9th Jul 2014 06:48
LONDON (Alliance News) - British pub chain JD Wetherspoon PLC Wednesday said sales have slowed since the third quarter of its financial year, but said it remains on track with its pub opening programme and is still confident of achieving a "reasonable outcome" for the year as a whole.
The UK-based pub operator said sales were up just over 10% in the 10 weeks to July 6, while like-for-like sales rose 4.9%.
But that represented a slowdown in sales growth, as like-for-like sales increased by 6.2% in the third quarter ended April 27, while total sales were up almost 11%.
In the year-to-date, like-for-like sales were up 5.4%, while total sales increased 9.8%, JD Wetherspoon said, as sales have been slightly weaker during the World Cup.
"Although sales have slowed in recent weeks, the company remains confident of a reasonable outcome in the current financial year," the company said in a statement.
JD Wetherspoon has said it continues to face pressure on its profit margin. Its operating margin in the year-to-date was 8.1%, a figure the company said it is expecting to be about its operating margin for the full year. Going forward, JD Wetherspoon said it expects a similar operating margin in the upcoming financial year.
"In the next financial year, we expect the operating margin to be in the region of 7.7% to 8.1%, subject to the level of like-for-like sales, the number of new openings and cost pressures," the company said.
So far this year, JD Wetherspoon has opened 40 new pubs and closed five. The company said it still intends to open around 45 pubs by the end of the year, and plans to open between 30 and 40 pubs next year.
JD Wetherspoon also said Wednesday it will reduce opening hours by one hour earlier on Friday and Saturdays in most of its pubs going forward, in response to the UK governments 'late night levy', which charges pubs for opening beyond midnight.
JD Wetherspoon said annual charges are up to GBP4,000 a year for pubs opening beyond midnight in Newcastle and Islington.
"A retrograde step for pubs, which will have a positive impact on supermarkets, since they will benefit from earlier pub closures," JD Wetherspoon said.
The company said it will release its full-year results for the financial year ending July 27 on September 12.
By Rowena Harris-Doughty; [email protected]; @rharrisdoughty
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