MARKET REPORT: Wetherspoons chief toasts return to profit

Wetherspoons provided a ray of light amid a sea of red on the London stock market after it issued an upbeat trading statement.

Outspoken boss Tim Martin warned ‘ferocious’ inflation has hit its pubs up and down the country. But Wetherspoons swung back into a profit of £4.6m in the six months to January 29 having made a £26.1m loss in the same period a year ago.

In a further boost, sales in the seven weeks to March 19 were 9.1 per cent ahead of pre-pandemic levels in 2019.

As stock markets around the world tumbled, Wetherspoons’ shares rose 13.6 per cent, or 79p, to 660p. Martin was not getting carried away, however.

‘Inflationary pressures in the pub industry, as many companies have said, have been ferocious, particularly in respect of energy, food and labour,’ he said.

The industry has bounced back from the worst ravages of the Covid pandemic. Jonathan Neame, the boss of Britain’s oldest brewer Shepherd Neame (flat at 595p), this week said after-work drinks are making a comeback as staff return to offices. Neame said sales in London in the six months to Christmas were 39 per cent higher than the year before.

Derren Nathan of Hargreaves Lansdown hailed Wetherspoons for its ‘solid start to the year’.

He added: ‘Looking to the longer term we see Wetherspoons as a prime example of economic Darwinism. A company whose business model and brand is likely to see it exit a challenging period stronger than before.’

Rival pub chains Mitchells & Butlers edged up 0.4 per cent, or 0.7p, to 160.2p and Marston’s fell 2 per cent, or 0.72p, to 35.22p. The FTSE 100 fell 1.3 per cent, or 94.15 points, to 7405.45 and the FTSE 250 slipped 1.3 per cent, or 236.13 points, to 18493.83.

Stock markets around the world tumbled amid further turmoil in the global banking system. In Europe, the main benchmark in Germany fell 1.7 per cent, as did France’s Cac.

Back in London, oil majors traded lower after demand fears sent Brent crude down to around $73 a barrel. BP fell 2.5 per cent, or 12.4p, to 486.3p and Shell slid 3.2 per cent, or 71.5p, to 2200.5p.

There was good news for Warpaint London after it posted record first-quarter sales of more than £16m. This was up on the £13.2m it made in the same period last year and followed a strong end to 2022.

As a result, it said its forecasts for 2023 will now be above previous expectations. Shares rose 2 per cent, or 4p, to 201.5p.

Warhammer figurine maker Games Workshop said its trading in the three months to the end of February has been in line with expectations. Shares gained 1.1 per cent, or 95p, to 9115p.

Tui, the world’s largest travel company, has gone cap in hand to shareholders for £1.6billion to help pay off debts owed to the German government for support during the pandemic.

Berlin handed £3.5billion in survival loans to the company as travel restrictions during Covid devastated the business. Tui is seeking to raise money from shareholders to pay off its debts. Shares fell 2.4 per cent, or 33.5p, to 1380p.

Meanwhile, Smiths Group upgraded its annual revenue target for the second time this year.

The engineering company expects revenue to grow by at least 8 per cent for the year to July 31, only two months after it raised this forecast to at least 7 per cent.

The improved outlook came after it reported record revenue growth of 13.5 per cent in the six months to January 31. Shares slid 0.3 per cent, or 5.5p, to 1710p.