JD Wetherspoon said it will make a profit this year, thanks to strong sales and investments in new and existing pubs.
The pub chain, which has almost 800 pubs in Britain, reported a rise in profit before tax of 7.3 per cent to £71m, with total sales of nearly £1bn.
Wetherspoon is making significant investment in new pubs and systems.
The group plans to open 50 new pubs a year throughout the UK in 2011, and invest in new till systems and staffing. The company cited a government crackdown on underage drinking as its biggest long-term risk.
Chairman Tim Martin said that the government’s measures would only force drinking elsewhere. “Pubs provide a supervised drinking environment, while beaches and parties don’t.”
Analysts said they were confident Wetherspoon’s new pubs and systems will pay off in the long run. “JD Wetherspoon is always looking to the long-term for its investments,” says Nigel Parson of Evolution Securities. “These investments can bring short-term pain, but they should pay off in the long run.”
Wetherspoon last month announced that finance director Keith Down and chief operating officer Paul Harbotttle were to leave the company. However, the firm said there had been little change since the last trading statement on 7 October.