* Pub chain ‘a little bit more bullish’ after good second half
* 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 (Reuters) - 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’ consensus.
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 ago.
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.