(Adds outlook, details)
May 3 British pubs group JD Wetherspoon
forecast a slightly improved annual trading outcome compared
with previous expectations thanks to a robust sales performance
this year, boosting its shares.
The owner and operator of more than 900 pubs in Britain and
Ireland said its third-quarter like-for-like sales for the 13
weeks to April 23 increased by 4 percent, higher than the 3.8
percent advance seen last year.
Sales have held up despite signs from other British
companies that rising inflation was making consumers cut back on
Wetherspoon, however, reiterated its warning of
"significantly higher" costs in the second half of the year and
estimated it would need comparable sales growth of about 3 to 4
percent in the next year to maintain profit levels, as a result
of the higher costs.
It expects higher costs in the latter half of the year
related to business rates, utility taxes, excise duty and staff.
Its financial year runs until the end of July.
The company's shares rose 2.4 percent by 0730 GMT and were
the top gainer on the FTSE 250 midcap index.
"We believe the group's value positioning and significantly
higher investment per pub are two of the main factors behind the
group’s outperformance," Investec analyst Karl Burns said.
Pub operator Mitchells & Butlers Plc recently
reported a steady start to 2017, crediting 'particularly strong'
trading over the festive period.
Wetherspoon has been battling higher costs related to its
purchases made in currencies other than the pound following the
decline in the value of sterling since last June's Brexit vote.
Measures in the government's March budget would add an
increase in taxes and duties of at least 20 million pounds next
year, Wetherspoon said at the time.
($1 = 0.7745 pounds)
(Reporting by Rahul B and Abinaya Vijayaraghavan in Bengaluru;
editing by Jason Neely/Keith Weir)