Wetherspoons has warned that "ferocious" inflation is hitting its business despite reporting a post-pandemic return to profit. The popular pub chain reported a half-year pre-tax profit of £4.6m, up from a loss of £26.1m in 2022, and said that sales in the seven weeks to March 19 had climbed 14.9% on the previous year.
Sales were up 9.1% on the pre-pandemic levels of 2019, but despite the upturn profits were still 90% down on the £50.3m over the same period in 2019. Chairman Tim Martin said he looked forward to "ferocious" inflationary pressures easing across the pub industry as revenue rose to £916m ($1.1bn) in the period compared to £807.4m a year ago.
The business, which has been exposed to rising costs for energy, food and labour, said it opened two pubs during the first six months of 2022 and sold or closed 11, leaving a trading estate of 843 pubs.
Mr Martin said: "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.
“Having experienced a substantial improvement in sales and profits, compared to our most recent financial year, and with a strengthened balance sheet, compared both to last year and to the pre-pandemic period, the company is cautiously optimistic about further progress in the current financial year and in the years ahead,” he added.
The positive half-year results helped JD Wetherspoon shares climb six per cent (35.8p) to their highest level since last summer at 616.9p.
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Mr Martin, a pro-Brexiter, also dismissed claims that the UK's departure from the EU was to blame for recent supply chain issues. He said: "Supply or delivery issues have largely disappeared, for now, and were probably a phenomenon of the stresses induced by the worldwide reopening after the pandemic."
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