London 2012 Games prove a hit with punters in pubs as ... - This is Money

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By Harry Glass

PUBLISHED: 11:09 GMT, 14 September 2012 | UPDATED: 11:09 GMT, 14 September 2012

Paralympics and pints: Jonnie Peacock wins the 100m final T44 - plenty of people watched such glorious sporting moments in pubs, it seems

The Olympics and Paralympics provided a big boost to pub chain JD Wetherspoon as punters came out to eat and drink at pubs screening the Games.

Like-for-like sales in the six weeks to September 9 jumped 8.4 per cent, with total sales up 12.8 per cent.

This compared with 6.1 per cent growth in the 11 weeks to July 8.

But the Watford-based group warned that the level of growth at its 860 mainly town-centre pubs would not continue as taxation and input costs are expected to rise.

But it maintained its forecast of a 'reasonable outcome' for this financial year. Shares in the chain jumped 19.8p (4.3 per cent) to 480p this morning.

Tim Martin, founder and chairman of JD Wetherspoon, reiterated his warning over the difference in VAT between supermarkets and pubs and other rising taxes.

He said: 'The biggest dangers to the pub industry are the VAT disparity between supermarkets and pubs, combined with the continuing imposition of stealth taxes, such as the late-night levy and the increase in fruit and slot machine taxes.'

The update came as Wetherspoon reported a 4.1 per cent drop in pre-tax profits to ?58.9million last year despite increasing revenues by 11.7 per cent.

Viewing pleasure: Millions watched Mo Farah win the 5000m final

Douglas Jack, analyst at brokers Numis Securities, said the share price will be driven higher by the strong recent like-for-like growth but warned margin pressure was likely to resume in normal trading conditions.

The group, which also enjoyed a boost from the Diamond Jubilee and Euro 2012 football tournament, reported bar sales increased by 2.8 per cent and food sales rose 4.8 per cent in the year to July 29.

The company opened 40 pubs in that period, 18 of which were freehold, while three others closed, resulting in a total estate of 860.

The average development cost for a new pub, excluding the cost of freeholds, in the financial year under review, was ?1.4million, compared with ?1.2million a year ago.

The company said it intends to open about 25 pubs in the year ending July 2013.