No-frills pubs group JD Wetherspoon has warned that competition and Euro 2004 football would cause full year profits to come in below expectations.

The company said growth in like-for-like sales in the final quarter had slowed due to a stronger challenge from other pubs and supermarkets.

The football also had an impact, with only a minority of the company's 640 pubs having televisions to show the tournament.

In the 11 weeks to July 11, like-for-like sales were flat, resulting in a year to date like-for-like sales increase of 3.5%.

In a trading update before its full year results on September 3, the group said it expected profits before tax and one-off items to come in slightly below the current range of analysts' forecasts.

However, it added: "In spite of the current demanding trading environment, the company is confident of its future prospects."

Wetherspoon, which has always shunned television and music, said in March that it may roll out TVs gradually across all its pubs given the growing popularity of televised soccer among customers.

It already had televisions before Euro 2004 in a minority of its pubs and has introduced them in a few dozen additional outlets.

It said like-for-like sales in those pubs were strong during England's matches, but were negative for the tournament as a whole.

A switch to lower-strength drinks in line with guidelines from the Portman Group and other bodies encouraging responsible drinking had weakened sales in some categories including spirits and cocktails.

A number of taxes, licensing and other regulatory issues were increasing the group's costs and a 40% increase in gas and electricity bills would further affect the group's results in the next financial year, it said.

In the first seven weeks of the final quarter, before the start of Euro 2004, like-for-like sales were up about 1%.

Total company sales for the 11 weeks increased by 2.8% to £167.7 million and by 7.8% to £753.3 million in the year to date.

Wetherspoon said it expected to have opened 28 pubs in the year to July 25 and had exchanged contracts for five of the 10 pubs that it had identified for sale earlier in the current financial year.

Tuesday July 13, 2004