Pub group J D Wetherspoon has restored its dividend after suspending it for four years, it said today, when it reported a nearly 74% jump in annual profit, citing resilient customer demand and pub disposals.
Pub groups that were hard hit by the pandemic and the cost-of-living crisis have become more confident about growth as inflation and interest rates have started to ease, increasing customers' spending power.
While Wetherspoon was not affected much by an unseasonably wet summer in Britain, riots in August were a slight dampener on its performance, Chairman Tim Martin said in a text message to Reuters.
Across pub groups, sales were boosted in June and July when soccer fans gathered to watch the Euro soccer championship, offsetting the impact of the weather and disruptions caused by riots.
The pub group, sometimes referred to as "Spoons", is prominently marketing coffee and breakfasts, which are not traditional areas of strength for pubs, to lure early customers, Martin said.
The group, which owns and operates pubs across the UK and Ireland, reported a pretax profit of £73.9m for the year ended July 28, compared with £42.6m a year ago.
It posted a 4.9% rise in like-for-like (LFL) sales in the nine weeks to September 29, half of the 9.9% growth seen in the same period last year.
"The reduction in inflationary cost pressures is leading to a slowing of LFL sales momentum, but also an increase in operating margins over time," Jefferies analyst James Wheatcroft said.
The dividend of 12 pence, the level at which it was halted four years ago, highlighted the return to financial strength post Covid-19, Wheatcroft added.
