JD Wetherspoon's 2013 annual report has shown pre-tax profits fall by three per cent to £57.1m in the 52 weeks ended 28 July as it warns that heavy taxation threatens the pub sector.
There was some good news for shareholders with earnings per share, before exceptional items, increasing 12.6 per cent, along with revenue growth of seven per cent to £1,280.9m and like-for-like sales up 5.8 per cent.
Non-executive chairman, Tim Martin, writing in the report said:
I am pleased to report a year of further progress for the company, with record sales, profit and earnings per share before exceptional items. The company was founded in 1979 – and this is the 30th year since incorporation in 1983.
Since our flotation in 1992, earnings per share before exceptional items and free cash flow have grown by an average of 16.4 per cent per annum.
In its preliminary results the company had highlighted its particularly burdensome tax position. Post-tax profit increased to £7.9m but taxes paid increased by £32.2m. Weatherspoons made a colossal contribution to the exchequer with £551.5m paid in taxes over the course of the year, amounting to £632,0000 per pub. The company found the differentials regarding VAT between pubs and supermarkets especially objectionable.
The company continued to experience growth with 29 pubs opening and only three closed making a total of 886. Staff were also rewarded with £28.6m in bonuses.
It is unsustainable to have far higher taxes for the pub industry than those for supermarkets. Already, 10,000 pubs have closed and many others are suffering, through insufficient investment. In particular, there should be VAT equality for pubs, restaurants and supermarkets.
Weatherspoons recently supported "Tax Parity Day" in association with Jacques Borel's VAT club. Weatherspoon lowered its prices by 7.5 per cent to publicise the issue of the inequality of VAT between supermarkets and pubs. The company believes that this gulf in VAT is one the major reasons for the industry's relative decline, with beer sales declining 50 per cent since VAT was increased from eight per cent almost 30 years ago.