JD Wetherrspoon witnessed that its shares stumbled by 10 percent after the deployment of low profits expected in the first half, despite the growth of strong sales through the barrier. The Al -Hama group blames the high costs of employment and benefit to decline in performance, which raises the investor concern and a sharp sale.
The shares in the company decreased 62 pixels to 535 pixels, as operating profits decreased to 64.8 million pounds in the six months to January 26, a decrease from 67.7 million pounds in the previous year. Analysts expected an increase.
The impact of an increase of 31 million pounds in employment and energy costs was clear, while narrowing the operating margins to 6.3 percent of 6.83 percent. Pre -tax profits decreased by 8.6 percent to 32.9 million pounds.
Wittsbon, who is famous for her loses and low -cost meals, said the total revenue increased by 3.9 percent to 1.03 billion pounds during the half of the year. Similar sales increased compared to 4.8 percent, as the bar sales increased by 4.3 percent and food sales by 5.4 percent. Fruit machine revenue increased, while a smaller part of the work has increased by 12.4 percent.
Despite the pressure on the margins, the group announced the distribution of temporary profits 4P, due on May 30.
Sir Tim Martin, the company's founder and chairman, remained optimistic, indicating the continued strong trading in the second half. Similar sales increased compared to 5 percent in the seven weeks to March 16.
However, Martin warned that the rise in national insurance contributions to the national wages of national wages announced in the autumn budget will add estimated 60 million pounds in the annual costs – more than 1500 pounds per week per week.
Shore Capital analysts described the results of the first half as “somewhat disappointing”, noting that they expected an increase of 3 million pounds in profits, not a decrease. However, they added that the flexibility in similar sales that resemble the pleasure is well affected by the broader pubic sector.
Jefferies hit a more positive tone, referring to the competitive prices of Wetherspoon: “With low price mode for other operators, increased wages that affect the entire industry, we say that Wetherspoon is relatively better to absorb wage inflation.”
Wetherspoon founded by Martin was founded in 1979, and reached its climax in 2015 with 951 bar. At the end of the last half -year, the series was running 796 pubs, after it opened two new sites and sold six.
With the high costs and margins, the Wetherspoon will be able to keep customer loyalty while managing the expenses, the key to its long -term performance.