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01 October 2021

JD Wetherspoon Reports Record Losses Due to Pandemic

UK pub chain JD Wetherspoon has revealed record losses in its latest financial report. The firm, which was forced to close all of its pubs for long periods in 2020 due to COVID-19 lockdowns, reported losses of £154.7m in the year to 25th July 2021, after losses of £34.1m in the previous year.

Commenting on his firm’s results, the somewhat outspoken Chairman and founder Tim Martin identified COVID-19 as the clear and obvious cause of the losses, but suggested that the UK Government’s “use of lockdowns and draconian restrictions” continues to be the biggest threat to the hospitality industry.

“Pubs have been at the forefront of business closures during the pandemic, at great cost to the industry - but at even greater cost to the Treasury,” said Martin.

“The biggest threat to the pub industry, and also, inter alia, to restaurants, theatres, cinemas, airlines and travel companies, relates to the precedent set by the government for the use of lockdowns and draconian restrictions, imposed under emergency powers,” he added. “This threat, which is also a threat to civil society and democracy, has been regularly articulated by many commentators.

“In spite of these obstacles, Wetherspoon is cautiously optimistic about the outcome for the financial year, on the basis that there is no further resort to lockdowns or onerous restrictions,” Martin said.

Although the firm noted that there were signs of recovery following the lifting of restrictions, it said that it was struggling to recruit staff, following a similar trend in many other sectors in the UK. In July, a survey by the British Chambers of Commerce found that 38% of the 5,700 businesses asked hoped to take on more new workers within three months.

However, the report also found that the percentage of firms facing difficulties in attracting new candidates also rose sharply for the second quarter in succession, from 63% in the first quarter of 2021, to 70% in the second.
The ongoing recruitment crisis has been fuelled by 1.3 million non-UK citizens leaving the country over the last year with many of them unable or unwilling to return. Similarly, the UK is now facing a skills shortage, not least in the logistics industry.

In a June 2021 letter to Prime Minister Boris Johnson, the Road Haulage Association estimated that the country was short of over 100,000 heavy goods vehicle (HGV) drivers which has ultimately led to the empty shelves and lack of fuel seen in many places around the UK in recent weeks.

While JD Wetherspoon’s latest results fail to note any impact the current HGV driver shortage may have on its business, there are growing concerns that if action isn’t taken now, the problem could get worse in the run up to Christmas.

Please note that investments and income arising from them can fall as well as rise in value. This communication is for information only and does not constitute a recommendation to buy or sell the shares of the investments mentioned.
JD Wetherspoon Reports Record Losses Due to Pandemic

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