Wetherspoons shares slide 'as chairman concentrates on championing Brexit'
Shares in JD Wetherspoon dropped today with a leading analyst suggesting it was due to chairman Tim Martin's focus on campaigning for a hard Brexit.
JD Wetherspoon's share price was down 9.5% as investors absorbed a first-quarter trading update in which the chain said like-for-like sales increased by 5.5% and total sales were up 6.2%.
The pub group hinted at weaker annual performance and chairman Tim Martin revealed he would be temporarily working part-time after a health scare.
But leading industry analyst Mark Brumby, of Langton Capital pointed to the trading statement, in which Mr Martin reiterated his belief in the trading statement that the UK should adopt free trade after Brexit, and suggested his attention was elsewhere.
Mr Brumby said: "This is a short statement of 1,400 words with less than a couple of hundred relating to the group's trading, balance sheet, margins, trading position, outlook, etc.
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"The remainder deal with the chairman's views on Brexit.
"If this ratio reflects the split of effort that is being put into the running of the company, then shareholders may have something to think about.
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"The implied cuts to estimates for profits for the full year will need to be digested."
Despite strong growth, Mr Martin said the company was dealing with tough comparatives, having delivered several years of record profits.
"It is difficult to be too precise at this early stage of the current financial year but we now expect a trading outcome slightly below that achieved in the previous financial year," he said
"We will provide further updates on our trading as we progress through the year."
Mr Martin also revealed he has been recovering from an operation after a burst appendix so will be working part-time from home for "several weeks".
Senior independent director Liz McMeikan will chair the general meeting next week in his absence.
The group also said it is increasing staff wages in response to record levels of unemployment.
The move follows a strike by a small number of staff last month.
Wetherspoon's will not initially raise prices to cover the increase but could later revise this.
"Having had several recent years of record profits we are not immediately seeking to recoup these increased costs through higher pricing or 'mitigation' but will review that during the year," said Mr Martin.
The company has opened two new pubs in the first quarter and has closed or sold three.
It guided new openings of between five and 10 pubs in the current financial year.
In August Mr Martin announced he was looking to get rid of all EU products from his pubs.
The Brexiteer has said his firm was reviewing its "whole range" of products from the EU to see if they could be replaced by alternatives from Britain or non-EU countries.
Mr Martin said that what he described as "back of envelope" calculations showed it would mean replacing 20% of the products in its 880 pubs UK-wide.
He said: 'We'd like to have the option of replacing all EU products.
'It's a good exercise which all UK supermarkets and retailers should go through, even if it's just a desktop exercise.
"They might find they have alternatives from the UK or outside the EU which are better value and that might help their businesses and help UK consumers.'
He bizarrely blamed Jean-Claude Juncker, the European Commission president, and Michel Barnier, the EU's chief Brexit negotiator, for any move away from EU imports, claiming they had put suppliers "in the firing line".
One of the more vocal Brexiteers in the business world, Mr Martin has described Brexit as a "new Magna Carta" and prior to the referendum frequently blamed the EU for tax rises which in actual fact had nothing to do with it.
He has since used his position to campaign for the hardest of Brexits, although has said he would like his own staff to stay "since virtually no one wants hard-working immigrants from the EU to leave the UK".
Last year he put half-a-million brightly-coloured beer mats into his pubs outlining his support for a no-deal outcome to the Brussels talks, to the confusion of people who had only popped in for a pre-10am livener.
His propaganda mats advocated various policies the government should adopt, including axing import taxes on food – which would, he claimed, reduce prices – and halting payments to the EU of '£200m per week'.
This year's Sunday Times Rich List estimated his wealth at £448m.
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