U.S. News

Wetherspoon Profit Up 20%; Coffee Sales Help


British pub operator JD Wetherspoon reported a 20% rise in first-half pretax profit on Friday, lifted by strong sales of coffees and breakfasts.

"This is the evolution of the pub," Finance Director Jim Clarke told Reuters on Friday. "As long as we make the coffees well, we make similar margins to beer, and it's similar with breakfasts."

Wetherspoon raised its interim dividend by 150% to 4 pence a share, bringing it back into line with the sector. But it was cautious about the second half.

"Following strong like-for-like sales until Christmas, sales growth slowed in January and February," said Chairman Tim Martin.

"In view of the increase in wages and utility costs, combined with slower sales growth, the company is cautious about the outcome in the second half," he added. "The company is targeting like-for-like growth in the second half year of about 2-4%."

Profit before tax was 32.9 million pounds ($64.4 million) in the six months to Jan. 28, compared to 27.4 million a year earlier.

Wetherspoon maintained its emphasis on food sales, which it said had grown to around 6,700 pounds per pub per week from around 500 pounds when it floated on the stock market in 1992.

The group said it was now selling about 450,000 coffees a week and about 230,000 breakfasts. It said traditional ale sales were growing at around 5%, and it now sells more Swedish Kopparberg cider than the company sells itself in Sweden.