JD Wetherspoon focused on increasing pre-tax profits and free cash-flow rather than margins, says Tim Martin

The company reported a slight increase in operating margin from 8.3% in H1 to 8.5% in Q3, as it reported a 6.3% rise in like-for-like sales in the quarter.

In terms of the margin performance, Martin said: “I don’t think you can read too much into one quarter.”

He said margins are subject to the “slings and arrows of outrageous fortune”.

“It’s one of those strange areas where there’s almost an utter disconnect between what a pub company like ours does in practice and the way that this is viewed by analysts.

“We look at profits before tax and free cashflow versus a year ago and try to increase those, rather than margin.”

Martin described performance in the quarter as “solid”, helped by comparatives against a snowy February last year.

JDW opened 16 of its planned 30 pubs in the first three quarters of its financial year, and Martin said it was just “chance” that openings are being concentrated in the later part of the year.

The company said: “We have several sites under development and, in line with our last update, intend to open 30 pubs in the current financial year.”

Total sales in the 13 weeks grew 9.3%. The company said it expected lower like-for-likes in the final quarter of this financial year, given last year’s Q4 like-for-like sales growth of 6.1%.

In the year to date (39 weeks to 28 April), like-for-like sales increased 6.7%, and total sales grew 10.1%.

Operating margin in the year to date is 8.4%.