JD Wetherspoon flat over profits

PUBS group JD Wetherspoon has served up a note of caution after warning annual profits may come in towards the lower end of market expectations.

The Watford-based group blamed higher costs for the warning but also revealed that sales growth in May and June had slowed on previous months.

Like-for-like sales last month were up 3.5%, compared with a 3.8% jump in May. Two months ago Wetherspoon reported third quarter growth of 5.7%. Analysts had raised fears that Wetherspoon, which does not have televisions in its pubs, may have missed out during the recent World Cup.

Chairman Tim Martin admitted there was now more competition than ever for the pubs sector but cast aside doubts about the health of the business. 'I don't know how the City will view it but from our point of view it's a good performance. It's there or thereabouts,' he said.

He added that like-for-like sales growth for the 48 weeks to June 30 was still 5.1% and ahead of the group's rivals.

But JD Wetherspoon's shares, which have fallen by almost 37% since the start of the year, were down 3% in early trading today.

Profit expectations for the group's financial year to July 28 range between £53m and £55.4m, up almost £10m on last year.

Mr Martin said JD Wetherspoon will have opened around 85 new pubs in the 12 months, with a similar amount planned for the coming financial year. He added that between 18 to 19 pubs were being opened this month alone and the drive had pushed costs up above the group's expectations.

But he said: 'The business is looking good. There's more competition from outside the pubs world than in the past with more cinemas, more restaurants. But the mighty Wetherspoons is competing well.'

JD Wetherspoon said its preliminary results for the year to 28 July would be reported on 6 September. The shares fell 12p to 262 1/2p.