Wetherspoon (J.D) Share News (JDW)

(Sharecast News) - Pub chain JD Wetherspoon said on Friday that it plunged to its biggest full-year loss ever as revenues tumbled after its pubs were forced to shut due to Covid measures.
In the year to 25 July, pre-tax losses widened to £154.7m from £34.1m the year before, with revenues down 38.8% to £772.6m. The company made an operating loss of £105.1m versus a profit of £7.2m the year before.

Wetherspoons noted its pubs were closed for around 19 weeks of the year. In addition, there were regional lockdowns and a "bewildering" range of national and local restrictions, which applied to different areas at different times.

The pub chain said like-for-like sales in the first nine weeks of the current financial year were 8.7% lower than the same weeks in August and September 2019, before the pandemic hit. In the last four weeks of the period, LFL sales were down 6.4%.

Excluding airport pubs, where LFL sales fell 47.3%, sales declined 7.1% in the first nine weeks, and by 4.9% in the last four.

Chairman Tim Martin said: "During the pandemic, the pressure on pub managers and staff has been particularly acute, with a number of nationwide and regional pub closures and reopenings, often with very little warning, each of which resulted in different regulations.

"In the last year, the country moved, in succession, from lockdown, to 'Eat Out to Help Out', to curfews, to firebreaks, to pints with a substantial meal only, to different tier systems and to further lockdowns.

"Pub management teams, and indeed the entire hospitality industry, had an almost impossible burden in trying to communicate often conflicting and arbitrary rules to customers.

"One of the most surprising statistics has been the apparent low level of transmission of the virus in pubs.

"For example, in more than 50 million customer visits, recorded in the second half of 2020, before the introduction of vaccines, Wetherspoon had zero outbreaks of the virus, as defined by the health authorities, among customers.

"Yet there has clearly been a high level of transmission in some other environments, including private parties, weddings, production facilities, university halls of residence and homes.

"Pubs have been at the forefront of business closures during the pandemic, at great cost to the industry - but at even greater cost to the Treasury."

Nevertheless, Martin said Wetherspoons was "cautiously optimistic" about the outcome for the financial year, as long as there are no further restrictions.

At 0925 BST, the shares were down 1% at 1,033p.

Russ Mould, investment director at AJ Bell, said: "Undoubtedly Spoons has gone through a period of unprecedented disruption, which helps explain its record annual loss, but so have many of its independent peers and smaller chains which don't have the same financial heft and scale to ride out the crisis.

"A factor which has made life more difficult for Wetherspoons is its focus on metropolitan centres where usual levels of footfall are still to return.

"Country pubs with lots of outdoor space have definitely fared better and this was very much in evidence in recent updates from Fuller, Smith & Turner and Marston's which own both rural and city and town-based establishments.

"There is limited mention from Wetherspoons of supply chain and staffing problems in its results, beyond some difficulties in attracting people in 'staycation' hotspots. This is somewhat surprising and it may become more of an issue for the business moving forward.

"Sales were down materially on pre-Covid levels in August and September but there are signs of that negative trend easing and ultimately Wetherspoons may benefit from a stronger market position coming out of the pandemic as other operators are forced out of the market."