Wetherspoon second half beats guidance

By Matthew Scuffham

LONDON (Reuters) - Pubs group JD Wetherspoon (JDW.L) said on Wednesday that second-half sales beat its forecasts, boosting its shares, and blamed the government for the rising cost burden facing the industry.

Pubs have been hit by significant cost rises over the past year -- notably in energy, food, labour, and tax -- and Wetherspoon Chairman and founder Tim Martin told Reuters that over half the group's non-discretionary cost increases in the coming year come from government legislation.

"I don't think the Bank of England or economic commentators understand or have been frank about the role of government in cost inflation for businesses," he said.

"The government pays a much greater role than has been acknowledged and, for pubs and restaurants, about 50 percent of cost inflation is as a result of government legislation," Martin told Reuters in a telephone interview.

Martin said Wetherspoon will face excise duty of around 10 million pounds in its 2008/9 financial year, 4 million pounds from extra holiday entitlements and a further 5 million pound in costs as a result of minimum wage requirements.

The group, which has almost 700 pubs, said like-for-like sales increased 0.4 percent in the 11 weeks to July 13, with the performance boosted by increased promotional activity on food, wine, and summer favourite Pimm's.

In the 50 weeks to July 13, like-for-like sales fell by 1 percent, with overall sales up 2.2 percent.

Wetherspoon said in March that second quarter like-for-like sales had declined by 3.1 percent and it expected second half sales trends to be broadly similar.