Four out of five suppliers used by JD Wetherspoon have been paid in full during the pandemic, the pub chain said today.
Wetherspoon found itself at the centre of a payment storm when the first national lockdown forced pubs to close in March last year, with the company initially indicating that suppliers would not get their money until sites had reopened.
At the time, it said the “moratorium” was needed to help the business through the crisis and pledged to clear outstanding payments once it was over.
The move led to a backlash and forced the company – which operates 872 pubs – to reassure suppliers that they would not be left short.
Today, Wetherspoon reiterated that invoices have been settled with the majority of its suppliers over the last 10 months.
It said 80% of suppliers have been paid in full throughout the pandemic, while deferred payment plans have been agreed with a number of larger suppliers.
As at 14 January 2021, the company had £25.2m of deferred payments to suppliers outstanding, compared with £102.7m when the majority of pubs reopened on 4 July.
The company has also agreed a deferral of rents with approximately 90% of landlords during the first lockdown. It currently has £18m of deferred rental payments outstanding.
Additionally, HMRC has agreed to defer £21m of taxes, which will be repaid in 11 monthly instalments up to the end of March 2022.
Wetherspoon has made an application for deferment in respect of an additional £28.8m.
Meanwhile, the company today announced a new share placing to raise more than £92m.
The proceeds will be used to further strengthen its balance sheet, working capital and liquidity position, as well as facilitate the acquisition of new properties, which it expects to be available at favourable prices, as a result of the pandemic.
The company is considering the acquisition of a number of properties in central London, the freehold reversions of pubs of which it is currently the tenant, and properties adjacent to successful pubs.
Chairman Tim Martin said: “The Covid‐19 outbreak is having a severe impact on the UK pub sector. After a number of false starts, the hospitality industry generally anticipates a return to more normal trading patterns in the spring and summer, as a result of the introduction of a mass vaccination programme.
“The equity placing will help the company, along with the other actions it has taken, to emerge from the pandemic in a strong position.”