J D Wetherspoon to seek debt waivers
J D Wetherspoon (LON:JDW) says it’s on course to make another loss this year as it tries to cope with the aftermath of Covid-related closures.
The FTSE 250 listed company, which has been hard hit by pandemic restrictions like many others in the hospitality sector, says it has negotiated debt agreement waivers up to this date and says it expects to enter talks with its lenders over more waivers for the coming financial year.
The pub giant has been struggling with food and drink sales and is still seeing numbers well below pre-pandemic levels despite the easing of restrictions and the start of the Euro 2021 tournament.
J D Wetherspoon has said that it anticipates making a loss for the year ending July 25. It expects its net debt to fall to £833 million by the end of this financial year from £865.
Between April 12 and May 16, Wetherspoons like-for-like sales were nearly 50% lower than during the same period in 2019.
But from June 10 to July 4, sales were down by 20.8% after the Euros began thanks to its longstanding policy of not screening most matches.
“Although across the sector outside terraces are heaving and revellers are making the most of their new found social freedoms, sales at the chains are still like a weak pint of beer.
“The company may be ruing its decision only to televise a handful of matches as much of the football fan crowd has clearly gone elsewhere,” said Susannah Streeter, senior analyst at Hargreaves Lansdown.
Wetherspoon has had to make hundreds of employees redundant and raise money to get through the global health crisis.
Despite the group’s problems, Wetherspoon said it “remains in a sound financial position” and plans to open another 18 new pubs, upgrade 57 others, and invest about £750m in similar projects in the next ten years.
J D Wetherspoon Shares fell 1% in morning trading.