JD Wetherspoon toasted “reasonable” first-half profits yesterday as the pub chain’s £1 million refurbishment of a landmark Broughty Ferry hotel neared completion.
The firm is set to create 60 full and part-time jobs when it reopens the doors to Jolly’s Hotel on April 1. It is one of between 40 and 50 new sites it expects to be open during the second half of the financial year.
The 24-bed property was one of the town’s most popular venues, but its doors have been shut since the summer of 2011 after its former owners got into financial difficulties.
Wetherspoon’s, which has 900 properties in its nationwide portfolio, used its interim results announcement to continue to fight the “tax disparity” between supermarkets and the licensed trade just days ahead of George Osborne’s Budget next week.
Chairman Tim Martin claimed there was a “growing realisation” that a level playing field with retailers would create more jobs and greater tax revenues, and praised the work of the VAT Club campaign led by lobbyist Jacques Borel and supported by more than 40 firms.
“It seems to be widely acknowledged by economists, politicians and others that the tax disparity with supermarkets is unfair and that pubs create more jobs and more taxes per pint or per meal than do supermarkets, and that it does not make social or economic sense for the tax regime to favour supermarkets,” Mr Martin said.
“We acknowledge the need to pay a reasonable level of taxes, but hope that legislators will make progress in creating a level playing field for all businesses which sell similar products.”
Wetherspoon’s tax bill reached £294.8 million in the six-month period to late January, once VAT, alcohol duties, business rates and corporation tax were combined with climate change levies, TV licences, landfill and other ad-hoc charges.
Sales climbed 9.3% to £683.2m in the period, or by 5.2% on a like-for-like basis once 19 new pub openings were stripped out.
Bar sales were up by 3.6%, and food revenues were ahead by 10.5%, but income from slot and fruit machines fell by 9.5%.
Pre-tax profit rose 3.2% during the 26 weeks to January 26, with Wetherspoon booking a return of just under £36m after exceptional charges of £1.8m over interest due to HM Revenue and Customs.
The company looks likely to be forced to pay £15.7m back to HMRC after the taxman won a Court of Appeal judgment over revenues from gaming machines. No provision was made in yesterday’s update, though Wetherspoon did say HMRC had “informed management” of its intention to recover the sum.
There has also been a strong start to the second half, with sales up 11.6% or 6.7% on a like-for-like comparison.
Mr Martin warned it would be challenging to replicate the success over coming months. “We expect taxation and input costs to rise, and the comparisons against a strong second-half result in the last financial year will be more difficult,” he said.
business@thecourier.co.uk