Chairman Tim Martin reported that JD Wetherspoon’s annual like-for-like sales rose by 5.8%, with a 6.3% increase in the profit before tax. The firm also kept its 12p dividend in place.
Mr Martin also highlighted the spiraling tax costs being incurred by the firm. Over the last year, JD Wetherspoon has had to pay £551 million in tax, equating to around £630,000 per pub. The company is unlikely to garner much public sympathy, especially as the social cost of drinking is increasingly under scrutiny.
It is understandable that the pub group have publicly supported Jacques Borel’s efforts to bring about parity in taxes being paid by pubs, restaurants and supermarkets, but it is debatable how successful the endeavour will be. With the public’s spending power continuing to be squeezed, there has been a notable consumer migration to purchasing alcohol from supermarkets, especially as it is often used as a loss leader to entice customers.
The shares have performed well over the last year and at their recent high were almost double May 2012 levels. IG clients, usually positive on the company, are currently 83% long.