Wetherspoon raises £90m and hints at pub deal spree

JD Wetherspoon this evening set out plans to raise £90 million from investors to boost its balance sheet, and hinted at deals to buy pubs battered by lockdown.

The pub group, led by fierce government critic Tim Martin, said sales are down 28% in the 15 weeks to November 8. From December 31 all pubs have been shut, leaving sales at nothing.

The fund raiser, led by Investec, will see 8.4 million shares placed at between 1100p and 1120p.

Tonight the stock was up 4% at 1183p.

Martin said: “The Covid-19 outbreak is having a severe impact on the UK pub sector. After a number of false starts, the hospitality industry generally anticipates a return to more normal trading patterns in the spring and summer, as a result of the introduction of a mass vaccination programme. The equity placing announced today will help the company, along with the other actions it has taken, to emerge from the pandemic in a strong position.”

The statement to the City also noted: “As in previous recessions, property prices are likely to decline, presenting opportunities for acquisitions at attractive prices.”

That suggests ‘Spoons is on the hunt to snap up pubs that might otherwise not re-open from distressed sellers.

Martin has always argued that pubs are not spreaders of Covid and should have stayed open, with restrictions.

The company is assuming that pubs will be closed until the end of March. It set out other scenarios to reassure the City that it is likely to survive no matter what.

At present, more than 99% of its 37,674 employees are furloughed.

The group has reduced its staff levels by more than 6,000 since the start of March, including a raft of redundancies at its head office and airport sites.

Wetherspoon told shareholders that it is burning through £4.1 million each week while its sites are shut due to the UK lockdown.

It predicts that it will take until 2022 to return to trading levels from 2019.