JD Wetherspoons
JD Wetherspoon says sales in the first half of the fiscal year were better than expected Getty

Pub chain JD Wetherspoon says its profits are likely to shrink in the second half of the financial year as a result of rising costs and lower sales.

The company said in a statement that it plans to invest around £60m ($74m) to upgrade its existing pubs in 2016/17 – almost double the amount invested in the previous financial year – while it anticipates a 4% increase in wages to staff.

"In view of these additional costs and our expectation that like-for-like sales will be lower in the next six months, the company remains cautious about the second half of the year," Wetherspoon chairman Tim Martin said.

He added that sales in the first half of the year had been slightly better than expected.

Like-for-like sales increased 3.2% year-on-year for the three months to 15 January, while total sales were up 0.7%.

In the first six months of the fiscal year, like-for-like sales grew 3.4%.

Wetherspoon said it had sold 21 pubs since the start of the financial year and intends to open 10 to 15 new pubs by year-end.

Meanwhile, Martin, a vocal supporter of Brexit, took a swipe at those who had warned of serious economic consequences following the UK's vote to leave the European Union last summer.

"The underlying reason for their catastrophically poor judgement is a semi-religious belief in a new type of political and economic system, represented by the EU, which lacks both proper democratic institutions and the basic ingredient for a successful currency – a government," he said.

"It also lacks any genuine commitment to free trade, other than to countries which are in, or on the borders of, the EU. Unless these lessons are learned and acknowledged by economists, their historic mistakes will be repeated," Martin added.