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The most surprising thing about Wetherspoon's trading statement

·Head of Yahoo Finance UK
A Wetherspoons in Beaconsfield, England. Photo: Getty
A Wetherspoons in Beaconsfield, England. Photo: Getty

JD Wetherspoon (JDW.L), the owner and operator of more than 900 pubs in the UK and Ireland, issued a trading update but the biggest surprise was not related to earnings.

In its statement for the 13-week period up to 28 April 2019, any lengthy statements from the Brexit-backing chairman, Tim Martin, about the the UK leaving the European Union were noticeably absent.

The update was short and just noted that like-for-like sales increased by 7.6% and total sales increased by 8.4% and that the group has opened three new pubs and closed seven. “We intend to open two further pubs in the current financial year,” it added.

It also outlined how the group “remains in a sound financial position.”

Then, uncharacteristically, Martin said in a one sentence statement: "We continue to anticipate a trading outcome for this financial year in line with our previous expectations."

It may not seem a big deal for any other company to keep these trading statements short and the chairman’s comments to a bare minimum, however, Wetherspoon’s is famed for Tim Martin who regularly uses the group’s earnings reports to lash out at the “establishment” that supports Britain staying in the EU.

In March, Wetherspoon reported a 18.9% tumble in profits to £50.3m ($66.5m) in the six months to 27 January 2019. Although revenue rose 7.1% to £889.6m ($1.2bn), it was not enough to offset spiralling costs, mainly from labour, which jumped by around £33m.

Martin then extensively wrote in the group’s half-year earnings report:

"The vexed debate about Brexit has continued since the referendum, nearly three years ago. Although the public voted to leave, the majority of 'the establishment,' including most MPs, most universities, the Bank of England, the CBI and media organisations such as The Times, the Financial Times and The Economist favoured 'Remain.'

"The result has been a barrage of negative economic forecasts from those quarters, predicting that the UK will go to hell in a handcart without a 'deal' with the EU - which will effectively tie the country into EU membership and taxation, yet without representation.

"The doomsters ignore the most powerful nexus in economics, between democracy and prosperity - and the fact that the EU is becoming progressively less democratic, as it pursues an 'ever-closer union,' for which there is no public consensus.

"Previous referendum results on major constitutional issues have always been respected in the UK, but if parliament votes either for Theresa May's 'deal' (which keeps us in the EU by the back door) or to remain in the EU, the referendum result will not have been respected. This may well have significantly adverse economic consequences, as the country turns in on itself to endure months, or years, of stifling constitutional argument.”

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