Sales up at Wetherspoon but margins under pressure

JD Wetherspoon (JDW), the managed pub operator founded by Tim Martin, has this morning unveiled like-for-like sale growth of 1.6% for its first quarter.

Total sales in the 13 weeks to 24 October 2010 increased by 7.3%, it added.

However, in a brief interim management statement, JDW said that its operating margin was 0.7% lower than the same period last year at 9.4% and it admitted, "we are targeting some margin improvement in the second half of this financial year."

The pub group recently announced the departure of finance director Keith Down and chief operating officer Paul Harbottle after an argument over margins, with most commentators suggesting Martin had wanted to protect them.

In a statement, the company said: "Our sales, profit and cashflow continue to be resilient and the performance of our recently opened pubs remains encouraging.

"As previously indicated, higher interest charges, following refinancing in March 2010, will adversely affect profits in the first half of the financial year, although the company is confident of a reasonable outcome for the year as a whole, helped by investments in new and existing pubs."

It said there had been no been no significant changes to JDW's overall financial position since the publication on 7 October 2010 of the annual report and accounts for the year ended 25 July 2010.

JDW opened five new pubs and closed two pubs in the quarter under review and said: "It remains our intention to open approximately 50 pubs in the current year."