First half profits soar at Wetherspoons but pub chain warns of significantly declining sales
By James Young | 20th March 2020
The first half of the financial year saw Wetherspoons record a 20.6 per cent rise in operating profits and a 4.9 per cent rise in sales.
In a report to the Stock Exchange, the high street pub chain said that like-for-like sales for the 26 weeks to January 26, were up by five per cent.
Total revenues for the 26 weeks were £933.0 million, leading to an operating profit of £76.6 million.
However, the chain did admit that the current public health crisis will lead - and has already led - to a significant decrease in sales.
Earlier this week, the chain said that they will continue to keep their pubs open until instructed to close by the government.
So far advice has not gone that far, but customers are appearing to heed the advice to stay away, leading to significant falls in sales.
JD Wetherspoon plc chairman Tim Martin said: ""As recently reported, in the six weeks to 8 March 2020, like-for-like sales increased by 3.2per cent and total sales by 2.9per cent. In the following week, to 15 March, sales declined by 4.5per cent.
"In the early part of the current week, following the 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.
"The company has decided to delay most capital projects and to reduce expenditure, where possible, including the cancellation of the interim dividend.
"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."
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