Wetherspoons cancels divi, warns on profit as Covid-19 slams sales

Wetherspoons cancelled its interim dividend and warned on full year profits as the coronavirus and government advice to stay away from pubs and restaurants hit current sales.

The company on Friday sales had slumped at a "significantly higher rate" after the warning from Prime Minister Boris Johnson. It added that it was "impossible to provide realistic guidance on our performance in the remainder of the financial year".

“As recently reported, in the six weeks to 8 March 2020, like-for-like sales increased by 3.2% and total sales by 2.9%. In the following week, to 15 March, sales declined by 4.5%. In the early part of the current week, following the prime minister's advice to avoid pubs, sales have declined at a significantly higher rate,” the company said on Friday.

It also said it was delaying capital spending and cutting costs to conserve cash. The government on Tuesday was forced into releasing a £350bn package of loans, grants and tax reliefs for business after issuing its advice to stay away without warning.

"As a result of these actions, combined with the government's proposals on business rates relief and credit guarantee facilities, the company believes it has sufficient liquidity to maintain operations at a substantially lower level of sales," the company said.

"As many companies and commentators have noted, the current health crisis places the hospitality industry, in particular, under great pressure. Wetherspoon, like our peers, will be working closely with all parties, including employees, banks, landlords and suppliers, in order to emerge from the situation in the best shape."

Interim pre-tax profits rose 15.2% to £58m on revenues of £933m, up 5%.

Like-for-like bar sales increased by 4.2%, food by 5.6% and fruit/slot machines by 20.3%. Like-for-like hotel room sales fell 1.3%. Bar sales were 60.0% of total sales, food 36.1%, fruit/slot machines 2.8% and rooms 1.1%, the company said.