Shares in JD Wetherspoon fell 6 per cent today after the high-street pubs group revealed the first signs that the smoking ban in England and Wales is hitting business.

Like-for-like growth across the group slumped to 1.1 per cent in August, after an initial spurt in July, when sales rose 5.3 per cent.

The setback overshadowed a 6 per cent rise in full-year pre-tax profits to £62 million, helped by Wetherspoon’s continuing drive to diversify its food and drink range.

The group claimed today that it sells 250,000 breakfasts a week as well as more Pimms and Lavazza coffee than any other company in the world. Food sales now account for 30 per cent of turnover.

John Hutson, chief executive at Wetherspoon, said: “People sniffed at us when we started selling coffee five years ago, but we now sell more than Caffè Nero."

He added: “Pimms is not just for toffs. It’s a great product and more people should be enjoying it.”

Mr Hutson insisted that despite the sharp fall in like-for-like sales growth in August, the group was confident it could weather the effects of the smoking ban, which was introduced in England and Wales at the start of July.

Wetherspoon put the initial leap in sales during July down a “novelty factor”.

Mr Hutson said: “It’s sort of what happened in Scotland. Initially there were strong sales because everyone wants to see what it’s like in a pub without smoking. Then sales fell back before eventually recovering again.

“If we can achieve 1.1 per cent as an average for the rest of the year we will be happy. You have to remember it still means we are growing sales. Some analysts were expecting flat-to-zero growth.”

By mid-afternoon the shares were down 37p at 561p.

KBC Peel Hunt said it was clear the smoking ban was having an impact on Wetherspoon’s but reiterated its ‘buy’ rating on the stock in the belief the group’s rivals will be worse hit.

Turnover across Wetherspoon in the year to July 29 rose 5 per cent to £888.5 million with the average weekly level of sales hitting a record £30,600 per pub. Like-for-like growth in the year was 5.6 per cent.

The group is paying shareholders a total dividend of 12p per share, nearly three times the 4.7p per share payout a year ago.

It plans to open 30 sites over the next 12 months, taking the total to more than 700.

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