Wetherspoon pubs trading profitably in Republic 'after €49m in investments'

The group has invested heavily at key locations in the Republic in recent years

Tim Martin, founder and chairman of Wetherspoon, said that the company in the Republic had traded profitably at pub level in 2023, but had spent a total of €49m on its premises at Keavan's Port Hotel on Camden Street in Dublin, at South Strand close to Grand Canal Dock, and at Wetherspoon in Waterford. 

Wetherspoon pubs traded profitably in the Republic in its latest financial year, but is carrying cumulative tax losses after spending €49m on investments at three premises, chairman Tim Martin has said. 

The group which is one of Britain's best known pub chains has also invested heavily at key locations in the Republic in recent years. After offloading some pubs to keep a check on costs and reduce debt, it had 826 pubs trading in the year.  

It reported group-wide profit before tax for the year to the end of July of £42.6m (€49.2m) compared with a loss of £30.4m in the previous year, when hospitality businesses were still suffering from the fall-out of covid restrictions. 

The latest results show that the group was carrying cumulative gross tax losses in the Republic of £24.2m through its latest financial year, up from £18.4m in cumulative losses from prior years reported in 2022, following a period of significant investments. 

Mr Martin told the Irish Examiner that the company in the Republic had traded profitably at pub level in 2023, but had spent a total of €49m on its premises at Keavan's Port Hotel on Camden Street in Dublin, at South Strand close to Grand Canal Dock, and at Wetherspoon in Waterford. 

Capital allowances, pre-opening cost, and interest impacted the reported numbers, he said. 

Across the group, the results show that Wetherspoon reported a return to annual profit, although slower sales growth in recent weeks dented its share price after a rally this year. The group's shares, up nearly 49% from a year ago, closed 6% lower in London trade in the latest session.

Resilient customer spending and price increases have helped the UK hospitality industry deal with high costs, but an ongoing cost-of-living crisis remains a threat as cash-strapped shoppers cut down on discretionary spending.

"The company currently anticipates a reasonable outcome for the financial year, subject to our future sales performance," Mr Martin said in the earnings statement. Wetherspoon had said in July that results for the financial year 2024 were expected to be better than a year ago.

"We retain our concerns over long-term compression in margins given changing sales mix exacerbated by inflationary environment which limits the recovery potential," analysts at Libeirum said in a research note.

Wetherspoon's group operating margin rose to 5.6% in the year ended July 30 from 1.5% the previous year, helped by easing costs of raw materials and energy, but remained below pre-pandemic levels of 7.3%.

Peer Mitchells & Butlers last week reported a rise in annual sales growth, as more customers stepped out to grab drinks and food at its pubs. 

Additional reporting Reuters