* Sales of coffee, real ale and gin boost results
* J D Wetherspoon keeps drink prices low
* Costs remain high
(Adds further CEO quotes)
By Noor Zainab Hussain and Paul Sandle
LONDON, Sept 13 (Reuters) - J D Wetherspoon's
eurosceptic boss said customers were unfazed by political
wrangling over Brexit after the pub group reported a rise in
full-year sales and profit thanks to demand for products from
pink gin and coffee to breakfast and beer.
Britain's Wetherspoon, like most pub and restaurant chains,
has been battling increased costs due to a minimum wage hike,
higher property prices and power bills. It has also been
investing in its more labour-intensive food and coffee business.
It has, however, managed to attract patrons to its nearly
900 pubs in Britain and Ireland as it keeps drinks prices low,
such as its latest move to sell a pint of Ruddles bitter for as
little as 1.39 pounds ($1.73) in some locations.
Pretax profit after exceptional items rose to 95.4 million
pounds ($118.5 million) for the year ended July 28 from 89
million pounds a year earlier, although before exceptional
items, it fell 4.5% to 102.5 million pounds.
"Costs were quite high as we invest in the business and
gardens and kitchens and people," Chairman Tim Martin, a vocal
Brexiteer, told Reuters.
Total sales rose 7.4% to 1.82 billion pounds, while
like-for-like sales rose by 6.8%, with a jump in bar and food
sales.
Martin, one of the most prominent Brexit backers in British
business, said he currently anticipated a "reasonable outcome"
for the current year.
The British government outlined its worst-case scenario if
the country leaves the European Union at the end of October
without a deal, including snarl-ups at the ports and a shortage
of some fresh foods in a document released on Wednesday.
Supermarket bosses have voiced similar concerns about the
impact on supply chains and costs.
Martin, who said leaving without a deal would enable Britain
to eliminate tariffs on more than 12,000 non-EU products, said
such claims were politically motivated.
"I think they are just remainers, I think that's what it
is," he said. "You've had a whole year of different people
saying food prices are going to rise if we leave the EU, it's
counter-intuitive to put it mildly.
"If you eliminate tariffs on food, prices can't go up."
Similar gloomy predictions had been made when Britain did
not join the euro, he said, "but the public didn't fall for it".
"I don't think any more people really do believe there's
going to be massive delays at ports," he said.
Wetherspoon has replaced some products in its pubs that
traditionally come from EU countries with domestic equivalents
or from other countries, such stocking English sparkling wine.
"Anything you buy from the EU you can buy from the rest of
the world or the UK," Martin said.
PINK GIN WITH STRAWBERRIES
Wetherspoon's like-for-like sales rose 5.9% for the six
weeks to Sept. 8. Martin said growth had come from the sale of
coffee, real ale and also gin.
"Everyone is drinking gin. Even the guys from the building
sites down the road are drinking pink gin with strawberries," he
said.
Senior market analyst Fiona Cincotta at Cityindex said the
company had fared a lot better than many of its rivals.
She warned however that the rate of sales growth had slowed,
putting more pressure on the company's already-thin margins.
"J D Wetherspoon may be attracting plenty of people into its
pubs but it's luring them with such cheap prices that its
margins have deteriorated," she said.
Wetherspoon has largely grown organically, often opening
pubs in locations such as former banks and cinemas.
The wider British pub sector is brimming with deals, with
Greene King set to be bought by Hong Kong's Ck Asset
for 4.6 billion pounds, while Slug and Lettuce pub chain owner
Stonegate has agreed to buy Ei Group for 1.27 billion
pounds.
($1 = 0.8048 pounds)
(Reporting by Noor Zainab Hussain and Tanishaa Nadkar in
Bengaluru and Paul Sandle; Editing by Jan Harvey and David
Evans)
