JD Wetherspoon has seen its sales rise ahead of pre-pandemic levels and returned to a half-year profit.
The hospitality company, which runs 843 pubs in the UK and Ireland - including 65 in Scotland - reported a 5% increase in sales over the six months to 29 January, compared with the same period in 2019, and up 13% compared with the previous year.
Wetherspoon made a pre-tax profit of £4.6m, compared with a loss of £21.3m in the same period last year. But it was still a 90% decline compared with its pre-Covid figure of £50m in the first half of 2019.
The pub group has been heavily exposed to surging costs for energy, food and labour, which have hit the wider pub and restaurant industry particularly hard.
Chairman Tim Martin welcomed the possibility of inflation easing up, stating: “Inflationary pressures in the pub industry, as many companies have said, have been ferocious, particularly in respect of energy, food and labour.
“The Bank of England, and other authorities, believe that inflation is on the wane, which will certainly be of great benefit, if correct.”
Supply and delivery issues, which were also exacerbated during the pandemic, have “largely disappeared”, Martin said, adding that the problems “were probably a phenomenon of the stresses induced by the worldwide reopening after the pandemic, rather than a consequence of Brexit”.
The company said it is “cautiously optimistic” about progress this year having seen a substantial improvement in its sales and profits.
Charlie Huggins, head of equities at Wealth Club, commented: “Overall, while there are reasons for optimism, 2023 is shaping up to be yet another challenging year for Wetherspoons.
“Higher interest rates and inflation are strangling the economy, and leading to significantly higher costs for the group.
“Combine this with Wetherspoons’ low margins and low price strategy, it means the group faces an uphill battle in the current environment.”
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