Last updated: July 15, 2009 5:25 pm

Wetherspoon sees profits at top end of range

JD Wetherspoon, the pub operator, said attention to costs would enable its annual profits to withstand a like-for-like sales decline in early summer.

Wetherspoon was the first of a trio of pub groups to issue updates, with Mitchells & Butlers and Enterprise Inns following on Thursday.

Keith Down, Wetherspoon financial director, said pre-tax profit for the year to July 26 would roughly match the £64m predicted by the most bullish analysts because energy, labour and marketing costs were lower than forecast. The guidance prompted some analysts to lift their forecasts.

The group’s sales in the 11 weeks to July 12 rose 3.1 per cent, but when the effect of new openings was removed, like-for-like sales were down 0.8 per cent.

Wetherspoon blamed the decline on a tough comparison with the same period of 2008, when sales were lifted by a marketing campaign offering cheaper prices for drinks and food.

Mr Down added that trading at Wetherspoon’s large indoor venues was not usually affected by the weather. Other pub groups boasting substantial numbers of beer gardens are likely to have been boosted by the warm start to the summer.

Mark Brumby, an analyst at Astaire, said the headline like-for-like sales figures “may disappoint some observers” but should be taken in the context of last year’s marketing campaign.

Matthew Gerard of Investec, broker and adviser to Wetherspoon, increased his full-year underlying profit forecast by 2 per cent to £64.8m, describing the group’s margin expansion and sales performance over the year as “commendable”.

Mr Down confirmed that Wetherspoon was in the process of completing the purchase of seven sites currently used by the Chicago Rock Cafe brand. The group has so far opened 33 pubs and disposed of two sites in its current financial year.

Wetherspoon shares which have more than doubled over the past year fell 4p to 425p.

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