Pubs chain JD Wetherspoon reported strong sales growth in the final quarter of its financial year.

Like-for-like sales in the 10 weeks of the fourth quarter were up 11% from the same period pre-pandemic in 2019.

Tim Martin, chairman, said: “The company expects profits in the current financial year to be in line with market expectations.”

He forecast an improved outcome in the new financial year with the first-half performance expected to be in line with the second half of the current year.

The company said waivers in respect of its banking covenants granted during Covid will no longer be required from the end of the current quarter.

In the year to date, the company has opened three pubs and sold, closed or surrendered to the landlord 28 pubs which has seen a cash inflow of £6.5m.

Charlie Huggins, manager of the Quality Shares Portfolio at Wealth Club, commented: “This is a solid performance from Wetherspoons set against an exceptionally challenging trading backdrop. Like-for-like sales have proved robust and, despite cost of living pressures on consumers; and there are signs that cost inflation may have peaked, which should help underpin profits in the coming year. 

“Wetherspoon’s commitment to low prices is keeping customers loyal, as evidenced by the robust like-for-like sales growth. These value credentials are critical, and should mean the group is better placed than many of its peers to weather a downturn in consumer spending.   

“Profitability, however, remains well below pre-pandemic levels. Wetherspoon’s business model is heavily exposed to the rise in labour, energy and food costs and this has put pressure on profit margins.

“While labour costs show no sign of reducing yet, there is better news for energy prices, with increases here less than expected. This may help to ease the pressure on Wetherspoon’s profit margins in the year ahead.”

Banks pass stress tests

The Bank of England said the UK’s eight largest lenders passed its latest stress test, which examined their resilience to a severe economic downturn. 

The banks would have enough capital to continue lending through a shock to the economy including a housing market crash, surging unemployment and interest rates as high as 6%, according to the results published today.

Barclays, HSBC, Lloyds Banking Group, Nationwide Building Society, NatWest (RBS), Santander UK, Standard Chartered and Virgin Money were tested.  Together they account for around 75% of lending to the UK economy. 

Springfield appoints CFO

Springfield Properties has confirmed Iain Logan as chief financial officer after serving in an interim role since March, and he will join the board.

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Global markets

Asian shares were mixed after Wall Street jumped on hopes of a more benign update on US inflation.

Hong Kong’s Hang Seng index was 1.3% higher while the Shanghai Composite index edged 0.1% lower. Tokyo’s Nikkei 225 fell 0.8% after North Korea launched another missile into the sea.

The Dow Jones Industrial Average closed 0.9% higher.