JD Wetherspoon shares crash after first loss since 1984
Stock price of leading British pub chain slumps as coronavirus restrictions continue to hamper the hospitality sector
JD Wetherspoon has posted its first annual pretax loss for 36 years, after being hit hard by the Covid-19 pandemic and associated government-imposed restrictions. The leading British pub chain sank to a £105.4m ($136m, €116m) loss in the year to July 26 , with sales falling by 30 per cent from £1.82bn to £1.26bn. The figures are a stark contrast from the pretax profits of more than £100m it enjoyed 12 months earlier.
Wetherspoon’s dividend to shareholders, which includes 10,000 of its 40,000-strong workforce, fell from 12 pence to zero.
An already struggling sector, pubs have been among the businesses worst-affected by the novel coronavirus outbreak. Although the government’s “Eat Out to Help Out” scheme helped revive activity in August, the recent reimposition of restrictions in much of the country has exacerbated fears. Only this week, rival pub group Marston’s warned that 2,150 jobs could be at risk as a result of the latest rules limiting pub-goers from mixing with members of their own household.
Wetherspoon’s founder and chairman Tim Martin, who previously came to public prominence for his full-throated support of Brexit, slammed the UK Government for introducing “without consultation, under emergency powers, an ever-changing raft of ill-thought-out regulations”.
Condemning Prime Minister Boris Johnson’s approach, Martin alluded to Warren Buffett’s observation that governments and businesses tend to copy each other’s strategy, decrying an “institutional imperative” that “wilts rationality”.
The 65-year old lamented the UK Government’s “erratic… jumping from pillar to post” strategy, urging it to adopt the Swedish approach to Covid-19, which has encouraged a degree of social distancing and individual responsibility without locking down.
By late afternoon, JD Wetherspoon was trading down 19.4 per cent at 773.50 pence.
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