JD Wetherspoon warns of loss following pandemic

JD Wetherspoon has announced that like-for-like bar and food sales were down by 16.9% in the 44 days to 16 August 2020, adding that it expects to make a loss for the year ended 26 July, 2020. 

In its latest trading update, the pub chain noted that sales have gradually improved since lockdown, however, with a “rapid acceleration” reported in recent weeks, largely attributed to the launch of Eat Out to Help Out.

Nonetheless, it expects a period of “more subdued” sales once the scheme for subsidised early-week meals and drinks comes to an end next month. 

Its latest update comes as Wetherspoon has reopened all its pubs in England, Scotland and Wales. Out of its 873-wide estate, 844 sites are once again trading, with the exception of a small number of development sites, as well as pubs in airports and stations. 

Since the closure of its pubs in March, the group noted it has received a waiver of bank covenants for April and July 2020. In addition, a share placing raised £141m and a £48.3m loan was secured.

The group is now looking to enter discussions with its lenders regarding waivers for the current financial year in due course.

Chairman Tim Martin, said: ““Some experts, such as Professor Hugh Pennington of Aberdeen University, believe that pubs are major centres of infection, but they have provided no evidence – in fact, our experience suggests otherwise. 

“If Professor Pennington has evidence he should publish it, so that it can be peer-reviewed, as is standard practise among scientists.” 

He added: “Risk cannot be eliminated completely in pubs, but sensible social distancing and hygiene policies, combined with continued assistance and cooperation from the authorities, should minimise it.

“The company expects to make a loss for the year ending 26 July 2020, both before and after exceptional items. Some of these exceptional items will be related to the Covid pandemic.”