The future is rosy for JD Wetherspoon

Things are looking good for the pub chain JD Wetherspoon as it looks to open new pubs next year after an increase in overall customer expenditure and profits. Over the last few years the pub chain has increased its customer base with promotions such as bargains that include a burger and beer combo as well as curry clubs; promotions which helped their customers who struggled during the economic downturn. It has increased its projection of new sites by 5, from 25 to 30 by the ending of next year.

Wetherspoons’ founder said, “There is more of an air of positivity surrounding our business now than we’ve ever been since the start of the downturn, mainly because we have made more profits due to the fact we did not pay as much in excise duty, and also experienced a better second half. Life still goes on despite the current economic state; after five years everybody appreciates that while the economy is still precarious, it could have been a lot worse. They are experiencing gradual rises in the economy and their incomes; albeit very slow ones.”

The government’s decision in March to get rid of above-inflation tax rises for beers in Britain contributed to the pub chain’s increased shares, rising by 5.8 per cent to 707 pence, the highest it’s been all year. The pub chain, which opened almost 30 more pubs in the current financial year is in a very optimistic mood and stated its operating margin to be at 8.7 per cent; a number which they aim to sustain despite it being almost 10 per cent the previous year.

Upon looking at the current performance of the pub chain, James Hollins, an Investec analyst has increased his full-year profit expectation before tax to almost £80 million, a percentage increase of almost 5 per cent.