Wetherspoon warns on tax as profits fizz up

12th Sep 2014 07:23

Pub chain JD Wetherspoon served up record full-year revenues and and profits and said sales in the last six weeks were up 6%, although it warned of a risk to the pub industry from rising taxes. Wetherspoon said pre-tax profit before one-off items in the 52 weeks to 27 July rose 3.1% to £79.4m on a 10% lift in revenue to £1.41bn.Pub grub drove a 5.5% increase in like-for-like sales, with food sales rising by 12% and bar sales rising 2.7%, offset by a 3.1% fall in slot and fruit machine takings.Operating margins before exceptional items fell to 8.2% from 8.7% a year ago, mainly as a result of increases in staff costs and repairs.In Camra's 2015 Good Beer Guide, 317 of the group's pubs were recommended for the quality of their real ale, which Wetherspoon said was more than any other pub company.The group paid £29.2m in bonuses and free shares to its 34,000-strong workforce in the year, slightly more than the previous year, of which 96% was paid to staff below board level and 82% went to staff working in pubs.But chairman Tim Martin sounded another warning about tax, saying supermarkets selling wine and beer had an unfair advantage because they do not face the taxes paid by the licensed trade."The biggest danger to the pub industry is the VAT disparity between supermarkets and pubs," he said. "A similar danger relates to the general tone of corporate governance advice and practice which has helped to create unstable board rooms, often preoccupied by the wrong considerations."For example, many do not even recognise the danger from the VAT disparity, despite the high weekly level of pub closures which has lasted for many years."