Cut-price pub chain, JD Wetherspoon (LON:JDW), saw its shares slide on Friday, as It announced 42% of its entire UK estate would remain closed, subject to new tier restrictions beginning next week.
The company said that of its outlets, 13 pubs in England and 51 in Wales would be classified as being in tier one or a tier one equivalent. Meanwhile, 435 of its branches – including 17 in Scotland – will be in tier two, meaning customers will have to take advantage of a meal deal in order to get their hands on a hard-earned pint.
Finally, Some 366 pubs will remain closed, with 315 in England, and 51 in Scotland and Northern Ireland, falling within the tier three strata. Wetherspoons said that the decision to keep the doors shut on these branches was taken as takeaways are “unlikely to be a realistic option”.
The bombastic Wetherspoons Founder and Chair, Tim Martin, responded to the pub closures and implementation of an updated tier system:
“The company has campaigned for pubs to revert to the rules agreed between the pub industry, civil servants, local authorities and health officials, which were introduced when pubs reopened in July.”
“These rules greatly reduced pub capacity and provided strict social distancing and hygiene standards but, with difficultly, allowed pubs to trade viably. It is very disappointing that yet another raft of regulations has been introduced, which has effectively closed half our pubs. In reality, the government has extended a form of lockdown, by stealth, in large swathes of the country.”
“There has been no evidence of widespread transmission of the coronavirus in pubs, as the Test and Trace system has evidenced. As councillor Ian Ward, leader of Birmingham City Council, recently said:”
“The data we have shows that the infection rate has risen, mainly due to social interactions, particularly private household gatherings. In shops and hospitality venues there are strict measures in place to ensure they are COVID-safe, whereas it is much easier to inadvertently pass on the virus in someone’s house, where people are more relaxed and less vigilant”.
Following the update, Wetherspoons shares sunk 2.11%, down to 1,111.00p apiece 27/11/20. This price is below its post-lockdown high of 1,201p, but around 3% ahead of analysts’ target price of 1,080p per share.
The company currently has a p/e ratio of -12.41, while analysts have a consensus ‘Hold’ stance on the stock, and the Marketbeat community give it a 72.51% “underperform” rating.