JD Wetherspoon has reported its like-for-like sales from 17 May to 4 July, when pubs were allowed full re- opening, were down 14.6% on 2019 levels, and between 12 April and 16 May, when only outdoor trading was allowed, with only 500 of its pubs were opened, and like-for-like bar and food sales were minus 49.0% compared with the same period in 2019.
For the period from 17 May to 10 June, before the UEFA Euro 2020 football tournament started, like-for-like sales were minus 8.1%. From 10 June to 4 July, during the tournament, like-for-like sales were minus 20.8%.
Apart from a limited number of exceptions for individual matches, Wetherspoon pubs have not televised UEFA Euro 2020 games. The company said trading had been helped by the addition of outside seating. It added landlords, landowners, and local and licensing authorities have been extremely flexible in accommodating extra outside space, which had helped Wetherspoon and the licensed trade generally.
As at 4 July 2021, 850 Wetherspoon pubs were open, out of a total of 860. Most of the closed pubs are at airports. The company currently has a pipeline of 75 projects,18 are new pubs and 57 are extensions and upgrades to existing pubs.
The company also said the interim increase in VAT later this year will mean it will have to increase its food prices by around 40p per meal. The pub chain had been passing on savings from the VAT cut to customers, lowering the price of its food as a result during lockdown.
The government provisionally reduced VAT to 5% to support the hospitality industry while it was affected by Covid-19 lockdown restrictions. However, from 30 September it is due to increase to 12.5% for six months, returning to 20% in April 2022.
The company said it remains in a sound financial position. Net debt was £865m on 4 July 2021 and is expected to be around £833m at the end of this financial year. The company has received covenant waivers, up to and including the quarter to July 2021. The normal Ebitda-related covenants have been replaced with a minimum liquidity threshold of £75m. Liquidity was £224m on 4 July 2021 and is expected to be about £253m at the end of the financial year. The company proposes to enter discussions with its lenders regarding waivers for the next financial year in due course.