Wetherspoon to cut back new openings

City Editor

Saturday 15 September 2012

PUB chain JD Wetherspoon has cut its opening programme to just 25 pubs this year as the company complained the tax burden on the industry is deterring it from expanding further, even though it is making record profits.

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TIM SHARP CITY EDITOR

Wetherspoon added five pubs to its Scottish estate in the last year to take its total to 59. Another will open in Rutherglen in December followed by others in Alloa, Fraserburgh and Blairgowrie in the coming months.

But chief executive John Hutson said across the UK it will open just 25 new establishments in the coming 12 months against 40 last year.He said: "People love the British pub. We argue if you want to keep the British pub in the long run we have got to get tax parity."Wetherspoon objects to rising duty on alcohol and paying value added tax on food when pubs are competing with supermarkets, where many items are zero-rated. The company said its tax bill rose from £461 million to £519.3m last year, up from 43% to 43.4% of sales, during the year.It has complained powers that will be given to local authorities south of the Border in October to impose a levy on pubs that open after midnight could cost it £2m.A change to duty on fruit machines will also cost it £2m, it said.Mr Hutson said that the opening of its pub at the Guildhall & Linen Exchange in Dunfermline in July, which it developed at a cost of nearly £1.2m, convinced it that its model can work in smaller towns."Dunfermline was one of many towns we were not in at all. It gives us confidence we can continue to open up to 1500 or so pubs," he said.Among those places in which it has identified sites are Fort William, Hamilton and Leven.Wetherspoon revealed it had taken property impairments of £7.8m on 10 pubs it bought during the property market boom taking its total provision to £30.1m. Excluding these exceptional items, its pre-tax profit for the year to July 29 was £72.4m, up 8.4% on the year before. This was ahead of analyst forecasts of £69.1m and a record for the company.Increased food and bar sales pushed revenue in the period up 9.3% to almost £1.2 billion, with like for like sales up 3.2%. Mr Hutson said he thought the chain had benefited from wet summer weather as well as from people visiting pubs to watch the Olympic Games.Wetherspoon's shares rose 18.4p or 4% to 479p.

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Wetherspoon to cut back new openings

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