JD Wetherspoon faces £14m ‘cash burn’ during month of closure

Tim Martin, chairman

JD Wetherspoon chairman Tim Martin has branded coronavirus regulations a “complete muddle” as the pub chain revealed it was likely to burn through £14m of cash during the month-long national lockdown in England.

Wetherspoon has 756 pubs in England, Northern Ireland and the Republic of Ireland that are closed until the lockdown expires on 2 December, around 86% of its entire estate.

64 pubs in Scotland 51 in Wales remain open, although the chain said that the Scottish pubs, in particular, are subject to an “extremely onerous” tier system which is having a serious effect on trade.

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Overall sales at the firm for the 15 weeks to 8 November, which comprises its fiscal first quarter and a further fortnight, have decreased by 28% on a like-for-like basis.

Sales in October were significantly lower than the previous months, following the imposition of a number of new restrictions, including changes in the tier categories, a 10pm curfew, a requirement to order all food and drink ‘at the table’, and the mandatory use of face masks when moving around inside pubs.

Wetherspoon estimate that ‘cash burn’ during the month of closure will cost it approximately £14m.

Mr Martin blasted: “For any pub or restaurant company trading in different parts of the UK, and for customers generally, the constantly changing national and local regulations, combined with geographical areas moving from one tier to another in the different jurisdictions, are baffling and confusing. The entire regulatory situation is a complete muddle.

“However, the initial regulations, following reopening, introduced on 4 July, were carefully thought through, followed thorough consultation, and were based on solid scientific foundations of social distancing and hygiene. The benefits of the regulatory hyperactivity since then, including the imposition of a curfew, are questionable.”

Mr Martin added that a particular anxiety in the hospitality industry relates to the future timescale for the ending of ‘temporary’ regulations.

“Veterans of the industry will recall that the afternoon closing of pubs between about 3pm and 6pm was imposed in the First World War, to encourage munitions workers to return to their factories – but the requirement for afternoon closing was only abolished in 1986.”

Wetherspoon undertook a share placing in April that raised £138m, and £48m was raised through a CLBILS loan in August.

The company had £234m of liquidity on 25 October 2020. Liquidity is significantly higher, and current liabilities are lower, than before the March lockdown, it said.

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Andrew Seymour

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