March 20, 2020 / 7:59 AM / 10 days ago

UPDATE 2-UK pubs operator Wetherspoon says in favour of staying open despite virus

* No health benefits from shutting pubs - Tim Martin

* Company warns on profit, cancels dividend

* Company says it has enough liquidity

* Shares jump 27% (Adds pubs to stay open, shares, analyst comments)

By Tanishaa Nadkar

March 20 (Reuters) - Pubs in the UK should stay open during the coronavirus outbreak and there are no health benefits to shutting them, J D Wetherspoon Chairman Tim Martin said on Friday, despite the government asking people to avoid them.

Its pubs will stay open with extra precautions, such as asking people to not queue at the bar, until the government orders them shut, Martin said.

“Even under extreme duress, we would keep pubs open,” Martin said on a call with media.

Prime Minister Boris Johnson on Monday essentially shut down social life in Britain and ordered the most vulnerable to isolate for 12 weeks, as the country steps up efforts to stem the spread of the virus.

While the government has not ordered pubs to shut completely, it is due to make an announcement on Friday evening where it could take further measures.

Shares in the pub operator jumped 27.3% to 717 pence by 0936 GMT after the company said it had enough liquidity to maintain operations at a substantially lower level of sales and as it outperformed the sector last week.

However, the company cancelled its dividend and warned of profit coming in below market expectations, joining the ranks of peers Marston’s and Mitchells & Butlers which have warned on lower sales.

Martin, who drew criticism for his comments from social media users, said the company would also delay most capital projects and cut spending.

“Not paying out a dividend is a sensible move because in these uncertain times, cash is king. Weatherspoon confirmed it has ‘sufficient’ liquidity, and that should reassure the market,” CMC Markets analyst David Madden said.

Sales fell 4.5% last week, compared to a fall of 14% at bars, data from Coffer Peach Business Tracker showed.

Martin said Wetherspoon is working closely with its banks, landlords and suppliers and that the government’s proposals on business rates relief and credit guarantee facilities will also help.

“Wetherspoon price themselves at the lower end of the market when it comes to drinks and food, and that tactic has paid off as the group keeps expanding at a time when smaller pubs are finding trading tough,” Madden said.

This week, Martin said the British government was making a “tactical error” in shutting down social life to combat the spread of the coronavirus, a move that could destroy the tax base and cripple the economy. (Reporting by Tanishaa Nadkar and Samantha Machado in Bengaluru, and Kate Holton in London; Editing by Aditya Soni)

0 : 0
  • narrow-browser-and-phone
  • medium-browser-and-portrait-tablet
  • landscape-tablet
  • medium-wide-browser
  • wide-browser-and-larger
  • medium-browser-and-landscape-tablet
  • medium-wide-browser-and-larger
  • above-phone
  • portrait-tablet-and-above
  • above-portrait-tablet
  • landscape-tablet-and-above
  • landscape-tablet-and-medium-wide-browser
  • portrait-tablet-and-below
  • landscape-tablet-and-below