Managed pub company JD Wetherspoon has reported a record year of sales and profits, although it once again warned about the dangers of VAT to the pub sector.
The company saw a 10% increase in revenue to just over £1.4b for the year to 27 July 2014, with like-for-like sales up 5.5%. Profit before tax and exceptional items rose by 3.1% to £79.4m.
JD Wetherspoon, which was founded by chairman Tim Martin in 1979, opened 46 pubs during the year, with five pubs sold or closed, resulting in an estate of 927 pubs at the financial year. It cost Wetherspoon an average of £1.64m to open a pub during the past year, up from £1.55m a year ago, as it increased its expenditure on kitchens, customer areas and beer gardens.
Commeting on the results, Martin said: "I am pleased to report another year of progress, with record sales, profit and earnings per share. The company generated £600.2m in taxes, an increase of £48.7m, compared with the previous year, equivalent to £662,000 per pub. We now employ over 34,000 people, an increase of over 3,000 in the last year. In addition, £29.2m in bonuses and free shares was paid to employees, 82% to those working in our pubs.
"The biggest danger to the pub industry is the VAT disparity between supermarkets and pubs. Wetherspoon, along with many pub and restaurant companies, is supporting Jacques Borel's VAT Club on Tax Equality Day (Wednesday 24 September 2014) to publicise this inequality.
"A similar danger relates to the general tone of corporate governance advice and practice which has helped to create unstable board rooms, often preoccupied by the wrong considerations. For example, many do not even recognise the danger from the VAT disparity, despite the high weekly level of pub closures which has lasted for many years.
"In the six weeks to 7 September 2014, like-for-like sales increased by 6.3%, with total sales increasing by 11.4%."