JD Wetherspoon reports rise in profits as breakfast trade soars
Pub operator JD Wetherspoon has announced that it is to start opening its pubs at 7am, as it brought cheer to the sector with a 41% rise in pre-tax profits for the first half of the year.
The company started opening its pubs at 9am five years ago and said it now sold around 275,000 breakfasts per week and around 500,000 coffees and teas. The move is seen as an attempt to move further into the breakfast market currently dominated by the likes of Starbucks and McDonalds.
Pre-tax profit for the six months to 24 January 2010 stood at £36.2m, compared to £25.6m in the previous year. Meanwhile turnover climbed 4% to £488.1m, although like for like sales were up by just 0.1%.
The company said that trading in the six weeks to 7 March 2010 continued "on a similar trend to last year", with like for like down 0.4% and total sales increasing by 3.9%.
Commenting on the results, JD Wetherspoon chairman Tim Martin said: ""Sales and profits in the six months under review were at record levels, notwithstanding the immense pressure on the pub business from government legislation, thanks, above all, to the great efforts of all of our staff.
"Record first-half profits, a successful refinancing and the reinstatement of a dividend."
The company also released details of its re-financing package, which sees it take on a new £530m, four-year banking facility with a syndicate of 11 banks. The package, which is expected to give the pub operator a war chest to fund its estate expansion, replaces an old facility of £435m, which was due to expire at the end of 2010.
And it attacked the Government's attempts to crack down on ‘binge drinking'. In his chairman's statement, Martin said: "In our opinion, this has had counterproductive consequences in several ways. On a practical level, excessive penalties for pubs which inadvertently sell alcoholic drinks to those under 18 are unfair, since most parents permit 16- and 17-year-olds to use pubs."
And he warned that the red tape involved in ID checks along with increased taxes "have contributed to pubs' closing in unprecedented numbers in recent years, with a devastating reduction of many communities' social life."
He also called new Government "two strikes and you're out" policy, which has seen it instruct police to recruit under-18s to attempt to buy alcohol in pubs under police supervision as an "astonishing error of judgement".
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