Wetherspoons has warned that pre-tax profits for the first half of its financial year will be down on 2018.
This is despite a 7.2% rise in like-for-like sales during the 12 weeks to 20 January 2019.
The pub chain said labour costs increased by £30m for the period, along with the cost of interest, utilities, repairs and depreciation.
But Wetherspoons chairman Tim Martin said its full year results were still in line with expectations.
“Sales growth has been strong since our last update. Costs, as previously indicated, are considerably higher than the previous year, especially labour, which has increased by about £30m in the period, but also in other areas, including interest, utilities, repairs and depreciation,” said Mr Martin.
“Profit before tax in the first half is expected to be lower than the same period last year. Our expectations for the full year are unchanged.”
Looking to the future, Mr Martin reiterated that the UK needed to agree a free trade deal with the EU, in order to prevent further rising costs.
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Wetherspoons warned in September that food and drink prices would rise due to increased costs
Apart from avoiding the need to pay a £39bn “divorce bill” to the EU, a free trade approach would mean that the UK could “end some or all of the protectionist tariffs and quotas” on non-EU imports such as rice, oranges, bananas, coffee and wine, he added.
“A good example of the EU’s protectionism, which is denied by many people, is the recent imposition of tariffs on Cambodian rice, which will inevitably increase prices for businesses and consumers,” said Mr Martin, who campaigned for the UK to leave the EU during the 2016 referendum.
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