Pub group JD Wetherspoon has reported a pre-tax loss of £30.4m in the 53 weeks to 31 July 2022., after confirming plans to sell 32 pubs across the UK.
The pub chain said it is struggling to get customers back into its sites following the coronavirus lockdown.
Chairman Tim Martin said pubs faced a “momentous challenge” to attract back customers who had “filled their fridges” with cheaper supermarket beer during lockdown.
“In the first 9 weeks of the current financial year, to 2 October 2022, like-for-like sales increased by 10.1%, compared to the 9 weeks to 3 October 2021.
“The company has improved its prospects in a number of ways in recent financial years – we own an increasing percentage of freehold properties; the balance sheet has been strengthened; interest rates have been fixed at low levels until 2031; we have a large contingent of long-serving pub staff and underlying sales are improving.
“However, as a result of the previously reported increases in labour and repair costs and the potentially adverse effects of rises in interest rates and energy costs on the economy, firm predictions are hard to make.”
Like-for-like sales during the period were down 4.7% but have risen 10.1% in the nine weeks to 2 October. The company reported a £102.5m pre-tax profit in 2019.
The chain, which operates around 800 pubs in the UK and Ireland, previously said losses would be higher than expected this year after raising staff wages and investing in site repairs.
Tim Martin said predictions on the future of the company were hard to make but that he was “cautiously optimistic” and warned the biggest threat to the hospitality industry was the possibility of further lockdowns and restrictions being imposed.
He added that the lower levels of tax paid by supermarkets was also a threat to the future of the pub sector.
“The other major threat to the hospitality industry is the huge and unjustifiable tax advantage that supermarket enjoy. The hospitality industry pays far higher levels of VAT and business rates than supermarkets. This competitive disadvantage has had an increasingly debilitating impact on the hospitality industry and will undoubtedly result in long-term financial weakness vis a vis supermarkets – which will also be harmful toemployees, the Treasury and the overall economy.
“These caveats aside, in the absence of further lockdowns or restrictions, the company is cautiously optimistic, for the reasons we have outlined, about future prospects.
During the 53-week period, Wetherspoon sold, closed or terminated the leases of 15 pubs, giving rise to a cash inflow of £5.9m.