JD Wetherspoon sees increased sales thanks to Olympics, plagued by stealth taxes

DividendMax Ltd.

JD Wetherspoon sees increased sales thanks to Olympics, plagued by stealth taxes

FIRST QUARTER TRADING UPDATE

JD Wetherspoon plc ('JD Wetherspoon' or the 'Company'), which is holding its Annual General Meeting later today, announces its Interim Management Statement, as required by the FSA's Disclosure and Transparency Rules.

Current trading

In the first quarter (13 weeks to 28 October 2012), like-for-like sales increased by 7.1% and total sales increased by 11.1%, helped by a strong performance during the Olympics and Paralympic games. We do not expect this level of sales growth to be sustained for the rest of the financial year. 

The operating margin was 8.6%, approximately 0.4% lower than the last financial year, due to increases in costs in areas such as tax, utilities, labour and bar and food supplies, combined with increased marketing costs.

Property

The Company opened two new pubs in the quarter under review and currently has eight pubs under development. It remains our intention to open approximately 25 pubs in the current financial year.

Financial position

There have been no significant changes in the Company's overall financial position, since the publication, on 16 October 2012, of the annual report and accounts for the year ended 29 July 2012.

Outlook

As indicated in our annual results announcement, the main challenges for the pub industry are the VAT disparity between supermarkets and pubs, combined with the continuing imposition of stealth taxes (which apply to pubs but not to supermarkets) such as the late-night levy and the increase in fruit/ slot machine taxes. In spite of these challenges our sales, profit and cash flow remain resilient and the board continues to aim for a reasonable outcome in the current financial year.

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