Pub’s cautious trading update
PUB chain owner JD Wetherspoon today cautioned that it would take longer than expected for trade to bounce back from the smoking ban.
But chief executive John Hutson said, long-term, it was a positive step towards changing pub culture in the UK.
He also revealed that there were growing opportunities for Tees Valley brewers to supply the chain, which owns nine pubs in the region, as cask ale sales growth outperformed nearly every other drinks category, reaching a record two million pints in 2007.
Announcing turnover up 0.4% to £440.2m on operating profit down 4% to £44.4m, Mr Hutson said the pub industry was in unchartered territory following the introduction of the ban, the first seven months of which coincided with the company’s first half year results to January 27.
“Nobody has been in this situation before. We would like to think sales would improve through the second half, but we would rather live in reality than hope.
“At this stage our results are broadly in line with what we expected. Having said that, we are sounding a note of caution because, given the effort we put in, we hoped they would be turning around a little quicker than they are,” said Mr Hutson.
With 60% of the business generated from sit-down meals, rising catering costs had eaten into margins.
“We have done our best to offset these increases over the past 12-18 months, but they will have an impact on margins in the second half, although we still think it will be in the nine point something region,” he said.
