JD Wetherspoon shares sank more than 13 per cent this morning as the pub chain swung to a loss for the first time since 1984 during the pandemic.
Chairman Tim Martin slammed recent lockdown measures as “total chaos”, after months of closures during the coronavirus crisis hammered the pub group’s sales and revenue.
Wetherspoons fell to a pre-tax loss of £34.1m for the 52 weeks to 26 July, down from a profit of £102.5m in the same period last year.
The pre-tax loss included £60m of exceptional costs, including £29m of Covid-related spending for stock losses, staff costs and equipment.
Sales plunged across the board, with bar and food sales sinking around 30 per cent each, and hotel sales plummeting 39 per cent for the year.
Revenue for the full year fell 31 per cent to £1.26bn, down from £1.82bn in 2019.
Operating profit plummeted 95 per cent to £7.2m, down from £131.9m in the same period last year.
Earnings per share plunged 136.6 per cent to a loss of 27.6p, down from a profit of 75.7p in 2019.
The group withheld its dividend for the full year, warning that like-for-like sales for the first 11 weeks of the new financial year were down 15 per cent.
Today’s results mark the worst performance for Wetherspoons in 36 years, after upturned stools during the nationwide lockdown and the subsequent 10pm curfew crippled sales.
The chain put all of its 872 pubs and hotels into “hibernation” at the outbreak of the pandemic and furloughed 99 per cent of its 43,000-strong workforce.
Addressing the results this morning, Martin told City A.M: “I can’t even bring myself to look at the figures”.
“The problem with lockdowns is, what are you going to do when you get out of them? That’s what the UK found. It’s not an anathema.
Martin called the prospect of further lockdowns including Tier 2 restrictions in London “total chaos”, adding: “People think if you live in lockdown long enough you can actually get rid of the virus. Lockdown defers the problem — it doesn’t solve the problem.”
From midnight tonight, households in London will not be allowed to mix indoors — including in pubs and restaurants — as ministers attempt to curb a sharp spike in infections across the capital.
“It’s going to be bad,” said Martin. “Central London has fared the worst out of all our pubs so far in the pandemic.”
The pub chain this morning announced it has started a consultation process to reduce positions at its airport pubs, as the airline industry remains all but grounded amid government quarantine measures.
Wetherspoons also said it would cut 108 jobs at its head office, as the company looks to slim down expenses ahead of a tough winter.
Martin and other board members today announced they have volunteered to take 50 per cent salary cuts.
Asked if further job cuts and site closures hovered on the horizon, Martin said: “We have a saying, EDOV — Everything depends on the virus — and another one, ADOV — And also depends on the government.”
“You can’t rule anything out at the moment”, he said, adding that the pub chain would consider further fundraising rounds.
The outspoken pub boss, who has previously voiced his support for Boris Johnson, slammed the government for its “palette of ever-changing regulation” during the coronavirus crisis.
The landmark results come a day after pub and brewer Marston’s announced it is set to axe 2,150 jobs, and a week after pub giant Greene King said it will close 79 pubs and restaurants as part of cost-cutting measures to weather the pandemic.
Wetherspoons said the 10pm curfew and introduction of mandatory table service “have been particularly damaging for trade”.
Asked if the pandemic had transformed the future of the pub, Martin said pubs “are always evolving”, and that he hoped Wetherspoons would adapt to a post-pandemic landscape.
“Draught sales were even down before the 10pm curfew, but shooters and cocktails overtook real ale for the first time — so all those night club-goers, the’ve been coming to Wetherspoons. Think of how desperate they must have been,” he told journalists.
The Wetherspoons boss cautioned that the winter outlook remained bleak for the pub chain, but added that he hoped restrictions would be lifted in time for festive celebrations.
“I might stay open at midnight on New Year’s Eve anyway and go to jail — I could be like Nelson Mandela and become a great symbol for freedom around the world,” Martin added.
Shares fell 13 per cent to 828.5p as the group warned that the outlook for the current financial year “is even more unpredictable than hitherto”.
Martin doubled down on his commitment to Brexit, telling City A.M. that a “no deal Brexit is the starting block for a future trade deal”, adding that his position on UK-EU negotiations had not been affected by the pandemic.
Susannah Streeter, senior investment and markets analyst at Hargreaves Lansdown said that “maintaining high numbers of customers is key for the company given that many of its venues are large and to keep costs low, it needs to sell high volumes.”
She added that discounts incentives rolled out by the pub chain were “a sticking plaster for the group”.
“[Wetherspoons] is calling for a consistent framework in which to operate, warning that constantly changing announcements will threaten not only pub companies but the entire economy.”