Wetherspoon Returns To Profit But Sales Still Lag Behind Pre-pandemic

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JD Wetherspoon has edged back into the black after supply chain issues eased and customers returned to its pubs for meals, despite the cost of living crisis. 
The pub chain group reported a pre-tax profit of £4.6million for the six months to the end of January, an improvement from a loss of £21.3million in the same period last year, but still far off the £50million profit it made in 2019.
Sales at the company chaired by Tim Martin also still lagged slightly behind pre-pandemic levels, falling by 0.6 per cent compared to the six months ending in January 2020, before Covid struck. 
Wetherspoons has returned to profit but sales are still slightly behind pre-Covid levels
But, compared to the six-month period ending in January 2019 - the last full financial year before the pandemic - like-for-like sales rose 5 per cent, with the company raking in £916million in half-year revenues.
Compared to pre-pandemic, people are spending less on pints, with drink sales dropping by 0.8 per cent, and more on food, which is up 12 per cent. 
Slot machine and hotel room revenues are also in demand, which have seen rises of 44 per cent and 13 per cent, respectively. 
Sales kept improving in the most recent seven weeks, with like-for-like sales  9.1 per cent ahead of the same period in 2019 and 15 per cent higher than last year.
RELATED ARTICLES Share this article Share Chairman Tim Martin said: 'Having experienced a substantial improvement in sales and profits, compared to our most recent financial year, and with a strengthened balance sheet, compared both to last year and planet88 to the pre-pandemic period, the company is cautiously optimistic about further progress in the current financial year and in the years ahead.'
Martin added that supply chain issues that had plagued the sector during the pandemic and after countries reopened had now 'largely disappeared'.
However, he flagged 'ferocious' inflationary pressures, particularly in respect of energy, food and labour.
This week, , driven by surging food and drink costs in pubs and restaurants. 
Food and non-alcoholic drinks prices rose by 18.2 per cent, the largest annual rise since 1977, up from 16.8 per cent in January. 
'The Bank of England, and other authorities, believe that inflation is on the wane, which will certainly be of great benefit, if correct,' Martin said.
Rising costs have have eaten into the company's operating margin, which was just just 4.1 per cent in the half-year, compared to 7.1 per cent prior to the pandemic.
Wetherspoons, which runs 843 pubs in the UK and Ireland, closed or sold 10 pubs in the period and invested £48million in pub extensions and technology.
The group has also managed to pay down some of the debt incurred during the pandemic, with the current level of net debt standing at £744million compared to £920million the previous year. 
This leaves the chances of a reintroduced dividend or share buyback programme 'at virtually nil, until such time as there is a firmer f Affiliate links: If you take out a product This is Money may earn a commission. This does not affect our editorial independence.