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FY losses narrow
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FY operating costs double
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Shares up as much as 13.4%
Oct 7 (Reuters) - British pub operator J D Wetherspoon's annual loss narrowed significantly from a year ago thanks to cocktail and spirit-drinking youngsters, lifting its shares on Friday.
Pubs, restaurants and hotels in Britain, still recovering from COVID pandemic restrictions, are now grappling with rising costs of everything from labour and ingredients to energy, and lower consumer spending as inflation rockets.
Young people have been quicker to return to its 852 pubs, Wetherspoon's Chairman Tim Martin told Reuters.
"Young people have been in celebratory mood since restrictions ended," he said. "The older generation have been slow to take up their old habits, but are slowly returning to the bar, thank goodness."
Martin said sales of cocktails and spirits favoured by younger customers were "shooting the lights out".
And while draught beers and ciders of all types were still under pressure, their performance was slowly improving, he said.
Like-for-like sales for the first nine weeks of the new fiscal year to Oct 2 were 10.1% higher than the same period last year.
Shares in the company surged as much as 13.4% and were up 10.9% at 485.4 pence at 1030 GMT. They remain 49% down since the beginning of the year.
The pub group, often referred to simply as "Spoons", still reported a loss of 30.4 million pounds ($33.94 million) for the year ended July 31, but that had shrunk from a 154.7 million loss last year.
The group's operating costs, however, nearly doubled and last week, rival Mitchells & Butlers warned of tighter margins because of higher costs.
Wetherspoon's has been closing its smaller pubs and opening larger ones to draw bigger crowds. The group sold 15 pubs and put 32 more up for disposal as of end-July. Worries over the hit from restrictions during the pandemic still loom large and Martin, who has been an outspoken critic of Britain's handling of the pandemic, said in a statement "the biggest threat to the hospitality industry is the possibility of further lockdowns and restrictions."
