JD Wetherspoon share price set to slide as Covid-19 curbs hit profits

The pub chain saw its shares tumble more than 19% on Friday after it recorded its first annual loss, with its outspoken boss Tim Martin blaming its poor performance on the UK government’s Covid-19 restrictions.

  • JD Wetherspoon shares slide 19% after first annual loss due to Covid-19 restrictions
  • The pub chain blamed the 10pm curfew for a 15% decline in like-for-like sales
  • Pubs and restaurants under pressure as London sees Tier-2 restrictions imposed on Saturday

JD Wetherspoon shares are down more than 13% on Friday after the company swung to its first annual loss, with its outspoken boss Tim Martin blaming its poor performance on the UK government’s Covid-19 restrictions.

‘These are extraordinarily difficult for the public and publicans to understand and to implement,’ Martin said. ‘None of the new regulations appears to have any obvious basis in science.’

‘The company and the entire hospitality industry need a more sensible and consistent regulatory framework in which to operate - the current environment of lockdowns, curfews and constantly changing regulations and announcements threatens not only pub companies, but the entire economy,’ he added.

JD Wetherspoon closed 19% lower to 773p per share on Friday, with the stock down 54% year-to-date.

JD Wetherspoon shares slump as company swings to annual loss

The pub chain reported a pre-tax loss of £34 million compared with a £102 million profit a year prior, with revenues falling more a third to £1.26 billion, forcing the company to scrap its dividend.

In an effort to strengthen its balance sheet and offset the economic impact of the coronavirus pandemic, JD Wetherspoon has cut 108 jobs from its head office in addition to the 130 it has previously announced and is looking to cut 450 of its 1000 staff working at airports.

‘The recent curfew and introduction of table service only have been particularly damaging for trade, depressing sales for customers who find it too much 'faff', at the same time as substantially increasing costs,’ the company said.

JD Wetherspoon offers dim outlook

In the company’s annual results, it admits that the 10pm curfew imposed by the government and the introduction of ‘table service only’ has been particularly damaging for trade, with like-for like sales in the first 11 weeks 15% lower than over the same period a year prior.

The outlook for pubs over the remainder of the current financial year is even more unpredictable than hitherto,’ the company said.

‘There is a need for a more sensible and consistent regulatory framework in which to operate.’

How to trade stocks with IG

Looking to trade JD Wetherspoon and other stocks? Open a live or demo account with IG and buy (long) or sell (short) shares using derivatives like CFDs in a few easy steps:

  1. Create an IG trading account or log in to your existing account
  2. Enter ‘JD Wetherspoon PLC’ in the search bar and select it
  3. Choose your position size
  4. Click on ‘buy’ or ‘sell’ in the deal ticket
  5. Confirm the trade

IGA, may distribute information/research produced by its respective foreign affiliates within the IG Group of companies pursuant to an arrangement under Regulation 32C of the Financial Advisers Regulations. Where the research is distributed in Singapore to a person who is not an Accredited Investor, Expert Investor or an Institutional Investor, IGA accepts legal responsibility for the contents of the report to such persons only to the extent required by law. Singapore recipients should contact IGA at 6390 5118 for matters arising from, or in connection with the information distributed.

The information/research herein is prepared by IG Asia Pte Ltd (IGA) and its foreign affiliated companies (collectively known as the IG Group) and is intended for general circulation only. It does not take into account the specific investment objectives, financial situation, or particular needs of any particular person. You should take into account your specific investment objectives, financial situation, and particular needs before making a commitment to trade, including seeking advice from an independent financial adviser regarding the suitability of the investment, under a separate engagement, as you deem fit.

Please see important Research Disclaimer.

Seize a share opportunity today

Go long or short on thousands of international stocks.

  • Increase your market exposure with leverage
  • Get spreads from just 0.1% on major global shares
  • Trade CFDs straight into order books with direct market access

Live prices on most popular markets

  • Forex
  • Shares
  • Indices
liveprices.javascriptrequired
liveprices.javascriptrequired

Prices above are subject to our website terms and agreements. Prices are indicative only. All shares prices are delayed by at least 15 mins.

liveprices.javascriptrequired

Prices above are subject to our website terms and agreements. Prices are indicative only. All shares prices are delayed by at least 20 mins.

The Momentum Report

Get the week’s momentum report sent directly to your inbox every Monday for FREE. The Week Ahead gives you a full calendar of upcoming key events to monitor in the coming week, as well as commentary and insight from our expert analysts on the major indices to watch.

For more info on how we might use your data, see our privacy notice and access policy and privacy webpage.

You might be interested in…

Find out what charges your trades could incur with our transparent fee structure.

Discover why so many clients choose us, and what makes us a world-leading provider of CFDs.

Stay on top of upcoming market-moving events with our customisable economic calendar.