JD Wetherspoon profit climbs but COVID-19 hits current sales

JD Wetherspoon profit climbs but COVID-19 hits current sales

JD Wetherspoon profit climbs but COVID-19 hits current sales

JD Wetherspoon plc (LON:JDW) shares soared on Friday after it posted a rise in profit for the half year.

Shares in the pub company were up by over 30% during trading on Friday.

For the 26 weeks ended 26 January 2020, profit before tax rose by 15.2% to £57.9 million, up from the £50.3 million figure recorded during the same period a year prior.

Meanwhile, revenue grew by 4.9% to £933 million and like for like sales were up by 5%.

Commenting on the future, the Chairman of JD Wetherspoon Tim Martin said that it is “very difficult” to make predictions as the COVID-19 outbreak continues to develop.

Sales have been declining at the pub company as people are being told to social distance.

“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,” Tim Martin said.

“It is obviously very difficult to predict, in these circumstances, how events will unfold in future weeks and months, but we now anticipate profits being below market expectations, so long as the current health scare continues. As a result of this uncertainty, it is impossible to provide realistic guidance on our performance in the remainder of the financial year,” the Chairman added.

“The company has decided to delay most capital projects and to reduce expenditure, where possible, including the cancellation of the interim dividend. 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.”

“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.”

The government has accelerated measures to contain the virus this week, telling individuals to avoid social gatherings and non-essential travel, which has put significant strain on the hospitality sector.

Shares in JD Wetherspoon plc (LON:JDW) were up on Friday, trading at +31.56% as of 12:59 GMT.