Most UK bosses who back Brexit keep their views on the subject out of the corporate domain. Not so Tim Martin. Beer mats and the company’s in-house magazine left drinkers in JD Wetherspoon pubs in no doubt as to his stance on the matter.
Much of the group’s results statement was devoted to the same subject. The remainder of it showed the group doing well; profit was up 15 per cent in the first full year since the Brexit vote. Selling cheap beer and food to Brits is not a business dependent on close trading links with Europe. Goods from EU suppliers could be readily substituted and just 5 per cent of staff are EU nationals.
Many other listed companies with Brexit-backing bosses are similarly UK-focused. The main risk they face is a slowdown in UK consumer spending that Mr Martin says has not happened (despite “doom-mongering” by the Financial Times and others). Clothing retailer Next said on Thursday that conditions were “encouraging”. For those that do sell abroad, Europe tends to be less important a market than the US or Asia. It is just 5 per cent of revenue at Next and 3 per cent at Jardine Lloyd Thompson, the insurer.
Post-referendum share price performances tell us little. Shares in Wetherspoon are up 38 per cent since June 2016 because trading has improved, while it has bought back shares and improved the quality of its estate. CMC Markets is down 45 per cent because of a threatened regulatory crackdown, not because of founder Peter Cruddas’s views on Europe.
Longer term performances are often impressive. Wetherspoon has returned 4,690 per cent since floating in 1992. Next and Hargreaves Lansdown, a financial group, have also done well. Then again, so has Ryanair, whose chief executive was an advocate of staying in the EU.
Behind the scenes, business comes first. Good bosses do not let their political views colour their decisions. Investors should keep politics out of theirs, too.
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