UK: JD Weatherspoons issues tax warning despite record FY sales
- FY net profits up 4% to GBP46m (US$72.9m)
- Net sales in year to 28 July up 7% to GBP1.28bn
- Operating profits down 2.5% to GBP91.5m
The UK on-trade has seen falling beer sales
UK pub chain JD Weatherspoons has posted record full-year sales, but warned that high taxes are continuing to hamper the industry as a whole.
Net profits in the 12 months to 28 July were up by 4% year-on-year to GBP46m (US$72.9m), the company said today (13 September). Net sales rose by 7% to GBP1.28bn over the same period, beating last year's previous high of GBP1.2bn. Operating profits were down, however, by 2.5% to GBP91.5m.
Exceptional items totalling GBP19.8m before tax dragged down profits, with impairment charges coming in twice as high as those of last year, the company said. However, the firm benefited from a number of court cases that included one out-of-court settlement in its favour of GBP1.25m.
Tim Martin, the chairman of Wetherspoons, said: “I am pleased to report another year of progress despite having paid GBP551.5m in taxes during the year and rewarding staff with GBP28.6m of bonuses. Our post-tax profit increased by GBP7.9m, yet our taxes paid increased by GBP32.2m.”
Martin said the pub chain will join in an upcoming 'tax-parity day', during which Weatherspoons outlets will offer a one-day 7.5% reduction in prices to publicise differences in the way supermarkets and pubs are taxed.
“It is unsustainable to have far higher taxes for the pub industry than those for supermarkets,” Martin said. “Already, 10,000 pubs have closed and many others are suffering, through insufficient investment.”
Despite falling beer sales in the UK on-trade - down 5.8% year-on-year between April and June - Weatherspoons said it opened 29 pubs in the financial year, bringing its total to 886.
Martin said the company is “aiming for a reasonable outcome in the current financial year”.
“In the six weeks to 8 September, like-for-like sales increased by 3.6%. In the last fortnight, like- for-like sales were 2.5% - and this level may be an indicator for future sales growth,” he said.
JD Weatherspoons share price dropped by 10% when the market opened today. It has since recovered and is slightly up on yesterday's closing price.
To read the company's official statement, click here.
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