JD Wetherspoon publishes a trading statement on Wednesday and there is a chance that, as ever, it will be a Brexit tirade with some numbers tagged on.
The last statement in July started amicably enough, but when it came to “outlook”, the chairman, Tim Martin, downed a pint of full-strength Brexit in one go. “The dichotomy between a ‘no-deal’ Brexit and a ‘deal’,” he wrote, “as it is often portrayed in the media, politics and business, is highly misleading. The term no-deal really means multi-deal – a multitude of deals agreed between individuals, businesses, governments and other organisations.”
Oh, and a lot of paragraphs later: “As regards Wetherspoon, the company’s expectation for our annual results is unchanged for the current financial year.”
Since the start of the 2016 referendum campaign, Martin has not been shy of using Wetherspoon as a vehicle for his pro-Brexit views. In interviews, on TV panel shows and in company materials he has attacked opponents of Brexit while extolling the benefits of life outside the EU.
If anything, he has become more vociferous since the vote to leave, lashing out at other business leaders, “elite Remainers” and even bishops worried about a no-deal Brexit. In the midst of a divisive election and with Brexit still unresolved, will Martin confine himself to reporting on beer and food sales in Wednesday’s trading update, or sound off again about the UK leaving the EU?
With Wetherspoon’s AGM due on 21 November, its pro-Brexit position is coming under extra scrutiny. The company did not seek shareholder approval before spending almost £95,000 on beer mats and other paraphernalia during the referendum. Experts said the mats, bearing the message “Vote ‘Leave’ – take back control”, looked like political expenditure under company law.
So Pirc, an influential monitor of corporate governance, advised investors last week to vote against Wetherspoon’s annual report at the AGM. The report features 2,000 words on Brexit, plus supporting materials. ISS, another adviser, said it would keep Wetherspoon’s political spending under review.
Martin owns 32% of the company he founded in 1979 but most of the remaining shares are held by City investors on behalf of pension funds. Martin has maintained that shareholders are happy with the way he uses the company to promote his views, because the business is successful (and it undoubtedly is, if you search out the numbers in the trading statements). But it has emerged that at a meeting this year, some large investors asked him to stop.
Wetherspoon’s shares have tripled in the past decade, outstripping the wider market. It has been quick to respond to trends, adding craft ales and gins, Italian coffee and vegan options. Unlike other chairs, Martin is a hands-on manager, spending most of his time on the road checking out his pubs and talking to staff and customers. He says this approach lies behind Wetherspoon’s long record of growth.
In the year to the end of July, Wetherspoon’s sales at pubs open a year or more rose a healthy 6.8% to £1.8bn, bucking the gloomy consumer mood. Martin said this was proof his customers had not been put off by his Brexit diatribes.
Profit fell, partly because of higher maintenance costs. Martin argues Wetherspoon is making necessary investments instead of letting standards slip to meet short-term City expectations. His position is that when people buy the shares they know they are investing in a different kind of company – quirks included.
Alan MacDougall, Pirc’s managing director, said there was much to admire in Martin’s approach. But he added: “I think the bulk of shareholders would want him to continue to focus on the business and to drop his personal views on Brexit.”
A Brexit-free trading statement would help reset the relationship with the City. But Remainers shouldn’t get their hopes up.