𝓤𝓷𝓲𝓽𝓮𝓭 𝓝𝓮𝔀𝓼

JD Wetherspoon will be looked to for any comments on the impact of surging energy costs due to the Iran war when it reports half-year figures after already warning over a hit to profits from rising bills.

The pub chain, which posts interim results on Friday, said in January that half-year and annual results would be lower year-on-year as it suffers from higher-than-expected costs.

It revealed a £45 million cost hit in its first half as it said it was being knocked by rising bills for energy, wages and business rates.

Experts said the Iran war could inflict further cost pain on the group, with rocketing oil and gas wholesale prices expected to send energy prices soaring.

Dan Coatsworth, head of markets at AJ Bell, said: “Wetherspoons has always prioritised sales over margins and keeping its prices as cheap and cheerful is a key part of the chain’s appeal, but its commitment could be tested heading into first-half results on 20 March.

“The stock had mounted a recovery in recent weeks before events in the Middle East intervened, but its skinny margins combined with a large estate of pubs to light and heat leaves it heavily exposed to rising energy prices.”

He added: “With value such a key part of Wetherspoons’ appeal, it must balance the need to pass on these increased costs while keeping its pints, coffee and food cheap enough to get punters through the doors.

“Investors will be looking for updates on how the company is navigating this challenge and the impact it might have on profit guidance for the current year.”

Wetherspoon’s recent profit alert comes despite a pick up in like-for-like sales growth over the festive quarter, to 6.1% in the 12 weeks to January 18, up from 4.7% in the previous three months.

Over the key Christmas period, comparable sales jumped 8.8% in the three weeks to January 4.

The sector was given a slight reprieve when the Government announced later in January that pubs and music venues would be given a 15% discount on their business rates bills from April and will not see increases for two years.

But pubs are still facing rising energy and wage costs and the prospect of consumer caution amid the Iran war.

Derren Nathan, head of equity analysis at Hargreaves Lansdown, said: “Recent data suggests pub sales in the wider market have continued to grow, led by higher prices rather than footfall.

“But rising fuel and energy prices in the wake of the war with Iran could cause a further squeeze on the group’s margins and its customers’ spending power, so some caution is to be expected.”