JD Wetherspoon said yesterday it was impossible to give guidance on full-year profits after the Covid-19 virus started wiping out business in its pubs.
The group kept trading up until yesterday, when Prime Minister Boris Johnson ordered a total shutdown of pubs.
Sales across JD Wetherspoon’s business fell by 4.5% in the seven days leading up to last Sunday as the pandemic started scaring customers off, and the decline gathered pace this week.
Shares in the company rocketed more than 25% yesterday, however, after it reported a rise in profits and revenue in the first half of its trading year.
Pre-tax profits for the six months to January 26 were up by 15% year-on-year, to £57.9 million, while revenue was 4.9% higher at £933m.
Like-for-like sales rose by 5%, with bar, food and slot machine takings up by 4.2%, 5.6% and 20% respectively.
Despite the strong performance, the firm has cancelled its interim dividend – owing to the uncertainty caused by the spread of Covid-19.
Tim Martin, the group’s founder and chairman, said: “It is impossible to provide realistic guidance on our performance in the remainder of the financial year. 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 (UK) 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.”
Mr Martin made only fleeting references to the UK’s withdrawal from the EU, a hot topic of the high-profile Brexiteer, in his results statement.
But he had plenty to say about corporate governance practice, calling for a more “sensible” system as the current one was “remote, counterproductive and inflexible”.
He again highlighted his previous comments on the subject, when he said the current governance system created “short-termist and inexperienced boards, which have minimal representation from executives and the workforce – the people who are best placed to understand and run the business”.