JD Wetherspoons to tap investors for cash to preserve liquidity and finance acquisitions

"As in previous recessions, property prices are likely to decline, presenting opportunities for acquisitions at attractive prices," the company said in a statement.

The company was also motivated by a desire to conserve cash and "ensure" that it had sufficient liquidity to ride out the pandemic.

Nevertheless, its long-term focus remained the same, management said: "excellent products, at reasonable prices".

All of its pubs had remained closed since the turn of the year and its sales had therefore been nil.

Yet between 2008 and 2019, average gross sales at its pubs had jumped from £30,100 per week to £48,000 and the company's total sales had increased by £911.3m, the company pointed out.

Furthemore, during the current closure period, Wetherspoons had furloughed over 99% of its workforce, reducing its related costs to £800,000 a week.

The company's headcount had also shrunk, from 43,741 as of 1 March 2020 to 37,674 as at 14 January of 2021.

Wetherspoon's board had also slashed its remuneration in half during the current closure, while its chief executive officer's pay had been cut by 25%.

General costs had also been cut, from a weekly run rate of £4m pre-Covid-19 to roughly £1.1m and expendiures on repairs and maintenance from £1.6m to £0.25m.

Capital expenditures for the financial year-to-date meanwhile fell to £22m, against a prior year figure of £127.5m.

Most deferred payments to suppliers had also been met and the company was in talks with landlords to reach mutually acceptable deferal agreements.

During the first lockdown the pub owner had been able to agree deferrals with roughly 90% of its landlords.

Management's current expectations were for its pubs to remain closed until the end of March, but added that "the duration of the current lockdown and ongoing restrictions is uncertain at this stage."

"In the absence of a share placing and an additional CLBILS loan, the company estimates that it has sufficient liquidity to the end of the current financial year," Wetherspoons said.

The equity placing was not being underwritten.

As at 14 January, JD Wetherspoon said that it had £139.1m of liquidity.

Shares of Wetherspoon closed the Tuesday session 4.14% higher at 1,183.0p, a post-Covid high.