(Alliance News) - JD Wetherspoon PLC on Friday said it suffered severe losses in financial 2020 due to the Covid-19 lockdown, which Chair Tim Martin said was full of "ill-thought-out regulations" and not based on science.
The pub owner reported a pretax loss for the year ended July 26 of GBP34.1 million, swinging from a profit of GBP102.5 million a year prior. Revenue fell 31% to GBP1.26 billion from GBP1.82 billion, with like-for-like sales down 30%.
JD Wetherspoon put its poor performance down to the effects of the closure of pubs by the government in March, which lasted for around three months.
The company opted to skip a final dividend, compared to last year's 12.0 pence each. This brings the year's total payout to nothing, compared to last year's total payout of 16.0p.
At July 26, total net debt, excluding derivatives, was GBP817.0 million, up from GBP737.0 million a year prior. Year-end net-debt-to-earnings before interest, tax, depreciation and amortisation ratio was 9.48 times.
The company said that the maximum net-debt-to-Ebitda ratio should be around 3.5 times but the ratio has risen mainly as the result of the temporary closure of pubs.
JD Wetherspoons said debt levels of between 0 and 2 times Ebitda are a sensible long-term benchmark, although higher levels may be justified at times of very low interest rates.
Chair Tim Martin said: "It appears that the government and its advisers were clearly uncomfortable as the country emerged from lockdown. They have introduced, without consultation, under emergency powers, an ever-changing raft of ill-thought-out regulations - these are extraordinarily difficult for the public and publicans to understand and to implement. None of the new regulations appears to have any obvious basis in science.
"For example, a requirement for table service was introduced - which is expensive to implement and undermines the essential nature of pubs for many people - pubs have now become like restaurants. Customers can approach the till in a shop, but not in a pub - which is, in no sense, scientific."
"As a result of recent changes in regulations, the outlook for pubs over the remainder of the current financial year is even more unpredictable than hitherto," he added.
Like-for-like sales in the first 11 weeks of the new financial year have been 15.0% below those of the year prior, with strong sales in the first few weeks, followed by a marked slowdown since the introduction of a curfew and other regulations - which causes pubs and restaurants to close at 2200 BST..
JD Wetherspoon shares were down 7.0% at 892.39 pence each in London on Friday morning.
By Greg Roxburgh; gregroxburgh@alliancenews.com
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Wetherspoon (J.D) (JDW)