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JD Wetherspoon shares hit record high after profit jumps

Published 15/09/2017, 08:41
© Reuters. Tim Martin, chairman and founder of pubs group Wetherspoon, attends an interview with Reuters at the Metropolitan Bar in London
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(Reuters) - JD Wetherspoon (L:JDW), owner and operator of more than 900 pubs in Britain and Ireland, on Friday reported an almost 28 percent jump in annual pretax profit, helping to send shares in the company to a record high.

Adding to the upbeat mood, the company said trading had remained strong in recent weeks, although injecting a note of caution for the coming months.

"Since the year end, Wetherspoon's like-for-like sales have continued to be encouraging and have increased by 6.1 percent," Chairman Tim Martin said.

"This is a positive start, but is for a few weeks only -- and is very unlikely to continue for the rest of the year," he added.

Shares in the company surged up as much as 10 percent to hit a record high of 1152p by 0720 GMT.

Rival pub and restaurant groups including Mitchells & Butlers (L:MAB) and Whitbread (L:WTB) have warned that growth will slow as customers cut spending amid rising inflation.

Wetherspoon's profit before tax and exceptional items for the 53 weeks to July 30 rose 27.6 percent to 102.8 million pounds ($138 million).

Like-for-like sales grew 4 percent while total sales grew 4.1 percent to 1.66 billion pounds ($2.22 billion), slowing from 5.4 percent growth the previous year.

The company reiterated it would need like-for-like sales growth of about 3 to 4 percent to maintain profits at the same level next year.

Analysts at Investec believe that JD Wetherspoon continues to outperform the UK pub sector and is benefiting from its relatively low prices and investments in its pub estate.

© Reuters. Tim Martin, chairman and founder of pubs group Wetherspoon, attends an interview with Reuters at the Metropolitan Bar in London

The brokerage has a "buy" rating on the stock.

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