has continued into the current year, with like-for-like sales rising 10.1% in the first nine weeks compared with the same period last year.
The company said it opened seven pubs during the year and sold, closed or terminated the leases of 15 pubs. It had a trading estate of 852 pubs at the year end.
It is planning to sell a further 32 pubs, most of which are within a close radius of its other pubs.
Despite the downturn in profit and activity at the pub chain, it continued to increase investment levels, on the basis that the adverse effects of Covid-19 would eventually diminish.
Martin commented: "The company has improved its prospects in a number of ways in recent financial years - we own an increasing percentage of freehold properties; the balance sheet has been strengthened; interest rates have been fixed at low levels until 2031; we have a large contingent of long-serving pub staff and underlying sales are improving.”
But he warned that costs are rising.
"However, as a result of the previously reported increases in labour and repair costs and the potentially adverse effects of rises in interest rates and energy costs on the economy, firm predictions are hard to make," he said.
Wetherspoon shares were changing hands 10.1% higher at 481.40p on Friday morning.