1st Oct 2021 07:56
(Alliance News) - JD Wetherspoon PLC on Friday reported a drop in annual earnings as the pub chain continued to hit out at the UK government's decision to impose lockdown restrictions and the detrimental effects that has had on the industry.
For the financial year that ended July 25, the Watford-based pub and hotel operator reported revenue down 39% to GBP772.6 million from GBP1.26 billion the year ago. Like-for-like sales fell 38%, bar sales decreased by 42% and food sales by 37%.
Pretax loss before exceptional items widened to GPB167.2 million from GBP44.7 million, while pretax loss post exceptional items was GBP194.6 million compared to GBP105.4 million in financial 2020.
Wetherspoons said total capital investment was GBP62.7 million during the year, lower than GBP171.6 million last year. The company said GBP24.1 million was invested in new pubs and pub extensions, GBP20.0 million in existing pubs and IT, and GBP16.9 million in freehold reversions, where Wetherspoons was already a tenant.
The FTSE 250-listed company opened five pubs during the year and sold or closed 16, resulting in a trading estate of 861 pubs at the financial year end. The average development cost for a new pub - excluding the cost of freeholds - was GBP2.1 million compared with GBP2.3 million the year before.
Wetherspoons declared no full-year dividend, unchanged from last year. There were no share buybacks in the financial year.
Turning to current trading, Wetherspoons 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 started.
"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. In spite of these obstacles, Wetherspoons is cautiously optimistic about the outcome for the financial year, on the basis that there is no further resort to lockdowns or onerous restrictions," said Chair Tim Martin.
"The biggest threat to the pub industry, and also, inter alia, to restaurants, theatres, cinemas, airlines and travel companies, relates to the precedent set by the government for the use of lockdowns and draconian restrictions, imposed under emergency powers. This threat, which is also a threat to civil society and democracy, has been regularly articulated by many commentators, including the former Supreme Court judge Lord Sumption."
By Evelina Grecenko; [email protected]
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