Wetherspoon seeks £92m cash boost as pubs expected to stay shut until March

PA

Pub giant JD Wetherspoon has said that it expects its pubs to remain shut until at least the end of March as it plans to issue new stocks to secure a £92 million cash boost.

The company said it has made “zero” sales in 2021 so far as all of its 872 pubs have remained shut in the face of coronavirus restrictions.

It added that more than 99% of its 37,674 current employees are furloughed as a result.

The group has reduced its staff levels by more than 6,000 since the start of March, including a raft of redundancies at its head office and airport sites.

Wetherspoons financials
Wetherspoons financials

Wetherspoon told shareholders that it is currently burning through £4.1 million each week while its sites are shut due to the UK lockdown.

It warned that it is currently operating on the assumption that sites will remain shut until the end of March and it predicts that it will take until 2022 to return to trading levels from 2019.

In a separate announcement to the stock market, Wetherspoon said it plans to raise between £92.1 million and £93.7 million by issuing 8.4 million new shares.

The discount chain said it believes it has cash reserves to last it until the end of the current financial year without securing an additional loan through the Government’s Coronavirus Large Business Interruption Loan Scheme (CLBILS).

It said it benefited from the 5% reduction in VAT on food and soft drinks when its sites reopened last year and is calling on the Government to extend the reduction.

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

“After a number of false starts, the hospitality industry generally anticipates a return to more normal trading patterns in the spring and summer, as a result of the introduction of a mass vaccination programme.

“The equity placing announced today will help the company, along with the other actions it has taken, to emerge from the pandemic in a strong position.

“Very many thanks to everyone at the company, and also to its shareholders, suppliers, landlords and banks, for their support and commitment.”

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