JD Wetherspoon targets June reopening

JD Wetherspoon has stated its intention to reopen the group’s pubs and hotels “in or around” June despite the ongoing nationwide lockdown.

It comes one day after McDonald’s said it will begin operational trials for a “potential and limited reopening”, though JD Wetherspoon has not yet outlined how it plans to reopen this summer. 

Alongside plans for a potential reopening, the pub chain also revealed it has successfully raised £141m through its shareholders and directors. 

The new funds were raised through the placing and subscription of 15,701,760 shares at a price of 900p, representing a 6% discount. 

In its latest trading update, the group said that like-for-like sales had fallen by 4.5% in the week to 15 March 2020. Group sales have been zero since the imposed closure of its 867 pubs on 20 March.

Nonetheless, the group said it has implemented an “extensive” set of measures to protect profit and cash in the period. 

Tim Martin, chair of the group, and CEO John Hutson have both elected to take a 50% salary reduction alongside the group’s non-executive directors. 

Meanwhile, overhead expenditure has been reduced from an annualised rate of £210m to £35m, while £70m of additional capital expenditure has been deferred.

The majority of the group’s rental payments due in March have also been deferred, and the group has agreed extended payment terms with many landlords.

Since the closure of its estate, the group has furloughed 99% of its 43,000 employees. Whilst it has not yet made any redundancies, it added that this was “under review”.

Tim Martin, chairman of JD Wetherspoon, said: “The Covid‐19 outbreak is having a severe impact on the UK pub sector. 

“In these challenging times I would like to thank everyone at the company, its suppliers, landlords, banks and the government for their support and commitment.” 

He added: “We’ve had to take significant action to reduce costs, decisions which have not been taken lightly. We look forward to re‐opening our pubs and hotels and welcoming back our teams in the near future.

“As a result of the actions taken, the cooperation of many stakeholders, and the equity placing announced today, we will be well positioned to reopen our pubs and to return to growth, as the market recovers.”

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