Wetherspoon closes dozens of pubs as it navigates £688m debt
JD Wetherspoon has said it has sold, closed, or surrendered 28 pubs in the financial year-to-date, while only opening three, as the chain looks to deal with a £688m debt.
However, the group said that the idea that the pub disposals were a money-raising exercise is a “misinterpretation” adding that the disposals had raised “relatively modest amounts”.
JD Wetherspoon said that of the disposed pubs, 15 were leasehold, where the lease had either expired or the group had exercised a ‘break clause’. It said that 12 of these properties had a nearby JD Wetherspoon pub within around a one mile radius.
Regarding the remaining 13 pubs, 11 of these also had another Wetherspoon pub nearby, the chain said.
The 28 disposals generated a net cash inflow of £6.5m.
22 of the chain’s pubs remain on the market or are under offer. JD Wetherspoon currently has a trading estate of 827 pubs.
JD Wetherspoon’s £688m debt was around £114m lower than what was reported in its 2020 financial year interim results, immediately before the start of the Pandemic. Since then, the chain said it has invested £116 million into new pubs, £82 million into freehold reversions and has raised equity of around £240 million.
The business has also raised £169m through interest rates swaps, and said its free cash flow this financial year is anticipated to be “substantially in excess” of its profit before tax.
Tim Martin, chair of JD Wetherspoon, said: “The company expects profits in the current financial year to be in line with market expectations.
“As a result of a continued improvement in sales and a slightly reduced expectation for cost increases, for example energy costs, the company anticipates an improved outcome for the next financial year”.