Altium Securities predicts trading at JD Wetherspoon's smoke-free pubs will stabilise once the smoking ban is introduced in England.
But it warned it could potentially take up to two years for earnings to return to historic levels.
Its analysts commented after the managed pub operator posted a 20% increase in pre-tax profit to £58.4m for the year to 30 July. Sales for the company, which operates 657 pubs, rose 5.0% to £847.5m over the same period. Operating margins were up from 8.8% to 9.9%. Averages sales per pub increased by 3.0%, with like-for-like sales increasing by 2% compared to the previous year.
Wetherspoon said it planned to continue its conversion programme to no-smoking pubs and it was confident long-term benefits would outweigh any short-term difficulties.
The Times's Business Editor's Commentary, says giving up smoking promises to be a long, painful journey, for England's pubs.
The shares closed down 17p at 433.5p.
Financial Times 09/09/06 page 18, page 19 (Results)
The Times 09/09/06 page 57 (Business Editor's Commentary), page 58 (Need to know), page 59 (Results in brief), page 65
The Daily Telegraph 09/09/06 page 24 (DataBase, Results round-up), page 30
