Nov. 3 (Bloomberg) -- JD Wetherspoon Plc, the U.K. owner of 823 pubs, said it posted a slower sales growth in the fiscal first quarter as customers’ incomes remain under pressure.
Sales at outlets open more than a year increased 1.1 percent in the 13 weeks to Oct. 23, the Watford, England-based company said in a Regulatory News Service statement today. statement. Comparable sales increased 2.1 percent in the year ended July 24. Total first-quarter sales climbed 7.3 percent, compared with a 7.6 percent increase for the preceding year.
U.K. pub company profits are being squeezed by cheaper alcohol at supermarkets and as household incomes are hurt by stagnant wages, rising unemployment and government austerity measures. Wetherspoon said it was also being hit by higher costs, with its operating margin declining 0.2 percent to 9.3 percent.
“Our sales, profit and cash flow have been resilient,” the company said in today’s statement. “The main challenges for the company in the coming months will be the continuing cost increases resulting from government legislation. Nevertheless the board is aiming for a reasonable outcome in the current financial year.”
Chairman Tim Martin said in an interview last week the company may scale back its expansion plans if beer taxes increase further. The company said today it intends to continue with plans to open about 50 pubs in the current year.
Wetherspoon closed up 4 pence, or 15 percent, at 426 pence in London trading today, giving the company a market value of 560.7 million pounds ($897 million).
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