Pub chain Wetherspoon hopes to reopen in June
United Kingdom | One of the UK’s largest pub operators, JD Wetherspoon, has floated the idea of reopening its pubs in late June, but many in the hospitality industry see that as wishful thinking.
After the UK imposed a lockdown in March 2020, Wetherspoon’s rough and ready Chairman Tim Martin, 64, who had relentlessly campaigned for Brexit, caused widespread outrage. He suggested that his 43,000 staff could go and work for Tesco if he had to shut down. At the time, supermarkets were seeking to recruit more staff to deal with stockpiling demand.
Fortunately, in April, the government’s furlough (job retention) scheme kicked in, allowing Wetherspoon to retain the vast majority of employees, whilst its 874 pubs were in “hibernation”.
More than 99 percent of staff have been furloughed and the company said they had received 80 percent of their March salaries.
Holding out a tin cup
Mr Martin also said that while the chain had saved GBP 60 million (USD 75 million) through the business rates holiday, it had had to negotiate extended payment terms with a minority of suppliers and defer the majority of rents.
In its 2019 financial year (ended 28 July 2019), Wetherspoon hiked turnover 7 percent to GBP 1.8 billion (USD 2.3 billion) year-on-year, while operating profit remained flat at GBP 132 million (USD 163 million).
Reporting its half-year results (until 26 January 2020) on 20 March, Wetherspoon announced that turnover rose 5 percent to GBP 933 million (USD 1.2 billion) and operating profit increased 21 percent to GBP 77 million (USD 95 million).
Because of the pandemic, the company decided to delay most capital projects and reduce expenditure, where possible, including the cancellation of the interim dividend. Mr Martin, along with CEO John Hutson, will take a 50 percent salary cut.
The pub chain now plans to raise GBP 141 million (USD 174 million) in a share placing. It also said it expects to be eligible for a loan of up to GBP 50 million (USD 62 million) under the government’s Large Business Interruption Loan Scheme.
