World Cup fails to deliver residence items for Wetherspoons as pub big points revenue warning
JD Wetherspoon has issued its fourth profit warning in seven months as rising costs outpace sales growth, with the World Cup and summer heatwave failing to deliver the expected boost
Brexiteer and Wetherspoons boss Tim Martin(Image: PA)
JD Wetherspoon’s has delivered its fourth profit warning in seven months, despite football fever and blistering summer weather drawing punters into its venues.
The pub giant revealed that annual profits were set to tumble below City forecasts after sales growth proved disappointing and expenses soared. Like-for-like sales climbed 4% in the 12 weeks to July 19 compared with a year earlier. Throughout the year to date, they had risen 4.2%.
However, investors had anticipated a greater boost from the World Cup and scorching weather. Shares plummeted 9% following yesterday’s announcement. Founder and chairman Sir Tim Martin attributed the disappointing performance to “marginally lower sales” in the final quarter, coupled with escalating costs for food, staff, repairs, energy and business rates.
Investors had hoped there would be a World Cup boost(Image: Gareth Fuller/PA Wire)
The company, which operates 793 pubs and 23 franchise outlets nationwide, had already cautioned in May that profits might fall slightly short of the £73million analysts had predicted at the time.
It has also revealed that pay increases and higher employer National Insurance contributions would pile £60million onto its expenses this year.
Derren Nathan, from Hargreaves Lansdown, noted that football fever and the sweltering temperatures had failed to produce a “knockout performance”.
The fresh warning highlights the mounting pressure confronting Britain’s hospitality industry, where growing revenues are battling to counteract spiralling costs.
Pub chiefs are pinning their hopes on ministers providing respite through reductions to business rates, VAT or National Insurance.
The pub has issued its fourth profit warning in seven months (Image: PA)
DIAGEO is slashing up to 30 per cent of positions in certain divisions as new chief executive Dave Lewis grapples with weakening demand, particularly across the Atlantic.
The beverages behemoth, which owns Guinness, Johnnie Walker and Smirnoff, had a workforce exceeding 29,000 people.
Mr Lewis, dubbed “Drastic Dave” following previous restructuring efforts, assumed control in January. He is anticipated to unveil his complete strategy to investors on 6 August.
