Wetherspoon has “sufficient liquidity to maintain operations at a substantially lower level of sales,” said chairman Tim Martin in a statement regarding its H1 financial report.

The report showed solid sales growth for the 26 week period to 26 January 2020, with Pre-IFRS 16 like for like sales up 5% and pre-tax profits up 15.2% to £57.9m (2019: £50.3m).

Total revenue was up 4.9% to £933m (2019: £889.6m), and operating profit up 20.6% to £76.6m (2019:63.5m).

Bar sales comprised 60% of total sales (increasing by 4.2% year on year), food 36.1% (up 5.6%) and rooms just 1.1% (decreasing by 1.3% in H1 2020).

Earnings per share increased by 15.8% to 43.3p, up from 37.4p the previous year, but free cash flow per share fell by 31.2% to 46.7p (2019: 67.9p), “due mainly to the timing of supplier payments, an earlier payment of corporation tax and increased reinvestment.”

Due to the impact of COVID-19, sales have suffered in more recent weeks.

Whilst like for like sales were up, albeit at a slower growth rate, in the six weeks to 8 March 2020 (+3.2%), they fell by 4.5% in the week to 15 March.

Since the PM’s advice on Monday, “sales have declined at a significantly higher rate.”

As a result of the market uncertainty, the group has said it anticipates profits being below market expectations in the coming months, and cannot provide a realistic guidance on its performance in the remainder of the financial year.

During the H1 26 week period, it opened one new pub and disposed of six, bringing its total estate to 874. It is also redeveloped a number of sites – like the Prior John in Bridlington and the Sirhowy in Blackwood - adding extra interior space, a garden, a staff room or hotel rooms, but it will now delay most capital projects.

“The company has decided to delay most capital projects and to reduce expenditure, where possible, including the cancellation of the interim dividend,” said Tim Martin, JD Wetherspoon chairman.

“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.”

“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.”

Earlier this week, Martin described the Government’s de facto lockdown as a “tactical error”, and called for it to adopt the Dutch position of accepting many to build up group immunity.

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