* Pub chain 'a little bit more bullish' after good second
* Plans to open 30 new pubs next year, up from 20-25
* Margin recovers, shares up 5.8 percent
By Neil Maidment
LONDON, July 24 Britain's JD Wetherspoon
nudged up its profit guidance and said it would accelerate new
pub openings next year thanks to a recovery in margins and a
more upbeat mood among customers.
The company's 800 pubs have helped cash-strapped consumers
ride out the downturn with promotions like curry clubs and 'beer
and a burger' bargains. Having planned to open 20-25 sites in
the next fiscal year, 2013/14, it said on Wednesday it was now
aiming for 30.
"(We are) a little bit more bullish, we've got a bit more
money coming through because the chancellor didn't take as much
in excise duty, and we've obviously had a good second half," Tim
Martin, chairman and founder of Wetherspoon, told Reuters.
Shares in the firm, which has benefited from Britain's
decision in March to scrap above-inflation beer tax rises, were
up 5.8 percent to a year-high of 707 pence by 0905 GMT.
"I think probably after five years people are seeing that
Armageddon has been narrowly avoided and while they realise the
economic world is precarious, life is going on," Martin said.
"They can see themselves keeping their jobs and they can see
the economy and incomes growing slowly."
Wetherspoon, which has opened 29 pubs this financial year,
said it was now on track to achieve "a slightly better outcome"
before any exceptional items for the full year to July 28. It
does not give numerical forecasts or comment on analysts'
The more optimistic outlook came as the company reported
like-for-like sales in the 11 weeks to July 14 rose 3.5 percent.
That was below a 6.3 percent rise in its third quarter, due to a
strong comparative period, but ahead of analysts' forecasts.
The group's operating margin, which has been trimmed by
higher costs in areas like food and tax, rose from 8.5 percent
in the third quarter to 9.5 percent in the period due to food
and drink prices which now stand 2.5 percent higher than a year
Operating margin for the year to date stood at 8.7 percent,
and could be sustained around that level, the firm said. That
figure represents a decline from 9.0 percent last year but is
ahead of analyst expectations.
"This is a very strong performance and we take further
encouragement from the margin beat given historic criticism of
the group chasing revenue at the expense of margin," Investec
analyst James Hollins said, raising his full-year pretax profit
expectation by 4 percent to 76.3 million pounds.
Before Wednesday's announcement the pub firm was on average
expected to post annual pretax profit of 72 million pounds
($110.64 million), according to Reuters data.
Like-for-like sales for the 50 weeks to July 14 were up 6.0
percent, with total sales up 9.2 percent.