(Alliance News) - JD Wetherspoon PLC on Wednesday said food and drink sales rose in the first half of its financial year, but warned about the impact of rising costs imposed on the business.
The Watford-based company, which owns and operates 796 pubs across the UK and Ireland, reported sales growth of 4.0% for the six months ending January 26.
Like-for-like sales rose by 5.1% in the 25 weeks that ended the past Sunday. Like-for-like sales in the final twelve weeks of the period were up by 4.6%, boosted by a 6.1% rise during the main three-week festive period.
Bar, food and slot/fruit machines all saw like-for-like sales increases during the 25-week period, by 4.5%, 5.6% and 12%, respectively. Hotel room sales were down by 6.5%, however.
Wetherspoon added that it opened two new pubs during the period, in Marlow, Buckinghamshire and at Waterloo station, and plans to open a further seven pubs by the end of the financial year.
The company also sold six pubs, bringing in GBP4.1 million in cash, and currently has a trading estate of 796 pubs. The sold pubs are the reason why total sales are below like-for-like sales.
However, Wetherspoon said debt levels are expected to widen to between GBP680 million and GBP700 million by the end of the year from GBP660 million last year, due to rising costs.
The pub operator said that labour-related costs are set to rise by around GBP60 million per annum from April 1 as a result of the UK budget.
Looking ahead, Chair Tim Martin said Wetherspoon remains confident of a "reasonable outcome" for the year, despite these increased costs.
Wetherspoon shares were down 1.6% at 601.92 pence per share.
By Lydia Doye, Alliance News reporter
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