'Cautious' Wetherspoon warns of lower sales and higher costs
JD Wetherspoon has warned that it will be stung by significantly higher costs in the second half of the year, adding that it expects sales to slow.
The pubs group said a combination of higher wages, an additional £7 million bill for business rates, a £2 million hit from the Apprenticeship Levy and "cost increases" mean that it remains cautious.
Chairman Tim Martin said: "In view of these additional costs and our expectation that like-for-like sales will be lower in the next six months, the company remains cautious about the second half of the year.
In the first half, Wetherspoon said like-for-like sales rose 3.4% and total sales increased by 1.6%.
The firm said it expects a "slightly improved" trading outcome for the current financial year compared with 2016 and will increase the level of investment in existing pubs from £34 million to around £60 million.
Brexit-backing Mr Martin, who has previously accused European leaders of taking a "bullying" approach to the UK, once again used the company's trading statement to deliver a diatribe on the state of the nation following the EU referendum.
He said that Bank of England chief economist Andy Haldane calling economists' forecasts a "Michael Fish moment" demonstrated a "deep misunderstanding" of the situation.
"Michael Fish's predictions were a misinterpretation of data on one evening, under great time pressure. In contrast, the majority of economists, economic institutions, politicians and intellectuals has consistently misunderstood the implications of the euro, its predecessor the exchange rate mechanism and the implications of leaving the EU, over a period of about 30 years," said Mr Martin.
"The underlying reason for their catastrophically poor judgment is a semi-religious belief in a new type of political and economic system, represented by the EU, which lacks both proper democratic institutions and the basic ingredient for a successful currency - a government."
He concluded by saying that the mutual imposition of World Trade Organisation (WTO) tariffs would create a "windfall" for the UK.