Higher costs eat away at JD Wetherspoon

11th Mar 2011 07:10

Pub group JD Wetherspoon posted record interim sales but profits fell as a 'pernicious combination of increasing taxes and regulation', higher costs and higher interest charges took their toll. Pre-tax profits for the six months to 23 January fell 11% to £32.2m, in line with market forecasts. Revenues rose by 7.6% to £525m from £488m. Operating profits were a new record of £49.6m but margins fell as costs rose. The dividend for the six months is 4p."The operating margin declined to 9.4% (2010: 10.0%) as a result of increased costs in a number of areas, including taxes, labour, utilities and bar & food supplies - pressures which are likely to continue into the next financial year," Wetherspoon said. "Sales and operating profits in the six months under review were at record levels, in spite of the pernicious combination of increasing taxes and regulation. Trading in the 6 weeks to 6 March 2011 continued on a similar trend to the first half of the current financial year, with like-for-like sales up 2.8% and total sales increasing by 7.9%," chairman Tim Martin added."Britain has now become a high tax and regulation environment for business, with the effects of this being seen in many thousands of closed pubs and other small businesses across Britain, as well as a marked increase in unemployment, " he said.Wetherspoon also announced it has filled its finance director vacancy with Kirk Davis, the interim finance director, getting the job on a full-time basis.