JD Wetherspoon Q1 Sales Rise
Pub operator JD Wetherspoon Plc has posted higher first-quarter total sales as customers spent more money at its nearly 900 pubs across Britain and Ireland. The company has seen higher demand for p...
Pub operator JD Wetherspoon Plc has posted higher first-quarter total sales as customers spent more money at its nearly 900 pubs across Britain and Ireland.
The company has seen higher demand for pink gin, coffee, real ale, breakfast and beer, even as Britain is witnessing a move away from drinking by millennials.
Wetherspoon, which expects full-year performance in line with its previous expectations, said that total sales rose 5.6% for 13 weeks that ended on October 27.
Stifel analysts said that they forecast full-year like-for-like sales growth of 4.5% and pre-tax profit of £89 million.
The company, like most pub and restaurant chains, has been battling increased costs due to a mandatory minimum wage hike, higher property prices and power bills. It has also been investing in its more labour-intensive food and coffee businesses.
Last week, Britain's plan to raise the minimum wage to £10.50 an hour was endorsed by an independent review, which found that setting a floor on pay had a negligible effect on job creation.
Companies are now likely to see wage costs rise after next month's snap national election whatever the outcome, further threatening cost levels at restaurants and pubs.
Pub Sector Deals
But the wider British pub sector is brimming with deals, with Greene King having been bought out by Hong Kong's CK Asset for £4.6 billion and Slug and Lettuce pub chain owner Stonegate agreeing to buy Ei Group for £1.27 billion.
JD Wetherspoon's like-for-like sales rose 5.3%, which Stifel analysts called well ahead of the sector.
"This is a strong start to the year in our view, ahead of our forecast revenue growth of 4.0% for the full year, but we are mindful of the early stage of the year, challenging market backdrop...and potential changes to national living wage," Investec said in a note.
News by Reuters, edited by Hospitality Ireland.
Corporate Governance Code
In other Wetherspoon-related news, the company's chief executive, Tim Martin, has spoken out against some of the firm's largest institutional shareholders and the proxy advisers who advise shareholders because they pointed out that several Wetherspoon non-executive directors are not compliant with the corporate governance code.
Martin believes that the code effectively fills boards with directors who do not know a lot about the companies that they run, as reported by The Irish Times, which quotes Martin as saying, "There can be little doubt that the current system has led to the failure or chronic underperformance of many businesses".
Martin also said that some of his critics do not themselves meet the terms of the code to which they want to hold him.
Article by Dave Simpson. Click subscribe to sign up for the Hospitality Ireland print edition.