Wetherspoons sees revenue slump as pubs wait for reopening

Pubs group JD Wetherspoon has seen revenue more than halve in its latest results, as chairman Tim Martin criticised pandemic-driven restrictions on the industry that he said “appear to have had no real basis in common sense or science”. Revenue for the 26 weeks to 24 January stood at £431.1m, according to the company’s preliminary results, down from £933m a year earlier. Its pretax loss after exceptional items was £68m, compared to a profit of £35.7m a year ago. Pubs are expected to reopen on 12 April. Martin said: “It remains to be seen whether the government will adhere to its reopening plan, following the successful vaccination programme – or whether the knee-jerk reaction to the latest news, which seems to have been the main generator of policy and regulations, will continue.” The company opened two new pubs and closed or sold two during the half year, leaving the portfolio flat at 872. Martin said the business has now sold most of the 100 pubs it put on the market during recent years. Its freehold/leasehold spit is now 64.4%/35.6%, compared to 43.4%/56.6% a decade ago. Martin also used his results statement to criticise the IFRS 16 accounting measure and its treatment of leases, calling it “confusing and misleading” to include lease obligations on the balance sheet. “Of course leases carry a great risk – as so many restaurant companies and retailers have unfortunately demonstrated,” he said. “However, it does not make sense to treat future liabilities in this way – why not treat future business rates or VAT liabilities in this way, if it’s appropriate for rent? “The most important criticism of IFRS 16 is that the complexity which it creates means that it will be understood by only experts – in general, good for the experts, but bad for business efficiency, shareholders and the public.” To send feedback, e-mail tim.burke@egi.co.uk or tweet @_tim_burke or @estatesgazette