JD Wetherspoon has warned the City that rising costs and sluggish consumer demand could put the brakes on its growth.
Reporting like-for-like sales growth of 7.4 per cent in the six months to January 28, Wetherspoon chairman Tim Martin said like-for-like sales had been strong until Christmas, but slower sales growth in January and February meant "the company is targeting like-for-like growth in the second half year of about 2 - 4 per cent."
Higher wages and increased utility costs, combined with this slower sales growth, had made the company "cautious about the outcome in the second half," said Mr Martin.
With eight new pubs opened and three sold, bringing the tally to 662, total turnover grew 8 per cent to £438.4m. Pre-tax profits grew 20 per cent to £32.9m.
Wetherspoon has upped investment in existing pubs to lay the ground for the smoking ban, with a focus on kitchen upgrades, as well as new cellar technology aimed at ensuring its pubs consistently serve lager, cider and wine colder than the competition.
Food sales are now an average of £6,700 a week per pub, and Including drinks sales accompanying a meal, around 50 per cent of overall sales relate to food. Wetherspoon is also selling around 450,000 cups of coffee and 230,000 breakfasts a week.
Pubs in Scotland have performed better than expected since the smoking ban came into force last year, with like-for-like sales up by 5 per cent in the first half. No smoking pubs outside Scotland, which saw substantial declines in sales and profits in the year after conversion, are now showing "encouraging like-for-like sales and profits growth, above the company average."
Mr Martin said Wetherspoons "continues to make strong efforts to improve every area of its business and, combined with targeting continuing improvements in sales and trading performance, and our strong cash flow, we remain confident of future prospects."