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JD Wetherspoon dishes out another strong dose of sales and Brexit rhetoric
Pub operator JD Wetherspoon reported another strong quarter of growth and chairman Tim Martin served up another robust dose of rhetoric on the subject of food and drink prices post-Brexit.
Like-for-like sales bubbled up 6.0% in the first 12 weeks of the second quarter to 21 January, with total sales up 4.3%.
Following the first-quarter LFL sales of 6.1% and total sales of 4.3%, the 25 weeks of the financial year so far have seen LFL sales grow 6.0% and total sales 4.3% as three pubs have been opened out of the year's planned 10, with 10 sold.
As a result of better-than-expected sales, Martin said underlying profit before tax is slightly ahead of expectations.
But he said a similar outperformance in the second half will be more difficult to achieve as the comparative periods from the previous year are stronger.
Wetherspoon's has spent £15m on buying the freeholds of pubs of which we were previously tenants and has bought back £51m of shares in the financial year.
By the year-end, net debt is expected to be around £30m higher year-on-year.
Martin's latest Brexit-related missive is another diatribe on the "extremely pessimistic forecasts" about a rise in food prices post-Brexit, in a thinly veiled piece of government lobbying.
His argument that food prices will fall post-Brexit, however, seems to rely entirely on parliament "taking sensible steps", such as voting to eliminate the taxes that are currently imposed on non-EU food imports.
Martin said the customs union keeps food prices at artificially high levels.
He said Wetherspoon had calculated that leaving without a deal would result in food prices in its pubs falling by an average of about 3.5p per meal and bar prices falling by about 0.5p per drink. Similar reductions are likely for supermarket purchases too. For example, the current EU tariffs on popular Aussie wines would come to an end.
"By refusing to acknowledge the fact that food prices will be reduced, post Brexit, if the UK leaves the EU without a deal and parliament votes to eliminate taxes which are currently imposed on non-EU food imports, the CBI and the BRC are trying to fool the public and MPs and bringing business into disrepute," Martin said, providing a more detailed appendix alongside quarterly results where journalists at the Guardian, Financial Times and Sunday Times .
"These factually incorrect scare stories seem to be designed to convince the public that a deal is necessary to avoid a 'cliff edge'. In fact, the cliff edge is a myth. There is almost no action needed, for most companies, if the UK leaves the EU without a deal. Provided that parliament takes sensible steps, such as the elimination of food taxes, the public will benefit from lower food prices, from regained fishing rights and from savings of about £200m per week of EU contributions."