JD Wetherspoon has reported an increase in profits but is wary of a tough year ahead.
The popular pub chain posted a 36.1 percent rise in pre-tax profit to £54.3 million in the six months to 28 January. Revenue for the group rose 3.6 percent to £830.4 million.
Despite the strong results, the chain remains cautious about the next six months.
“The company anticipates higher costs in the second half of the financial year, in areas including pay, taxes and utilities,” said Wetherspoon boss Tim Martin.
“In view of these additional costs and our expectation that growth in like-for-like sales will be lower in the next six months, the company remains cautious about the second half of the year.”
Known as a strong Brexiteer, Martin said that if prices rise once the UK has left the EU, he would simply switch to local alternatives.
“Most economists who criticise Brexit use hypothetical arguments, but, in the real world, the UK can eliminate import taxes, improving living standards and simplifying the Byzantine tax system – both of these factors will improve the outlook for consumers and businesses in the UK,” he said.
The restaurant market faces a troubling time as many chains including Prezzo, Jamie’s Italian and Byron have announced closures.
“I think that a lot of trendy-type, restaurant-type companies have all opened up at around the same time in the last ten years, pay huge rents and the glitter has worn off a bit and they’ve suffered a backlash from customers,” said Martin.
“In the more prosaic world of Greggs (LON: GRG) or McDonald’s (NYSE: MCD) or Starbucks (NASDAQ: SBUX), I think things are going reasonably well.”
Martin also criticized the new sugar tax on fizzy drinks that will come into play next month.
“Jamie Oliver’s sugar tax, which he got us to pay but couldn’t pay himself,” he said, adding that the tax has already cost his company about £3 million.