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Wetherspoon raises £93.7m in new shares as it loses £4.1m a week

Tom Belger
·Finance and policy reporter
·2-min read
A worker serves a beer at The Holland Tringham Wetherspoons pub after it reopened following the outbreak of the coronavirus disease (COVID-19), in London, Britain July 4, 2020. REUTERS/Hannah McKay
A worker serves a beer at The Holland Tringham, a Wetherspoons pub, after it reopened in July. Photo: REUTERS/Hannah McKay

The pub chain Wetherspoon (JDW.L) has raised £93.7m ($127.9m) in new shares, as it battles to survive the coronavirus pandemic.

The company sought to build up its cash buffers as it expects its pubs to remain closed by lockdown restrictions until April. It said it was burning through around £4.1m a week while pubs were shut.

The funds raised will also help it cope even if sales are “very low” after re-opening, and even allow it to snap up pub sites “at favourable prices as a result of the pandemic.”

It is considering buying the freeholds of some central London pubs where it is currently a tenant, and properties next door to successful pubs.

The placing of new shares at a price of 1,120p marked a 5.2% discount to the closing price on 19 January, according to an update to investors on Wednesday.

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More than eight million shares were issued, making up just under 7% of its total shares.They are due to be admitted to the London Stock Exchange on Friday.

Chairman Tim Martin said on Tuesday: “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.”

Wetherspoons released multiple potential scenarios and their impact on its revenues, but its main assumption is that pubs will reopen at the start of April.

It expects total sales in 2021 to slump by 30% to £879m, after a 31% decline in 2020.

Like-for-like are expected to be down 50% after reopening and only edge higher by 5% a week as they did over last summer. They are forecast to level out at a 15% decline from mid-May until the end of the financial year.

But it predicts a 107% surge in sales in 2022.

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