March 7 - Commenting on the results, Tim Martin, the Chairman of J D Wetherspoon plc, said: The half year to 27 January 2008 was a challenging period for the Company, and for the pub trade generally, since it followed smoking bans in England, Wales and Northern Ireland in the second half of the last financial year. As anticipated, the introduction of the bans resulted in a strong growth in food sales but a decline in bar sales, which put pressure on margins and profits.
In February, we continued to generate strong growth in food sales combined with a decline in bar sales. We expect second half sales trends to be broadly similar to those of the second quarter, to experience some cost pressures, and therefore have a slightly more cautious outlook for the second half of this financial year.
We continue to believe that the smoking bans are to the long term advantage of the trade. Bar sales are likely to recover as customers adjust to the new regime, although the exact timing of this is still uncertain. Significant future cost pressures exist, for instance in respect of energy and raw material costs, and we will seek to minimise these where possible. As a result of our dedicated staff and our excellent pubs, I remain confident of our future performance.”
Key points:
Turnover up 0.4% to £440.2m
Operating profit down 4% to £44.4m
Operating Margin down 0.5% to 10.1%
Profit before tax down 13% to £28.5m
Earnings per share down 11% to 12.9p
Free cash flow per share 11.3p (2007: 17.0p)
Dividend per share 4.4p (2007: 4.0p)