Interim sales rise at JD Wetherspoon

JD Wetherspoon, which courted controversy earlier this month with the introduction of a 99p pint, has seen sales growth in the first six months of its financial year.

In the 25 weeks to 18 January 2009, like-for-like sales were 2% ahead of last year and 6.5% ahead if recent openings are factored in.

It's January pint and meal promotion seems to have paid off also despite criticism, with like-for-like sales in the last two weeks up 6.4%.

Like for like sales over the Christmas period (12 weeks to 18 January), increased by 2.6% compared with growth of 1.5% a year ago.

However, the pub company’s margins for the half year ending 25 January 2009 are expected to be approximately 1% lower than last year as price-cutting on the high street amongst rivals intensifies.

Wetherspoon has opened 21 pubs this financial year and disposed of one bringing its total operated to 714.

Although the company remains confident of its prospects in 2009, and has recently singed a new electricity contract that will bring significant savings, it has decided to reduce capital expenditure on new openings and halt its dividend.

Wetherspoon said this was to cover the possibility of having to pay back a £130m private placement – a form of security – that is up for renewal in September 2009 with cash and its existing facilities, as the credit crunch meant a refinancing of the placement couldn’t be guaranteed.

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By Daniel Thomas

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