Second CBILS for JDW

JD Wetherspoon secured a second CBILS loan in March 2021 of £51.7m, bringing its total facilities to £1.04bn.

The pubco previously agreed a CLBILS loan of £48.3m in August 2020.

In the last 12 months, the company has issued 24.1m shares to raise £235m.

During the half year period (26 weeks to 24 January) Wetherspoon opened two new pubs and closed or sold two, bringing the number open at the period end to 872.

Chairman Tim Martin said following a review of its estate, in recent years 100 pubs have been placed on the market, most of which have now been sold.

Martin said following the losses sustained in the period, which are expected for the rest of the year, JDW expect its overall corporation tax charge for the financial year, including current and deferred taxation, to be 12.1%.

Martin critiqued the IFRS 16 accounting model, which he described as “confusing and misleading”.

He said the “complex formula” appeared to equate rent with debt – but said for companies like Wetherspoon, rent bears no resemblance to debt.

“The most important criticism of IFRS 16 is that the complexity which it creates means that it will be understood by only experts - in general, good for the experts, but bad for business efficiency, shareholders and the public,” he said.

Returning to familiar themes, Marin called for tax parity with supermarkets, saying pubs had lost 50% of their beer sales to supermarkets in the last 35 years.

Pubs meanwhile pay around 20p a pint in business rates, whereas supermarkets pay only about 2p, creating further inequality, he said.

“Tax equality is particularly important for residents of less affluent areas, since the tax differential is more important there - people can less afford to pay the difference in prices between the on and off trade.

“As a result, in less affluent areas, there are often fewer pubs, Coffee Shops and restaurants, with less Employment and increased high-street dereliction.”

Martin hit back at accusations the company is guilty of sacrificing employee pay for competitive advantage, arguing its pay is the same or more than competitors.

He said Wetherspoon has awarded 20.6m free shares to employees, approximately 16% of the shares in issue today, a record “few companies in any industry [can] match”.

On coronavirus, Martin pointed to the strenuous efforts of the hospitality trade to comply with capacity, social distancing and hygiene regulations, which had resulted in “very few” outbreaks of the virus in pubs.

With or 3.3% of Wetherspoon employees testing positive for Covid-19 between July 2020-January 2021, the same proportion of the 3.4% of the population who had tested positive, the statistics “do not indicate that pubs are centres of transmission”, Martin said.

“There were no reported instances of the virus being transmitted from staff to customers in Wetherspoon pubs, or vice versa, since the reopening last July.”

Wetherspoon recorded 50m customer visits to its pubs from reopening in July to January, with no evidence of even a single outbreak, as defined by the health authorities, during this time.

“It remains to be seen whether the government will adhere to its reopening plan, following the successful vaccination programme - or whether the knee-jerk reaction to the latest news, which seems to have been the main generator of policy and regulations, will continue,” Martin added.