Wetherspoon shares slipped on Friday as investors fretted about costs despite the pub group reporting very respectable profits and margin expansion during the 52 weeks to 27th July.
JD Wetherspoon has reported a 4.5% increase in revenue to £2.13bn for the year ended July 2025, with pre-tax profit climbing 10.1% to £81.4m before exceptional items.
Like-for-like sales grew 5.1%. Bar sales rose 5.1%, food by 5%, and fruit machines surged 11%. However, hotel room sales fell 11.9% after the chain ditched third-party online booking agents charging high commission rates.
Operating profit increased marginally to £146.4m from £139.5m, with the operating margin edging up to 6.88% from 6.85% the previous year.
The pub operator, which now runs 85 fewer sites than before the pandemic, said sales per pub were 29% higher than in 2019—outpacing consumer price inflation.
Yet profits remain below pre-pandemic levels as energy costs have jumped 57.8% and wages 34.5% since then. Costs were the driving force in the group’s share price decline on Friday on concerns about lower profitability in the next year.
“Wetherspoons’ mention of rising labour costs and higher energy levies cast a pall over the rise in profits and improved sales figures. As a result, more of the bounce in shares from earlier in the year continues to drain away,” said Chris Beauchamp, Chief Market Analyst at IG.
“The market was clearly in the mood for something more, and today’s update provides little reason for a change in the current share price direction.”
Wetherspoon warned that new electricity levies starting this month will add £7m annually to its bills. Non-commodity charges—effectively taxes—now account for roughly 62% of total electricity costs.
“As previously indicated, increases in national insurance and labour rates will result in cost increases of approximately £60 million per annum, and non-commodity energy costs will add £7 million,” said Tim Martin, the Chairman of J D Wetherspoon.
“The recently introduced ‘Extended Producer Responsibility’ tax, a levy on packaging, referred to in the table on page 9, will cost £2.4 million in the current year, an increase of £1.6 million. Cost increases such as these will undoubtedly add to underlying inflation in the UK economy, although Wetherspoon, as always, will endeavour to keep price increases to a minimum.”