JD Wetherspoon share price set to slide as Covid-19 curbs hit profits
The pub chain saw its shares tumble more than 19% on Friday after it recorded its first annual loss, with its outspoken boss Tim Martin blaming its poor performance on the UK government’s Covid-19 restrictions.
- JD Wetherspoon shares slide 19% after first annual loss due to Covid-19 restrictions
- The pub chain blamed the 10pm curfew for a 15% decline in like-for-like sales
- Pubs and restaurants under pressure as London sees Tier-2 restrictions imposed on Saturday
JD Wetherspoon shares are down more than 13% on Friday after the company swung to its first annual loss, with its outspoken boss Tim Martin blaming its poor performance on the UK government’s Covid-19 restrictions.
‘These are extraordinarily difficult for the public and publicans to understand and to implement,’ Martin said. ‘None of the new regulations appears to have any obvious basis in science.’
‘The company and the entire hospitality industry need a more sensible and consistent regulatory framework in which to operate - the current environment of lockdowns, curfews and constantly changing regulations and announcements threatens not only pub companies, but the entire economy,’ he added.
JD Wetherspoon closed 19% lower to 773p per share on Friday, with the stock down 54% year-to-date.
JD Wetherspoon shares slump as company swings to annual loss
The pub chain reported a pre-tax loss of £34 million compared with a £102 million profit a year prior, with revenues falling more a third to £1.26 billion, forcing the company to scrap its dividend.
In an effort to strengthen its balance sheet and offset the economic impact of the coronavirus pandemic, JD Wetherspoon has cut 108 jobs from its head office in addition to the 130 it has previously announced and is looking to cut 450 of its 1000 staff working at airports.
‘The recent curfew and introduction of table service only have been particularly damaging for trade, depressing sales for customers who find it too much 'faff', at the same time as substantially increasing costs,’ the company said.
JD Wetherspoon offers dim outlook
In the company’s annual results, it admits that the 10pm curfew imposed by the government and the introduction of ‘table service only’ has been particularly damaging for trade, with like-for like sales in the first 11 weeks 15% lower than over the same period a year prior.
The outlook for pubs over the remainder of the current financial year is even more unpredictable than hitherto,’ the company said.
‘There is a need for a more sensible and consistent regulatory framework in which to operate.’
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