Wetherspoon boss calls for "pragmatic approach" towards the pub trade

Tim Martin, founder and chairman of managed pub group JD Wetherspoon has used his company's annual results announcement to take yet another swipe at government policy towards the licensed trade.

Martin, an arch critic of both the Prime Minister and the Chancellor of the Exchequer, noted that for years "the government's approach to concerns about excessive alcohol consumption has been to increase both taxes and regulations for pubs".

This had had the effect of increasing the cost of drinking in pubs, Martin said, compared with drinking at home or in public places, increasing levels of unsupervised drinking, contributing to pub closures and exacerbating the problem of binge drinking.

"It is to be hoped that future government policy will be guided by a more pragmatic, and less doctrinaire, approach, so that pubs retain their historic importance in the national social life," he added.

Martin was speaking as the company he founded 30 years ago posted what it called record turnover, pre-tax profits before exceptionals and free cash flow.

The group, which operates 731 pubs across the UK and said turnover for the year to July 26, 2009, rose 5.2 per cent to £955.1m, with like-for-like sales up 1.2 per cent. Pre-tax profits before exceptionals grew 13.6 per cent to £66.2m.

Operating margins were up 0.2 percentage points at 10.2 per cent. The group's earnings per share figure, pre-exceptionals, rose 18.1 per cent to 32.6p. No dividend is planned, it added, as the group seeks to reduce debt.

Current trading had also been buoyant, the group said today. In the six weeks to September 6, 2009, like-for-like sales had risen 1.2 per cent and total sales by 5.8 per cent, a similar pattern to the same period last year.

Tim Martin said the group's approach remained one of "trying to make lots of small improvements in diverse areas of the business, creating momentum in the services and facilities offered to customers, as well as sales and profits for the company.

"Our combination of bar, food and coffee sales helps to ensure that pubs are busy throughout much of the week, maximising profits and employment opportunities, as well as generating volume growth for many of our suppliers."

Martin added that the cost outlook was "better than it had been for some recent years".

The group's £21.1m of exceptional charges included a £6.5m write-down on the value of some of its pubs, up from £4.1m, and £1.6m in legal fees covering its legal battle with former estate agent Van de Berg on top of the £1.1m it paid out last year.

The US$140m (£87m) private loan which Wetherspoon is due to pay this month will be settled, the group confirmed, adding that net interest payments were covered 3.1 times, compared with the 2.7 times figure last year.