20th Mar 2020 09:11
(Alliance News) - JD Wetherspoon PLC on Friday reported a rise in profit and revenue in the first half of its financial year, but has cancelled its dividend due to the uncertainty surrounding the Covid-19 outbreak.
Shares in the pub owner were 28% higher in London on Friday morning at 713.50 pence each.
In the 26 weeks to January 26, Wetherspoon's recorded pretax profit of GBP57.9 million, up 15% from the GBP50.3 million seen in the same period the year before.
Revenue was 4.9% higher year-on-year at GBP933.0 million from GBP889.6 million.
Like-for-like sales in the first half of the financial year were 5.0% higher. Like-for-like bar sales increased by 4.2%, food sales by 5.6% and fruit/slot machines by 20%.
Like-for-like hotel room sales decreased by 1.3%, however.
Bar sales were 60% of total sales, Wetherspoons noted.
Despite the strong performance, the bar owner has cancelled its interim dividend - owing to the uncertainty caused by the spread of Covid-19.
Chief Executive Tim Martin said: "As recently reported, in the six weeks to March 8, like-for-like sales increased by 3.2% and total sales by 2.9%. In the following week, to 15 March, sales declined by 4.5%. In the early part of the current week, following the UK prime minister's advice to avoid pubs, sales have declined at a significantly higher rate.
"It is obviously very difficult to predict, in these circumstances, how events will unfold in future weeks and months, but we now anticipate profits being below market expectations, so long as the current health scare continues. As a result of this uncertainty, it is impossible to provide realistic guidance on our performance in the remainder of the financial year."
Wetherspoons has decided to delay most of its capital projects, in an attempt to reduce expenditure where possible.
"As a result of these actions, combined with the government's proposals on business rates relief and credit guarantee facilities, the company believes it has sufficient liquidity to maintain operations at a substantially lower level of sales," Martin said.
Wetherspoons ended the interim period with net debt, including bank borrowings and finance leases, but excluding derivatives, of GBP804.5 million. The pub firm generated free cash flow of GBP49.0 million in the period.
Cash & cash equivalents stood at GBP47.4 million at January 26.
Martin added: "As many companies and commentators have noted, the current health crisis places the hospitality industry, in particular, under great pressure. Wetherspoon, like our peers, will be working closely with all parties, including employees, banks, landlords and suppliers, in order to emerge from the situation in the best shape."
By Paul McGowan; [email protected]
Copyright 2020 Alliance News Limited. All Rights Reserved.
Related Shares:
Wetherspoon (J.D)