Buy
Sell
Share Name Share Symbol Market Type Share ISIN Share Description
Wetherspoon ( J.d.) Plc LSE:JDW London Ordinary Share GB0001638955 ORD 2P
  Price Change % Change Share Price Bid Price Offer Price High Price Low Price Open Price Shares Traded Last Trade
  6.00 0.7% 866.00 865.50 866.50 892.50 848.00 850.00 215,966 13:48:52
Industry Sector Turnover (m) Profit (m) EPS - Basic PE Ratio Market Cap (m)
Travel & Leisure 1,262.0 -94.8 -82.6 - 1,042

Wetherspoon (JD) PLC Preliminary Results

16/10/2020 7:00am

UK Regulatory (RNS & others)


Wetherspoon ( J.d.) (LSE:JDW)
Historical Stock Chart


From Sep 2020 to Oct 2020

Click Here for more Wetherspoon ( J.d.) Charts.

TIDMJDW

RNS Number : 2716C

Wetherspoon (JD) PLC

16 October 2020

16 October 2020

J D WETHERSPOON PLC

PRELIMINARY RESULTS

(For the 52 weeks ended 26 July 2020)

 
 FINANCIAL HIGHLIGHTS                                           Var% 
 
 Before exceptional items (pre-IFRS 16) 
       Like-for-like sales                                     -29.5% 
       Revenue GBP1,262.0m (2019: GBP1,818.8m)                 -30.6% 
       (Loss)/profit before tax -GBP34.1m (2019: GBP102.5m)    -133.3% 
       Operating profit GBP7.2m (2019: GBP131.9m)              -94.6% 
       Earnings per share (including shares held in trust) 
        -27.6p (2019: 75.5p)                                   -136.6% 
       Free cash flow per share -54.2p (2019: 92.0p)           -158.9% 
       Full year dividend 0.0p (2019: 12.0p)                    -100% 
 
 Before exceptional items (post-IFRS 16) 
 IFRS 16 did not apply in the previous financial year, 
  so no comparison is included. 
      Loss before tax -GBP44.7m 
       Operating profit GBP17.0m 
       Earnings per share (including shares held in trust) 
        -35.5p 
 
 
 After exceptional items (pre-IFRS 16) 
      (Loss)/profit before tax -GBP94.8m (2019: GBP95.4m)      -199.3% 
      Operating (loss)/profit -GBP6.0m (2019: 131.9m)          -104.6% 
      Earnings per share (including shares held in trust) 
       -82.6p (2019: 69.0p)                                    -219.7% 
 
 After exceptional items* (post-IFRS 16) 
      Loss before tax -GBP105.4m 
      Operating profit GBP3.8m 
      Earnings per share (including shares held in trust) 
       -89.9p 
 

*Exceptional items as disclosed in account note 4.

Commenting on the results, Tim Martin, the Chairman of J D Wetherspoon plc, said:

"Warren Buffett, chairman of Berkshire Hathaway, commented in 1989 (below) on the dangers of what he calls the 'institutional imperative' and how it compels companies to stay on the same course, even if it's the wrong course - and how it compels companies to imitate competitors. The institutional imperative applies just as much to governments as it does to boards of directors. Professor Johan Giesecke, the Warren Buffett of epidemiology, is obviously perplexed in an April TV interview (appendix 1 below) as to how 100 countries all reacted, almost overnight, in the same way to the Covid-19 problem, based on the deeply flawed analysis of Imperial College.

"As Warren Buffett explains:

"My most surprising discovery: the overwhelming importance in business of an unseen force that we might call "the institutional imperative." In business school, I was given no hint of the imperative's existence and I did not intuitively understand it when I entered the business world. I thought then that decent, intelligent, and experienced managers would automatically make rational business decisions. But I learned over time that isn't so. Instead, rationality frequently wilts when the institutional imperative comes into play."

"For example: (1) As if governed by Newton's First Law of Motion, an institution will resist any change in its current direction; (2) Just as work expands to fill available time, corporate projects or acquisitions will materialize to soak up available funds; (3) Any business craving of the leader, however foolish, will be quickly supported by detailed rate-of-return and strategic studies prepared by his troops; and (4) The behavior of peer companies, whether they are expanding, acquiring, setting executive compensation or whatever, will be mindlessly imitated."

"Institutional dynamics, not venality or stupidity, set businesses on these courses, which are too often misguided. After making some expensive mistakes because I ignored the power of the imperative, I have tried to organize and manage Berkshire in ways that minimize its influence. Furthermore, Charlie and I have attempted to concentrate our investments in companies that appear alert to the problem."

"Since 100 governments adopted a lockdown strategy, it was very difficult for any government to adopt a different course. However, pubs eventually reopened in England on 4 July and in the rest of the UK shortly thereafter.

"The lockdown was far longer than was necessary to achieve its stated objective of 'flattening the curve' so as to assist the health service. Before pubs reopened, a detailed and comprehensive operating plan for the hospitality industry was nevertheless agreed on among the government, parliamentary committees, UK Hospitality, civil servants and other interested parties.

"The regulations and guidelines reflected in the plan drastically reduced pub capacity, but were carefully thought out and had the backing of the industry, legislators, licensing officials, local authorities and the public.

"For the two months following reopening, it appeared that the hospitality industry, in difficult circumstances, was adapting to the new régime and was getting 'back on its feet', albeit in survival mode.

"It appears that the government and its advisers were clearly uncomfortable as the country emerged from lockdown. They have introduced, without consultation, under emergency powers, an ever-changing raft of ill-thought-out regulations - these are extraordinarily difficult for the public and publicans to understand and to implement. None of the new regulations appears to have any obvious basis in science.

"For example, a requirement for table service was introduced - which is expensive to implement and undermines the essential nature of pubs for many people - pubs have now become like restaurants. Customers can approach the till in a shop, but not in a pub - which is, in no sense, 'scientific'.

"In addition, face-coverings, for which the health benefits are debatable, need not be worn while seated, yet must be worn to go to visit the bathroom - another capricious regulation.

"The most damaging regulation relates to the 10pm curfew, which has few supporters outside of the narrow cloisters of Downing Street and SAGE meetings. This has meant that many thousands of hospitality industry employees, striving to maintain hygiene and social-distancing standards, go off duty at 10pm, leaving people to socialise in homes and at private events which are, in reality, impossible to regulate.

"In marked contrast to the consistency of the comparatively successful Swedish approach, which emphasises social distancing, hygiene and trust in the people, the erratic UK government is jumping from pillar to post and is both tightening and tinkering with regulations, so we are now in quasi-lockdown which is producing visibly worse outcomes than those in Sweden, in respect of both health and the economy.

"Risk cannot be eliminated completely in pubs, but sensible social-distancing and hygiene policies, combined with continued assistance and co-operation from the authorities, should minimise it.

"Like-for-like sales in the first 11 weeks have been 15.0% below those of last year, with strong sales in the first few weeks, followed by a marked slowdown since the introduction of a curfew and other regulations, some of which are referred to above.

"The recent curfew and introduction of table service only have been particularly damaging for trade, depressing sales for customers who find it too much 'faff', at the same time as substantially increasing costs.

"As a result of recent changes in regulations, the outlook for pubs over the remainder of the current financial year is even more unpredictable than hitherto."

"The company has successfully adapted its business, over the last 41 years, to cope with widely different political and economic circumstances. We now employ over 40,000 people, 10,000 of whom are shareholders in the company, and are a major contributor to national income, paying approximately one pound in every thousand of treasury receipts in 2019 and in preceding years.

"However, the company and the entire hospitality industry need a more sensible and consistent regulatory framework in which to operate - the current environment of lockdowns, curfews and constantly changing regulations and announcements threatens not only pub companies, but the entire economy. The most important lesson, as Professor Mark Woolhouse of Edinburgh University has said, is that "lockdown just defers the problem; it doesn't solve it"."

Enquiries:

   John Hutson                         Chief Executive Officer      01923 477777 
   Ben Whitley                          Finance Director                  01923 477777 
   Eddie Gershon                     Company spokesman         07956 392234 

Photographs are available at: www.newscast.co.uk

Notes to editors

1. J D Wetherspoon owns and operates pubs throughout the UK. The Company aims to provide customers with good-quality food and drink, served by well-trained and friendly staff, at reasonable prices. The pubs are individually designed and the Company aims to maintain them in excellent condition.

   2.         Visit our website jdwetherspoon.com 

3. The financial information set out in the announcement does not constitute the company's statutory accounts for the periods ended 26 July 2020 or 28 July 2019. The financial information for the period ended 28 July 2019 is derived from the statutory accounts for that year which have been delivered to the Registrar of Companies. The auditors reported on those accounts: their report was unqualified, did not draw attention to any matters by way of emphasis and did not contain a statement under s498(2) or (3) of the Companies Act 2006. Statutory accounts for 2020 will be delivered to the registrar of companies in due course. The auditors have reported on those accounts: their report was unquali ed, contained an emphasis of matter highlighting a materiality uncertainly related to going concern and did not contain a statement under section 498(2) or (3) of the Companies Act 2006. This announcement has been prepared solely to provide additional information to the shareholders of J D Wetherspoon, in order to meet the requirements of the UK Listing Authority's Disclosure and

Transparency Rules. It should not be relied on by any other party, for other purposes. Forward-looking statements have been made by the directors in good faith using information available up until the date that they approved this statement. Forward-looking statements should be regarded with caution because of inherent uncertainties in economic trends and business risks.

4. The annual report and financial statements 2020 has been published on the Company's website on 16 October 2020.

   5.         The current financial year comprises 52 trading weeks to 25 July 2021. 
   6.         The next trading update will be issued on 11 November 2020. 

CHAIRMAN'S STATEMENT

Financial performance

The company was founded in 1979 - and this is the 37th year since incorporation in 1983. The table below outlines some key aspects of our performance during that period.

Summary accounts for the years ended July 1984 to 2020

 
 
 Financial  Total sales     Profit/(loss)             Earnings  Free cash  Free cash 
      year                                                           flow       flow 
                               before tax            per share             per share 
                          and exceptional   before exceptional 
                                    items                items 
                 GBP000            GBP000                pence     GBP000      pence 
      1984          818               (7)                    0 
      1985        1,890               185                  0.2 
      1986        2,197               219                  0.2 
      1987        3,357               382                  0.3 
      1988        3,709               248                  0.3 
      1989        5,584               789                  0.6        915        0.4 
      1990        7,047               603                  0.4        732        0.4 
      1991       13,192             1,098                  0.8      1,236        0.6 
      1992       21,380             2,020                  1.9      3,563        2.1 
      1993       30,800             4,171                  3.3      5,079        3.9 
      1994       46,600             6,477                  3.6      5,837        3.6 
      1995       68,536             9,713                  4.9     13,495        7.4 
      1996      100,480            15,200                  7.8     20,968       11.2 
      1997      139,444            17,566                  8.7     28,027       14.4 
      1998      188,515            20,165                  9.9     28,448       14.5 
      1999      269,699            26,214                 12.9     40,088       20.3 
      2000      369,628            36,052                 11.8     49,296       24.2 
      2001      483,968            44,317                 14.2     61,197       29.1 
      2002      601,295            53,568                 16.6     71,370       33.5 
      2003      730,913            56,139                 17.0     83,097       38.8 
      2004      787,126            54,074                 17.7     73,477       36.7 
      2005      809,861            47,177                 16.9     68,774       37.1 
      2006      847,516            58,388                 24.1     69,712       42.1 
      2007      888,473            62,024                 28.1     52,379       35.6 
      2008      907,500            58,228                 27.6     71,411       50.6 
      2009      955,119            66,155                 32.6     99,494       71.7 
      2010      996,327            71,015                 36.0     71,344       52.9 
      2011    1,072,014            66,781                 34.1     78,818       57.7 
      2012    1,197,129            72,363                 39.8     91,542       70.4 
      2013    1,280,929            76,943                 44.8     65,349       51.8 
      2014    1,409,333            79,362                 47.0     92,850       74.1 
      2015    1,513,923            77,798                 47.0    109,778       89.8 
      2016    1,595,197            80,610                 48.3     90,485       76.7 
      2017    1,660,750           102,830                 69.2    107,936       97.0 
      2018    1,693,818           107,249                 79.2     93,357       88.4 
      2019    1,818,793           102,459                 75.5     96,998       92.0 
      2020    1,262,048          (34,095)               (27.6)   (58,852)     (54.2) 
 

Notes

Adjustments to statutory numbers

1. Where appropriate, the earnings per share (EPS), as disclosed in the statutory accounts, have been recalculated to take account of share splits, the issue of new shares and capitalisation issues.

2. Free cash flow per share excludes dividends paid which were included in the free cash flow calculations in the annual report and accounts for the years 1995-2000.

3. The weighted average number of shares, EPS and free cash flow per share include those shares held in trust for employee share schemes.

4. Before 2005, the accounts were prepared under UKGAAP. All accounts from 2005 to date have been prepared under IFRS.

5. Apart from the items in notes 1 to 4, all numbers are as reported in each year's published accounts.

6. Financial year 2020 data is based on pre IFRS 16 numbers.

Hygiene Record and Reopening Preparations

For many years, Wetherspoon has emphasised the importance of hygiene standards, an area under close scrutiny today. Local authorities run a 'scores on the doors' scheme in England, Wales and Northern Ireland; this awards pubs from zero to five stars, following inspections by environmental health officers. Wetherspoon is rated the top large pub company, averaging 4.96 out of a maximum of five, with 758 pubs scoring a maximum of five.

Before pubs reopened after lockdown, the company, after consultation with employees, local authorities, the police and licensing officers, invested GBP13.1m to ensure that its staff and customers were safe.

Since reopening, Wetherspoon has operated comprehensive social distancing and hygiene practices in all of its pubs. These include reduced capacity levels, the spacing-out of tables, the installation of floor screens between tables and the addition of till-surround screens at the bar.

Staff conduct regular surface-cleaning, so that all hand contact-points in our pubs are frequently cleaned and sanitised throughout the day. Numerous hand sanitisers have been installed in each pub. All pubs are also thoroughly cleaned at the end of every trading day.

The Financial Consequences of the UK Government's Covid-19 Policies

The financial effects of the closure of pubs by the government in March, which lasted for approximately three months, were severe. Pretax profits* of GBP102m in the financial year ended July 2019 were followed by a loss of GBP34m* in the year of the lockdown - the financial year ended July 2020. In addition, exceptional costs of GBP29.1m were incurred in respect of Covid-19-related matters in FY20.

Wetherspoon and other pub and restaurant companies have always generated far more in taxes than is earned in profits. Wetherspoon generated total taxes of GBP764m in FY19 (see table below). In FY20, mainly as a result of the lockdown, total taxes paid to the government declined by GBP327m to GBP437m, net of furlough payments.

Taxes generated by Wetherspoon (including staff and customers):

 
                             2020    2019 
                             GBPm    GBPm 
VAT                         244.3   357.9 
Alcohol duty                124.2   174.4 
PAYE and NIC                106.6   121.4 
Business rates               39.5    57.3 
Corporation tax              21.5    19.9 
Machine duty                    9    11.6 
Climate change levy           6.1    10.4 
Carbon tax                      0     1.9 
Fuel duty                     1.7     2.2 
Stamp duty                    4.9     3.7 
Sugar tax                       2     2.9 
Premise licence and 
 TV licences                  1.1     0.8 
TOTAL TAX                   560.9   764.4 
Tax per pub (GBP000)        677.6   871.4 
Tax as % of sales          44.40%  42.00% 
Furlough tax rebate        -124.2       0 
TOTAL TAX ADJUSTED 
 FOR FURLOUGH TAX REBATE    436.7   764.4 
Tax per pub adjusted 
 for furlough tax rebate 
 (GBP000)                   527.6   871.4 
 

* Before exceptional items

Mainly as a result of the lockdown, there have been substantial further 'knock-on' effects on the sales and profits of our third-party suppliers and contractors, ranging from large international brewers to architects, builders and small suppliers, such as window cleaners. Their losses are difficult to quantify, but we estimate that the total cost to the UK economy - to Wetherspoon (decline in profits equals GBP165.6m), the government (decline in tax generated equals GBP327.7m) and third parties - of closing Wetherspoon's pubs for approximately three months in the financial year was probably over GBP500m.

The academic, medical and political worlds have been split regarding the efficacy of lockdowns and the extent to which they confer health benefits which might justify these costs. SAGE members and the government appear broadly to believe that lockdowns improve health outcomes, whereas Professors Gupta and Heneghan of Oxford University, Professor Woolhouse of Edinburgh University, Nobel Prize winner Professor Levitt of Stanford University and many others broadly take the opposite view.

In general, Wetherspoon supports the Swedish view of Professor Johan Giesecke, Anders Tegnell and others, which emphasises social distancing, hand-washing and trusting the people, rather than coercive measures such as lockdowns, curfews and fines, favoured by the UK government and its advisers. It seems to us that the Swedish approach is working relatively well, with fewer fatalities per million people than the UK, Spain and Italy, for example, as well as materially less economic damage.

Examples of important contributions to the debate also include those of writer Mathew Parris, who has argued that the view against lockdown is 'mainstream' and is under-represented in some sections of the media, and former Supreme Court judge Jonathan Sumption QC, who has argued that the use of emergency powers has infringed basic democratic rights and led to poor administrative standards.

Covid-19- the risks associated with pubs

There have been approximately 46 million customer visits to Wetherspoon's UK pubs since 4 July. There have been no instances reported to Wetherspoon through the NHS test and trace system, or from local health officials, of a transfer of the virus from staff to customers or vice versa - or among customers.

There has been one case in which enquiries by Wetherspoon auditors and local authority health officials concluded that insufficient social distancing in staff areas, not accessible to customers, probably resulted in four staff members testing positive. Following this incident, further training and information were provided to all Wetherspoon staff.

Many people presume that pubs are likely to be centres of virus transmission - it's 'commonsensical', as one government minister recently said. However counterintuitive though it may be, that does not appear to be the case. As Professor Johan Giesecke said in April (see Sky News interview, appendix 1): "If you don't get too close to other people, they won't infect you." The pub industry generally has worked very hard to maintain social distancing and Covid-safe environments, with considerable success.

As Councillor Ian Ward, leader of Birmingham City Council, has said:

"The data we have shows that the infection rate has risen, mainly due to social interactions, particularly private household gatherings. In shops and hospitality venues, there are strict measures in place to ensure they are Covid safe, whereas it is much easier to inadvertently pass on the virus in someone's house, where people are more relaxed and less vigilant."

Following a significant increase in testing in the UK, 429 (1%) Wetherspoon employees have tested positive for the virus since 4 July - from a total of 43,000 employees. In the UK as a whole, there have been 603,716 (0.9%) positive tests (as at Sunday 11 October, www.worldometers.info). Comparative information is not widely available, but Amazon, for example, recently reported 20,000 positive tests among its 1.37 million US employees (1.5%). If pubs were, indeed, 'centres of transmission', it might be expected that infection rates would be higher among employees than those of either the general population or companies like Amazon.

Internal enquiries indicate that most Wetherspoon employees who tested positive have had mild symptoms or been asymptomatic.

Certainty is impossible, yet it appears that most positive tests resulted from contacts outside of work. 670 pubs (77%) have had zero positive tests among staff; 116 pubs (13%) have had one positive test; 85 pubs (10%) have had two or more positive tests.

Financial Outcome

Total sales in the financial year were GBP1,262.0m, a decrease of 30.6%. Like-for-like sales decreased by 29.5%, having increased by 5.9% in the first half. Bar sales decreased by 29.3%, food sales by 30.1%, slot/fruit machine sales by 20.9% and hotel room sales by 38.7%.

Pre-IFRS 16 operating profit, before exceptional items decreased by 94.6% to GBP7.2m (2019: GBP131.9m). The operating margin, before exceptional items was 0.6% (2019: 7.3%).

Pre-IFRS 16 profit before tax and exceptional items decreased by 133.3% to -GBP34.1m (2019: GBP102.5m), including property losses of GBP0.6m (2019: GBP5.6m). Earnings per share, including shares held in trust by the employee share scheme, before exceptional items, were -27.6p (2019: 75.5p).

Net interest was covered 0.3 times by operating profit before interest, tax and exceptional items (2019: 3.9 times).

Total capital investment was GBP171.6m in the period (2019: GBP167.6m), almost all of which occurred, or was contracted, before lockdown. GBP41.0m was invested in new pubs and pub extensions (2019: GBP35.2m), GBP32.1m in existing pubs and IT (2019: GBP55.2m) and GBP98.5m in freehold reversions, where Wetherspoon was already a tenant (2019: GBP77.2m).

Exceptional items totalled GBP60.7m (2019: GBP7.0m). There was a GBP3.5m loss on disposal, an impairment charge of GBP44.0m, expenditure in relation to Covid-19 of GBP29.1m and a credit of GBP15.9m in respect of a long-standing claim with HMRC for VAT on fruit/slot machines.

The total cash effect of exceptional items was a net cash outflow of GBP10.6m. There was an outflow related to Covid-19 expenditure of GBP23.2m, while beer and food stock losses, as a result of lockdown, were GBP5.9m. An inflow resulted from a successful HMRC fruit/slot machine VAT claim of GBP15.9m and pub disposal receipts of GBP2.6m. Since the current pub disposal programme started in 2015, it has produced a net inflow of GBP23m from the disposal of 109 pubs.

Free cash flow, after capital payments of GBP44.3m for existing pubs (2019: GBP54.3m), GBP11.1m for share purchases for employees (2019: GBP16.0m) and payments of tax and interest, decreased by GBP155.9m to -GBP58.9m (2019: GBP97.0m). Free cash flow per share was -54.2p (2019: 92.0p).

IFRS 16

On 29 July 2019, the company adopted the IFRS 16 leases standard. For the year ending 26 July 2020, as a result of the new standard, EBITDA has increased by GBP58.5m and operating profit by GBP9.8m. Finance costs increased by GBP21.5m. There will be no impact on cash flows, except in relation to tax payments. As a result of this new accounting standard, gross assets as at 26 July 2020 are GBP521.1m higher than last year and net assets are GBP8.0m lower.

Management actions

The company implemented an extensive set of measures to safeguard the business when the government closed pubs in March. These measures included the cancellation of the dividend, the raising of equity, a reduction in capital expenditure and the introduction of the government furlough scheme for employees.

Following a downturn of trade in the pub and restaurant industry, the company took the difficult decision to reduce the number of employees at its head office by 108. It has also started a consultation process to reduce staff numbers at airport pubs, where sales are generally much lower and where a high percentage is closed.

Dividends and return of capital

No interim dividend was paid in March 2020. The board is not proposing a final dividend payment for the year.

During the year, 419,741 shares (0.40% of the share capital) were purchased by the company for cancellation, at a cost of GBP6.5m, an average cost per share of 1,523p.

Financing

As at 26 July 2020, the company's total net debt, excluding derivatives, was GBP817.0m (2019: GBP737.0m), an increase of GBP80.0m.

Year-end net-debt-to-EBITDA ratio was 9.48 times (2019: 3.36 times) - EBITDA was GBP133m lower and net-debt increased by GBP80m in 2020. The company has a waiver agreement in place, against the financial covenant tests, which extends to October 2021.

As at 26 July 2020, the company had GBP194.0m (2019: GBP158.0m) of cash or cash equivalents. There has been an increase in total facilities to GBP993.0m (2019: GBP895.0m), following the addition of a US private placement in August 2019.

In August 2020, the company raised an additional GBP48.3m under the coronavirus large business interruption loan scheme (CLBILS).

In order to try to avoid increased costs, the company has fixed its LIBOR interest rates in respect of GBP770m until March 2029. The weighted average cost of the swaps is 2.42% for this financial year (excluded the banks' margin); this will reduce to 1.61% at the end of July 2021.

The company has fully drawn down its revolving credit facility. As previously stated, it is the company's intention that the maximum net-debt-to-EBITDA ratio should be around 3.5 times, other than in the short term. The ratio has risen mainly as a result of the temporary closure of pubs. The company intends to reduce the level in a timely manner, as and when more normal trading conditions resume. The company has previously stated that debt levels of between 0 and 2 times EBITDA are a sensible long-term benchmark, although higher levels may be justified at times of very low interest rates.

The company conducted a non-pre-emptive placing of 15% of the company's issued ordinary share capital to raise GBP141m, with a good level of support from institutional investors; directors and members of the senior management team participated, alongside the equity placing, to raise a further GBP0.3m. The net proceeds were used to strengthen the company's balance sheet, working capital and liquidity position.

Taxation

The current tax credit (ie the cash which the company will receive from HMRC) for the period is GBP2.6m (2019: GBP22.5m charge). The rate of corporation tax recovered on current year losses is 4.5%. The 'accounting' tax credit, which appears in the income statement, is GBP6.2m (2019: GBP22.8m).

The company is awaiting an HMRC refund of excise duty totalling GBP524k, in relation to goods sent to the Republic of Ireland, when pubs first opened in the country. The company has been charged excise duty on the same goods twice, as they were purchased in the UK, and excise duty was paid in full, then Irish excise duty was also paid in full, when the goods were sent to Ireland. To ensure that taxpayers aren't subject to 'double taxation', there are provisions in place to allow the UK duty to be reclaimed from HMRC ('duty drawback'). However, owing to alleged procedural omissions, the company has been unable to reclaim this duty, even though it is transparently clear that the duty has been paid.

VAT equality

As we have previously stated, the government would generate more revenue and jobs if it were to create tax equality among supermarkets, pubs and restaurants. Supermarkets pay virtually no VAT in respect of food sales, whereas pubs pay 20%. This has enabled supermarkets to subsidise the price of alcoholic drinks, widening the price gap, to the detriment of pubs and restaurants.

Pubs also pay around 20 pence a pint in business rates, whereas supermarkets pay only about 2 pence, creating further inequality.

Pubs have lost 50% of their beer sales to supermarkets in the last 35 or so years.

It makes no sense for supermarkets to be treated more leniently than pubs, since pubs generate far more jobs per pint or meal than do supermarkets, as well as far higher levels of tax. Pubs also make an important contribution to the social life of many communities and have better visibility and control of those who consume alcoholic drinks.

Tax equality is particularly important for residents of less affluent areas, since the tax differential is more important there - people can less afford to pay the difference in prices between the on and off trade.

As a result, in these less affluent areas, there are often fewer pubs, coffee shops and restaurants, with less employment and increased high-street dereliction.

Tax equality would also be in line with the principle of fairness in applying taxes to different businesses.

On 8 July 2020, the chancellor, Rishi Sunak, announced a temporary reduction in VAT to 5% in respect of food and non-alcoholic drinks sales. As a result, the company lowered its pricing on a wide range of products, including food, soft drinks and real ale. If the chancellor decides to make these VAT reductions permanent, the company intends to retain these lower prices indefinitely.

Corporate governance

The comments made in last year's annual report are just as relevant today and are repeated here:

The underlying ethos of corporate governance is to comply with the guidelines or to explain why you do not.

The original creators of the rules must have realised that business success takes many forms, so a rigid structure, applicable to all companies, cannot be devised - hence the requirement to explain non-compliance.

Wetherspoon has always explained its approach. For example, in 2016, our approach to corporate governance was summed up in the annual report as follows:

"I have said that many aspects of current corporate governance advice, as laid out in the Combined Code, are deeply flawed..."

I then went on to say:

"I believe that the following propositions represent the views of sensible shareholders:

"The Code itself is faulty, since it places excessive emphasis on meetings between directors and shareholders and places almost no emphasis on directors taking account of the views of customers and employees which are far more important, in practice, to the future well-being of any company.

"For example, in the UK Corporate Governance Code (September 2014), there are 64 references to shareholders, but only three to employees and none to customers - this emphasis is clearly mistaken.

-- "The average institutional shareholder turns over his portfolio twice annually, so it is advisable for directors to be wary of the often perverse views of 'Mr Market' (in the words of Benjamin Graham), certainly in respect of very short-term shareholders.

-- "A major indictment of the governance industry is that modern annual reports are far too long and often unreadable. They are full of semiliterate business jargon, including accounting jargon, and are cluttered with badly written and incomprehensible governance reports.

-- "It would be very helpful for companies, shareholders and the public, if the limitations of corporate governance systems were explicitly recognised. Common sense, management skills and business savvy are more important to commercial success than board structures. All of the major banks and many supermarket and pub companies have suffered colossal business and financial problems, in spite of, or perhaps because of, their adherence to inadvisable governance guidelines.

-- "There should be an approximately equal balance between executives and non-executives. A majority of executives is not necessarily harmful, provided that non-executives are able to make their voices heard.

-- "It is often better if a chairman has previously been the chief executive of the company. This encourages chief executives, who may wish to become a chairman in future, to take a long-term view, avoiding problems of profit-maximisation policies in the years running up to the departure of a chief executive.

-- "A maximum tenure of nine years for non-executive directors is not advisable, since inexperienced boards, unfamiliar with the effects of the 'last recession' on their companies, are likely to reduce financial stability.

-- "An excessive focus on achieving financial or other targets for executives can be counter-productive. There's no evidence that the type of targets preferred by corporate governance guidelines actually works and there is considerable evidence that attempting to reach ambitious financial targets is harmful.

-- "As indicated above, it is far more important for directors to take account of the views of employees and customers than of the views of institutional shareholders. Shareholders should be listened to with respect, but caution should be exercised in implementing the views of short-term shareholders. It should also be understood that modern institutional shareholders may have a serious conflict of interest, as they are often concerned with their own quarterly portfolio performance, whereas corporate health often requires objectives which lie five, 10 or 20 years in the future."

I also quoted Sam Walton of Walmart in the 2014 annual report. He said:

"What's really worried me over the years is not our stock price, but that we might someday fail to take care of our customers or that our managers might fail to motivate and take care of our (employees)... Those challenges are more real than somebody's theory that we're heading down the wrong path... As business leaders, we absolutely cannot afford to get all caught up in trying to meet the goals that some ... institution ... sets for us. If we do that, we take our eye off the ball.... If we fail to live up to somebody's hypothetical projection for what we should be doing, I don't care. We couldn't care less about what is forecast or what the market says we ought to do."

It is, therefore, very disappointing that one large institutional shareholder does not appear, by its actions, to support the central tenet of our stance on the issue of governance, which is that experience is extremely important and that the so-called 'nine-year rule' is perverse and counterproductive.

This shareholder failed to support the re-election of two of our non-executive directors at last year's AGM. I arranged a meeting, in April 2019, for all of our main institutional shareholders, to further explain our position, which the shareholder in question failed to attend. I then arranged a further meeting, in May 2019, with the shareholder at that shareholder's office.

Following the meeting, there was no confirmation that the shareholder would support the re-election of our long-serving non-executive directors. As a result, three of our four non-executives, in the best interests of the company, offered to leave, on a rotational basis.

The company contacted all of its main shareholders to inform them of this proposal. The shareholder in question agreed. However, several other shareholders expressed their discontent with the proposed resignations.

The executive board and I feel strongly that these sorts of board change disrupt and weaken the company. I wrote to the shareholder on 9 September 2019 to ask them to reconsider their position, but have not received a reply.

Wetherspoon has had harmonious relationships with almost all of its shareholders over many years and has complied with the corporate governance requirement for explanation. Judging from the absence of any adverse comment, our approach has generally been accepted by investors.

This year's annual general meeting will take place on 17 December 2020.

Further progress

As always, the company has tried to improve as many areas of the business as possible, on a week-to-week basis, rather than aiming for 'big ideas' or grand strategies. Frequent calls on pubs by senior executives, the encouragement of criticism from pub staff and customers and the involvement of pub and area managers, among others, in weekly decisions, are the keys to success.

We now have 781 pubs rated on the Food Standards Agency's website - the average score is 4.96, with 96.9% of the pubs achieving a top rating of five stars and 2.3% receiving four stars. We believe this to be the highest average rating for any substantial pub company.

In the separate Scottish scheme, which records either a 'pass' or a 'fail', all of our 62 pubs have passed.

We paid GBP33m in respect of bonuses and free shares to employees in the year, of which 98% was paid to staff below board level and 87% was paid to staff working in our pubs.

The company has been recognised as a Top Employer UK (2020) by The Top Employers Institute for the 17th consecutive year.

Thanks to fantastic efforts by our employees and customers, in association with the charity CLIC Sargent, approximately GBP1.1m was raised, bringing the total (since August 2002) to over GBP18.7m.

Property

The company opened two pubs during the year and sold or closed nine, resulting in a trading estate of 872 pubs at the financial year end.

The average development cost for a new pub (excluding the cost of freeholds) was GBP2.3m, compared with GBP2.6m a year ago. The full-year depreciation charge, excluding right-of-use assets, was GBP79.3m (2019: GBP81.8m).

Ten years ago, the company's freehold/leasehold split was 41.3%/58.7%. As at 26 July 2020, as a result of investment in freehold reversions (relating to pubs where the company was previously a tenant) and freehold pub openings, the split was 64.3%/35.7%. As at 26 July 2020, the net book value of the property, plant and equipment of the company was GBP1.4 billion, including GBP1.1 billion of freehold and long-leasehold property. The properties have not been revalued since 1999.

Property litigation

As previously reported, Wetherspoon agreed on an out-of-court settlement with developer Anthony Lyons, formerly of property leisure agent Davis Coffer Lyons, in 2013 and received approximately GBP1.25m from Mr Lyons.

The payment relates to litigation in which Wetherspoon claimed that Mr Lyons had been an accessory to frauds committed by Wetherspoon's former retained agent Van de Berg and its directors Christian Braun, George Aldridge and Richard Harvey. Mr Lyons denied the claim - and the litigation was contested.

The claim related to properties in Portsmouth, Leytonstone and Newbury. The Portsmouth property was involved in the 2008/9 Van de Berg case itself.

In that case, Mr Justice Peter Smith found that Van de Berg, but not Mr Lyons (who was not a party to the case), fraudulently diverted the freehold from Wetherspoon to Moorstown Properties Limited, a company owned by Simon Conway. Moorstown leased the premises to Wetherspoon. Wetherspoon is still a leaseholder of this property - a pub called The Isambard Kingdom Brunel.

The properties in Leytonstone and Newbury (the other properties in the case against Mr Lyons) were not pleaded in the 2008/9 Van de Berg case. Leytonstone was leased to Wetherspoon and trades today as The Walnut Tree public house. Newbury was leased to Pelican plc and became Café Rouge.

As we have also reported, the company agreed to settle its final claim in this series of cases and accepted GBP400,000 from property investor Jason Harris, formerly of First London and now of First Urban Group. Wetherspoon alleged that Harris was an accessory to frauds committed by Van de Berg. Harris contested the claim and has not admitted liability.

Before the conclusion of the above cases, Wetherspoon also agreed on a settlement with Paul Ferrari of London estate agent Ferrari Dewe & Co, in respect of properties referred to as the 'Ferrari Five' by Mr Justice Peter Smith.

Press corrections

Following lockdown, a large number of press reports misrepresented Wetherspoon's position in several important areas. The company complained to the media organisations concerned and obtained apologies or corrections from the Times, the BBC, Sky News, the Mirror, the Sun, the Daily Mail, Forbes and several other publications. Please see the article I wrote on this subject in appendix 2.

Current trading and outlook

Warren Buffett, chairman of Berkshire Hathaway, commented in 1989 (below) on the dangers of what he calls the 'institutional imperative' and how it compels companies to stay on the same course, even if it's the wrong course - and how it compels companies to imitate competitors. The institutional imperative applies just as much to governments as it does to boards of directors. Professor Johan Giesecke, the Warren Buffett of epidemiology, is obviously perplexed in an April TV interview (appendix 1 below) as to how 100 countries all reacted, almost overnight, in the same way to the Covid-19 problem, based on the deeply flawed analysis of Imperial College.

As Warren Buffett explains:

"My most surprising discovery: the overwhelming importance in business of an unseen force that we might call "the institutional imperative." In business school, I was given no hint of the imperative's existence and I did not intuitively understand it when I entered the business world. I thought then that decent, intelligent, and experienced managers would automatically make rational business decisions. But I learned over time that isn't

so. Instead, rationality frequently wilts when the institutional imperative comes into play.

"For example: (1) As if governed by Newton's First Law of Motion, an institution will resist any change in its current direction; (2) Just as work expands to fill available time, corporate projects or acquisitions will materialize to soak up available funds; (3) Any business craving of the leader, however foolish, will be quickly supported by detailed rate-of-return and strategic studies prepared by his troops; and (4) The behavior of peer companies, whether they are expanding, acquiring, setting executive compensation or whatever, will be mindlessly imitated.

"Institutional dynamics, not venality or stupidity, set businesses on these courses, which are too often misguided. After making some expensive mistakes because I ignored the power of the imperative, I have tried to organize and manage Berkshire in ways that minimize its influence. Furthermore, Charlie and I have attempted to concentrate our investments in companies that appear alert to the problem."

Since 100 governments adopted a lockdown strategy, it was very difficult for any government to adopt a different course. However, pubs eventually reopened in England on 4 July and in the rest of the UK shortly thereafter.

The lockdown was far longer than was necessary to achieve its stated objective of 'flattening the curve' so as to assist the health service. Before pubs reopened, a detailed and comprehensive operating plan for the hospitality industry was nevertheless agreed on among the government, parliamentary committees, UK Hospitality, civil servants and other interested parties.

The regulations and guidelines reflected in the plan drastically reduced pub capacity, but were carefully thought out and had the backing of the industry, legislators, licensing officials, local authorities and the public.

For the two months following reopening, it appeared that the hospitality industry, in difficult circumstances, was adapting to the new régime and was getting 'back on its feet', albeit in survival mode.

It appears that the government and its advisers were clearly uncomfortable as the country emerged from lockdown. They have introduced, without consultation, under emergency powers, an ever-changing raft of ill-thought-out regulations - these are extraordinarily difficult for the public and publicans to understand and to implement. None of the new regulations appears to have any obvious basis in science.

For example, a requirement for table service was introduced - which is expensive to implement and undermines the essential nature of pubs for many people - pubs have now become like restaurants. Customers can approach the till in a shop, but not in a pub - which is, in no sense, 'scientific'.

In addition, face-coverings, for which the health benefits are debatable, need not be worn while seated, yet must be worn to go to visit the bathroom - another capricious regulation.

The most damaging regulation relates to the 10pm curfew, which has few supporters outside of the narrow cloisters of Downing Street and SAGE meetings. This has meant that many thousands of hospitality industry employees, striving to maintain hygiene and social-distancing standards, go off duty at 10pm, leaving people to socialise in homes and at private events which are, in reality, impossible to regulate.

In marked contrast to the consistency of the comparatively successful Swedish approach, which emphasises social distancing, hygiene and trust in the people, the erratic UK government is jumping from pillar to post and is both tightening and tinkering with regulations, so we are now in quasi-lockdown which is producing visibly worse outcomes than those in Sweden, in respect of both health and the economy.

Risk cannot be eliminated completely in pubs, but sensible social-distancing and hygiene policies, combined with continued assistance and co-operation from the authorities, should minimise it.

Like-for-like sales in the first 11 weeks have been 15.0% below those of last year, with strong sales in the first few weeks, followed by a marked slowdown since the introduction of a curfew and other regulations, some of which are referred to above.

The recent curfew and introduction of table service only have been particularly damaging for trade, depressing sales for customers who find it too much 'faff', at the same time as substantially increasing costs.

As a result of recent changes in regulations, the outlook for pubs over the remainder of the current financial year is even more unpredictable than hitherto.

The company has successfully adapted its business, over the last 41 years, to cope with widely different political and economic circumstances. We now employ over 40,000 people, 10,000 of whom are shareholders in the company, and are a major contributor to national income, paying approximately one pound in every thousand of treasury receipts in 2019 and in preceding years.

However, the company and the entire hospitality industry need a more sensible and consistent regulatory framework in which to operate - the current environment of lockdowns, curfews and constantly changing regulations and announcements threatens not only pub companies, but the entire economy. The most important lesson, as Professor Mark Woolhouse of Edinburgh University has said, is that "lockdown just defers the problem; it doesn't solve it".

Appendix 1 - Transcript of interview, former Swedish chief epidemiologist Johan Giesecke, SKY NEWS AUSTRALIA - 29th April 2020

Question: You've been a strong critic of the idea of lockdowns, Sweden has avoided these sort of lockdowns that we're seeing here in Australia. Tell us your thoughts - are lockdowns the correct way to go?

Johan: You introduced me by saying that I would say that you got it all wrong. I don't think you go it all wrong but you painted yourself into a corner and I'm watching with interest how you and 100 other countries will climb out of the lockdown, because I don't think any government that I know gave a minute's thought about how they would get out of the different lockdowns that are installed. Take the school closure for example, if you close the schools, when are you going to open them, what's the criteria? I don't think anyone thought about that when the closure was decided on. Anyway, so Sweden doesn't have such a strict lockdown, there are a few things that are forbidden - the crowd can't be more than 50 people, at restaurants that are mostly open, there should be 5ft or 1.5 meters between the tables, you have to sit down to eat, there are a few things like that but rather mild things... there are very few laws and ordinances passed, you can go out without being stopped by the police and fined or threatened with prison and mostly we talk about trust... we trust the people - people are not stupid. That's... the basic line [in Sweden]. If you tell people what's good for them and what's good for their neighbours and other people, they do that. You take a restriction that's sensible and understandable, people will follow it.

Question: You said that you think the results are going to be similar across most countries regardless of the approach they've taken, can you take us through that?

Johan: There is a tsunami of a rather mild infection spreading around the globe and I think that's there's very little chance to stop it by any measure we take. Most people will become infected by this and most people won't even notice. We have data now from Sweden that shows between 98 and 99 percent of the cases have had a very mild infection or didn't even realise they were infected. So we have this spread of this mild disease around the globe and most of it is happening where we don't see it. It's among people that don't get very sick, spread it to someone else that doesn't get very sick and what we're looking at is a thin layer at the top of people who do develop the disease and even thinner layer of people that go into intensive care and then even thinner layer of people who die. But the real outbreak is happening where we don't see it.

Question: So.....you're saying that at some point pretty much everybody is going to get this disease to some degree or another. Here in Australia we've done an incredibly good job suppressing it. I'm wondering do you think we've done too good a job, is it possible to do too good a job suppressing it in the early stages such that you won't ever be able to take the foot off the break on your restrictions to get the disease just to a manageable flow of cases that the health system, which we were told this was all about preparing for that, be allowed to handle the cases as they come through.

Johan: Yes... one point is to flatten the curve a bit so that the health care isn't overused. You may succeed, and New Zealand may also succeed, but I've been asking myself when New Zealand or Australia has stamped out every case in the country, what do you do for the next 30 years. Will you close your borders completely? Quarantine everyone who is going to Australia or New Zealand? Because the disease will be out there. I don't know how you are going to handle that. That's your problem.

Question: You've said you think in most countries regardless of the measures we take, eg. Taiwan has been very successful and other countries like Italy have been disaster cases, but you think at the end of the day they're all pretty much going to end up with the same fatalities, the same results, the same deaths regardless of what measures they took. Explain that.

Johan: Yes. Basically I think it will be the same because, like I said, the real epidemic is invisible and it's going on all the time around us. The other thing with a lockdown is when you open it, you will have more cases, so the countries who pride themselves in having a few deaths now, will get these deaths when they start lifting the lockdown.

Question: Tell us briefly about the Imperial College results that sparked this worldwide panic. You believe they were flawed, these were the initial results that were coming out and the modelling that was saying millions are gonna die. You thought that was flawed, tell us why.

Johan: Yes, there are a few procedural things... One is that the paper was never published which is normal scientific behaviour. The second thing it wasn't peer-reviewed, which means it wasn't looked upon by other people, which is also normal scientific procedure. So it was more like an internal departmental communication, a memo. And then the big mistake of the Imperial group was under-estimating the proportion of the very mild cases that would never be detected, that's the main thing with that prediction. And it's fascinating how it changed the policy of the world. The UK made a u-turn overnight [upon] the publication of the paper which is fascinating. So, yes, there were several other mistakes with the paper but it gets very technical to get into that.

Question: You mention that the overwhelming majority of people that get this disease have no symptoms or very minimal symptoms. Do we even know the real fatality rate of the coronavirus?

   Johan:   No.  Well it's around 0.1%. 

Question: We were told it was 3% initially, initially 2%, are you saying now that it's 0.1%., that's pretty much the same fatality rate as the regular flu isn't it?

Johan: I think it's a bit higher actually. I said before in Sweden that this is like a severe influenza. I don't think that's completely true - it will be a bit more severe than the influenza, maybe double but not tenfold.

Question: With all of the health care systems focusing on flattening the curve and being prepared for these waves of infection, which aren't necessarily coming because of the very restrictive measures, overall are we gonna see more people dying, we talked a little bit about this before on the show, of cancers, heart attacks, things like that, simply because they're too scared to go to the hospital because they think they won't get treated. Is there going to be other deaths that are going to be caused by our overweighting focus just on this one particular disease?

Johan: Could well be. The emergency rooms here in Stockholm have about 50% of the usual number of patients coming in, and one reason is probably that people are scared of contracting the disease when they go into hospitals, and another is that, I think, they say they can wait a bit until the thing is over.

Question: You've said the best policy, the correct policy, would be to simply protect the old and the frail. Is that correct?

Johan: Yes, and that's the Swedish model. It has... two pillars. One is only use measures that are evidence-based. And there are two that are evidence-based... one is washing hands... we've known that for 150 years since Semmelweis in Austria a long time ago. The other is social distancing. If you don't get too close to other people, they won't infect you. And the third may be trust people. People are not stupid, if you tell them what's good for them they will do what you say. You don't need soldiers on the street - and police. It's unnecessary.

.

Appendix 2 - Tim's Viewpoint, Wetherspoon News, Summer 2020

The press plays a vital role - but don't believe everything you read

Some journalists apply more spin than a Shane Warne googly and more venom than a Waqar Younis Yorker

The press plays a vital role in a free society by shining a light on privilege and power, including on those who run businesses - and by informing and entertaining.

We blame the press for many sins, but there's some truth in the defence that it's often just saying what we like to read.

To understand what makes a press 'story', it's useful to hark back to 2003, when a customer wrote to Wetherspoon News complaining about swearing in one of our pubs.

I replied in this magazine that I would ask customers to 'mind their language'.

Believe it or not, that workaday response to a customer in our humble publication became one of the biggest news stories in the world, for a few days.

It was a leading news headline on BBC and ITV and featured in most local papers - as well as in numerous publications in faraway India, Canada, the US, Australia and elsewhere.

I was even phoned by a relative living in the Swedish 'outback', saying that the story was on the front page of the village paper... but why did it go viral?

In truth, the story was given a 'twist' by a journalist from a pub industry newspaper who said that Wetherspoon might 'punish' customers for swearing.

This transformed the story from 'true, but boring' into 'not quite true, but very interesting'.

Some people think that newspapers should always stick to the truth, but, to be fair, the 'Wetherspoon bans swearing' story was probably innocent fun - no harm done

- and the public knew instinctively that it wasn't LITERALLY true.

Part (but only part) of the reason for buying a newspaper is to be entertained - no one attending a Billy Connolly or Kevin Bridges show expects them, for example, to stick to the literal truth.

Artistic licence is permitted to embellish a comedian's monologue, and the same can be true of journalists - with the proviso that, in the process, innocent parties should not be unfairly damaged or duped.

Hence, we have libel laws and controls over press accuracy, including a 'right of reply' - to protect what Shakespeare called the 'bubble reputation'.

However, a vicious side of the press was revealed after 20 March, when pubs and restaurants were closed, without notice, by the government, throwing Wetherspoon and almost the entire pub and restaurant industry into default on bank loans - with hundreds of thousands out of work.

I recorded an internal company video, less than 48 hours after pubs were closed, hoping to reassure employees that they would be 'furloughed' and would not lose their jobs - which was happening, on a large scale, elsewhere in the economy.

The video said: "All our endeavours are going to be on trying to make sure that you get your money."

And an e-mail, which went out with the video, said that "employees will be paid as normal on Friday 27 March".

In fact, staff were paid on that Friday and have been paid on every Friday since - thanks, above all, to the lightning-quick creation of a furlough scheme and, in our case at least, great flexibility from banks.

However, the press was looking for a 'story' with a villain, and the truth was subject to malicious distortion.

Times journalist Caitlin Moran, for example, with more spin than a Shane Warne googly, said that Wetherspoon employees "wouldn't get paid until the end of April for work they had done" which The Times has now retracted through gritted teeth.

Fellow Times columnist Alistair Osborne referred to me as a rat, while Caitlin Moran herself, with more venom than a Waqar Younis yorker, called me the worst word in the language, albeit with hyphens replacing some letters - as did the Daily Mail.

Ben Marlow of The Daily Telegraph said that I was "Britain's worst ever boss" - and scores of press stories made similar accusations.

Maybe the press can justify this hyperbole - it has newspapers to sell in an Internet-ravaged industry.

However, the wackiest behaviour, during these mad March days, was from two MPs, Rachel Reeves and Jo Stevens, who, with Wetherspoon and the hospitality industry at their most vulnerable, tried to turn the story to personal political advantage.

Jo Stevens, MP for Cardiff Central, invented a story on Twitter that I had appeared in front of a parliamentary committee (the BEIS) then chaired by Rachel Reeves, MP for Leeds West, and, as a result of that appearance, had "u-turned on decision not to pay 43,000 staff while pubs are shut".

This was complete cobblers.

I never appeared in front of the BEIS Committee, as both Stevens and Reeves know, and Wetherspoon had already undertaken to pay staff on 27 March.

They must have been bonkers to have made up a fictitious appearance in front of a parliamentary committee - since that could so easily be disproved.

Rachel Reeves added to Twitter 'disinformation' and confusion (7, opposite) by saying that Wetherspoon was at "first refusing to lock down altogether".

That's a complete lie.

All Wetherspoon pubs shut, when requested, on Friday 20 March - ask any of our staff or customers.

I wrote to Reeves on 2 April to complain, yet received no reply.

Wetherspoon's response to the torrent of 'disinformation' has been to wade through the press articles, one by one, and to write to the various publications to ask them to print a correction.

Bravo and thanks to publications like the Daily Mirror, Sky News and local newspapers like the Herald Express and the Loughborough Echo which cared enough about the truth to publish a correction or a Wetherspoon article in response.

For democracy to work, the press itself, given its huge power, has to be subject to regulation and scrutiny.

If the press is the guardian of democracy, who guards the guardians, as Lord Leveson famously asked in his inquiry into the press, stemming from the phone-hacking scandal.

Politicians themselves, over the years, have championed the campaign to require the media to correct inaccurate statements.

As the public realises, the press often, but not always, bends the truth out of any recognisable shape, in pursuit of a story.

It is disturbing, therefore, that MPs Jo Stevens and Rachel Reeves have, themselves, resorted to blatant fabrication - which, itself, was the source of much media inaccuracy.

Perhaps John Webster, Shakespeare's contemporary, was right when he said:

"A politician is the devil's quilted anvil; he fashions all sins on him, and the blows are never heard."

But just as a free society needs the press, it also needs honest politicians.

Even in our murky and compromised world, the truth will out - that's why democracy works so well, despite its trials and tribulations.

Tim Martin

Chairman

PRE-IFRS 16 INCOME STATEMENT for the 52 weeks ended 26 July 2020

J D Wetherspoon plc, company number: 1709784

 
                          Notes     52 weeks     52 weeks     52 weeks     52 weeks     52 weeks     52 weeks 
                                       ended        ended        ended        ended        ended        Ended 
                                     26 July      26 July      26 July      28 July      28 July      28 July 
                                        2020         2020         2020         2019         2019         2019 
                                      Before  Exceptional        After       Before  Exceptional        After 
                                 exceptional        items  exceptional  exceptional        items  exceptional 
                                       items        (note        items        items     (note 4)        items 
                                                       4) 
                                      GBP000       GBP000       GBP000       GBP000       GBP000       GBP000 
------------------------  -----  -----------  -----------  -----------  -----------  -----------  ----------- 
Revenue                     1      1,262,048            -    1,262,048    1,818,793            -    1,818,793 
Operating costs                  (1,254,896)     (13,201)  (1,268,097)  (1,686,876)            -  (1,686,876) 
------------------------  -----  -----------  -----------  -----------  -----------  -----------  ----------- 
Operating profit/(loss)     2          7,152     (13,201)      (6,049)      131,917            -      131,917 
Property (losses)/gains     3          (641)     (47,476)     (48,117)        5,599      (7,040)      (1,441) 
Finance income              6            161            -          161           41            -           41 
Finance costs               6       (40,767)            -     (40,767)     (35,098)            -     (35,098) 
------------------------  -----  -----------  -----------  -----------  -----------  -----------  ----------- 
(Loss)/profit 
 before tax                         (34,095)     (60,677)     (94,772)      102,459      (7,040)       95,419 
Income tax expense                     4,158        1,004        5,162     (22,830)          188     (22,642) 
------------------------  -----  -----------  -----------  -----------  -----------  -----------  ----------- 
(Loss)/profit for 
 the period                         (29,937)     (59,673)     (89,610)       79,629      (6,852)       72,777 
-------------------------------  -----------  -----------  -----------  -----------  -----------  ----------- 
 
Earnings per share 
 (p) 
- Basic[1]                  8         (27.6)       (55.0)       (82.6)         77.2        (6.6)         70.6 
- Diluted[2]                8         (27.6)       (55.0)       (82.6)         75.5        (6.5)         69.0 
------------------------  -----  -----------  -----------  -----------  -----------  -----------  ----------- 
 

RECONCILIATION TO STATUTORY PROFIT for the 52 weeks ended 26 July 2020

 
                     Notes     52 weeks     52 weeks     52 weeks     52 weeks     52 weeks     52 weeks 
                                  ended        ended        ended        ended        ended        ended 
                                26 July      26 July      26 July      28 July      28 July      28 July 
                                   2020         2020         2020         2019         2019         2019 
                                 Before  Exceptional        After       Before  Exceptional        After 
                            exceptional        items  exceptional  exceptional        items  exceptional 
                                  items        (note        items        items     (note 4)        items 
                                                  4) 
                                 GBP000       GBP000       GBP000       GBP000       GBP000       GBP000 
-------------------  -----  -----------  -----------  -----------  -----------  -----------  ----------- 
Profit before IFRS 
 16                            (29,937)     (59,673)     (89,610)       79,629      (6,852)       72,777 
Operating costs                  58,503            -       58,503            -            -            - 
Amortisation and 
 depreciation 
 Right-of-use 
  assets                       (49,059)            -     (49,059)            -            -            - 
 Lease premium                      368            -          368            -            -            - 
Disposal of leases     3          1,125            -        1,125            -            -            - 
Impairment 
 Right-of-use 
  assets               3              -      (4,722)      (4,722)            -            -            - 
 Property, plant 
  and equipment                       -        3,311        3,311            -            -            - 
Onerous leases 
 provision                            -        1,411        1,411            -            -            - 
Finance income         6            451            -          451            -            -            - 
Finance costs          6       (21,980)            -     (21,980)            -            -            - 
Income tax expense                2,012          629        2,641            -            -            - 
-------------------  -----  -----------  -----------  -----------  -----------  -----------  ----------- 
Profit for the 
 period                        (38,517)     (59,044)     (97,561)       79,629      (6,852)       72,777 
-------------------  -----  -----------  -----------  -----------  -----------  -----------  ----------- 
 

[1] Calculated excluding shares held in trust.

[2] Calculated using issued share capital which includes shares held in trust.

To provide meaningful comparatives the above statement has been presented under IAS 17 and does not form part of the audited financial statements

PRE-IFRS 16 CASH FLOW STATEMENT for the 52 weeks ended 26 July 2020

 
 J D Wetherspoon plc, company 
  number: 1709784 
                                     Notes             Free cash             Free cash 
                                                         Flow[1]               Flow[1] 
                                             52 weeks   52 weeks   52 weeks   52 weeks 
                                                ended      ended      ended      ended 
                                               26 Jul     26 Jul     28 Jul     28 Jul 
                                                 2020       2020       2019       2019 
                                               GBP000     GBP000     GBP000     GBP000 
-----------------------------------  -----  ---------  ---------  ---------  --------- 
Cash flows from operating 
 activities 
Cash generated from operations         9       38,718     38,718    227,176    227,176 
Interest received                                  59         59         33         33 
Interest paid                                (29,914)   (29,914)   (33,957)   (33,957) 
Corporation tax paid                         (10,971)   (10,971)   (19,661)   (19,661) 
-----------------------------------  -----  ---------  ---------  ---------  --------- 
Net cash flow from operating 
 activities                                   (2,108)    (2,108)    173,591    173,591 
-----------------------------------  -----  ---------  ---------  ---------  --------- 
 
Cash flows from investing 
 activities 
Reinvestment in pubs                         (43,370)   (43,370)   (47,398)   (47,398) 
Reinvestment in business 
 and IT projects                                (926)      (926)    (6,923)    (6,923) 
Investment in new pubs and 
 pub extensions                              (50,408)              (26,778) 
Freehold reversions and investment 
 properties                                  (98,467)              (77,207) 
Lease premiums paid                                 -                 (451) 
Proceeds of sale of property, 
 plant and equipment                            4,810                 9,319 
-----------------------------------  -----  ---------  ---------  ---------  --------- 
Net cash flow from investing 
 activities                                 (188,361)   (44,296)  (149,438)   (54,321) 
-----------------------------------  -----  ---------  ---------  ---------  --------- 
 
Cash flows from financing 
 activities 
Equity dividends paid                 11      (8,371)              (12,652) 
Purchase of own shares for 
 cancellation                                 (6,456)               (5,399) 
Purchase of own shares for 
 share-based payments                        (11,125)   (11,125)   (16,004)   (16,004) 
Loan issue cost                       10      (1,323)    (1,323)    (6,268)    (6,268) 
Advances under private placement      10       98,000                     - 
Advances under / (repayment 
 of) bank loans                       10      100,000              (13,865) 
Advances under asset-financing        10       16,152                12,000 
Issue of share capital                        137,995 
Asset-financing principal 
 payments                             10      (2,902)               (2,106) 
-----------------------------------  -----  ---------  ---------  ---------  --------- 
Net cash flow from financing 
 activities                                   321,970   (12,448)   (44,294)   (22,272) 
-----------------------------------  -----  ---------  ---------  ---------  --------- 
 
Net change in cash and cash 
 equivalents                          10      131,501              (20,141) 
-----------------------------------  -----  ---------  ---------  ---------  --------- 
Opening cash and cash equivalents              42,950                63,091 
Closing cash and cash equivalents             174,451                42,950 
-----------------------------------  -----  ---------  ---------  ---------  --------- 
Free cash flow                         8                (58,852)                96,998 
-----------------------------------  -----  ---------  ---------  ---------  --------- 
Free cash flow per ordinary 
 share (p)                             8                  (54.2)                  92.0 
 

[1]Free cash flow is a measure not required by accounting standards; a definition is provided in our accounting policies

To provide meaningful comparatives the above statement has been presented under IAS 17 and does not form part of the audited financial statements.

PRE-IFRS 16 BALANCE SHEET as at 26 July 2020

 
J D Wetherspoon plc, company number: 1709784 
                                               Notes  26 Jul 2020  28 Jul 2019 
                                                           GBP000       GBP000 
---------------------------------------------  -----  -----------  ----------- 
Non-current assets 
Property, plant and equipment                   13      1,439,467    1,384,971 
Intangible assets                               12          8,895       23,070 
Investment property                             14         11,527        5,531 
Other non-current assets                                    7,520        7,888 
Derivative financial instruments                                -          321 
Deferred tax assets                              7         15,617        8,342 
---------------------------------------------  -----  -----------  ----------- 
Total non-current assets                                1,483,026    1,430,123 
---------------------------------------------  -----  -----------  ----------- 
 
Current assets 
Assets held for sale                                            -        3,146 
Inventories                                                23,095       23,717 
Receivables                                                36,387       21,903 
Current income tax receivables                              7,672            - 
Cash and cash equivalents                                 174,451       42,950 
---------------------------------------------  -----  -----------  ----------- 
Total current assets                                      241,605       91,716 
---------------------------------------------  -----  -----------  ----------- 
Total assets                                            1,724,631    1,521,839 
---------------------------------------------  -----  -----------  ----------- 
 
Current liabilities 
Borrowings                                                (7,610)      (3,287) 
Trade and other payables                                (267,677)    (308,326) 
Current income tax liabilities                                  -     (10,986) 
Provisions                                                (4,759)      (4,072) 
---------------------------------------------  -----  -----------  ----------- 
Total current liabilities                               (280,046)    (326,671) 
---------------------------------------------  -----  -----------  ----------- 
 
Non-current liabilities 
Borrowings                                              (983,828)    (776,683) 
Derivative financial instruments                         (82,194)     (49,393) 
Deferred tax liabilities                         7       (42,138)     (39,416) 
Provisions                                                (1,488)      (1,934) 
Other liabilities                                         (9,738)     (10,930) 
---------------------------------------------  -----  -----------  ----------- 
Total non-current liabilities                         (1,119,386)    (878,356) 
---------------------------------------------  -----  -----------  ----------- 
Net assets                                                325,199      316,812 
---------------------------------------------  -----  -----------  ----------- 
 
Shareholders' equity 
Share capital                                               2,408        2,102 
Share premium account                                     280,975      143,294 
Capital redemption reserve                                  2,337        2,329 
Hedging reserve                                          (66,577)     (40,730) 
Currency translation reserve                                7,089        5,370 
Retained earnings                                          98,967      204,447 
---------------------------------------------  -----  -----------  ----------- 
Total shareholders' equity                                325,199      316,812 
---------------------------------------------  -----  -----------  ----------- 
 

To provide meaningful comparatives the above statement has been presented under IAS 17 and does not form part of the audited financial statements.

INCOME STATEMENT for the 52 weeks ended 26 July 2020

 
 
J D Wetherspoon plc, company 
 number: 1709784 
 
                          Notes     52 weeks     52 weeks     52 weeks     52 weeks     52 weeks     52 weeks 
                                       ended        ended        ended        ended        ended        ended 
                                     26 July      26 July      26 July      28 July      28 July      28 July 
                                        2020         2020         2020         2019         2019         2019 
                                      Before  Exceptional        After       Before  Exceptional        After 
                                 exceptional        items  exceptional  exceptional        items  exceptional 
                                       items        (note        items        items        (note        items 
                                                       4)                                     4) 
                                      GBP000       GBP000       GBP000       GBP000       GBP000       GBP000 
------------------------  -----  -----------  -----------  -----------  -----------  -----------  ----------- 
Revenue                     1      1,262,048            -    1,262,048    1,818,793            -    1,818,793 
Operating costs                  (1,245,084)     (13,201)  (1,258,285)  (1,686,876)            -  (1,686,876) 
------------------------  -----  -----------  -----------  -----------  -----------  -----------  ----------- 
Operating profit/(loss)     2         16,964     (13,201)        3,763      131,917            -      131,917 
Property (losses)/gains     3            484     (47,476)     (46,992)        5,599      (7,040)      (1,441) 
Finance income              6            612            -          612           41            -           41 
Finance costs               6       (62,747)            -     (62,747)     (35,098)            -     (35,098) 
------------------------  -----  -----------  -----------  -----------  -----------  -----------  ----------- 
(Loss)/profit before 
 tax                                (44,687)     (60,677)    (105,364)      102,459      (7,040)       95,419 
Income tax expense          7          6,170        1,633        7,803     (22,830)          188     (22,642) 
------------------------  -----  -----------  -----------  -----------  -----------  -----------  ----------- 
(Loss)/profit for 
 the period                         (38,517)     (59,044)     (97,561)       79,629      (6,852)       72,777 
------------------------  -----  -----------  -----------  -----------  -----------  -----------  ----------- 
 
Earnings per share 
 (p) 
- Basic[1]                  8         (35.5)       (54.4)       (89.9)         77.2        (6.6)         70.6 
- Diluted[2]                8         (35.5)       (54.4)       (89.9)         75.5        (6.5)         69.0 
 
Operating profit/(loss) 
 per share (p) 
- Diluted[2]                8           15.8       (12.3)          3.4        125.1            -        125.1 
------------------------  -----  -----------  -----------  -----------  -----------  -----------  ----------- 
 

STATEMENT OF COMPREHENSIVE INCOME for the 52 weeks ended 26 July 2020

 
                                                          Notes   52 weeks  52 weeks 
                                                                     ended     ended 
                                                                   26 July   28 July 
                                                                      2020      2019 
                                                                    GBP000    GBP000 
-------------------------------------------------------   -----  ---------  -------- 
Items which may be reclassified subsequently 
 to profit or loss: 
Interest-rate swaps: loss taken to other comprehensive 
 income                                                           (33,122)  (24,963) 
Tax on items taken directly to other comprehensive 
 income                                                     7        7,275     4,243 
Currency translation differences                                     1,293       181 
--------------------------------------------------------  -----  ---------  -------- 
Net loss recognised directly in other comprehensive 
 income                                                           (24,554)  (20,539) 
(Loss)/profit for the period                                      (97,561)    72,777 
--------------------------------------------------------  -----  ---------  -------- 
Total comprehensive income for the period                        (122,115)    52,238 
--------------------------------------------------------  -----  ---------  -------- 
 

[1] Calculated excluding shares held in trust.

[2] Calculated using issued share capital which includes shares held in trust.

CASH FLOW STATEMENT for the 52 weeks ended 26 July 2020

 
J D Wetherspoon plc, company 
 number: 1709784 
                                          Notes             Free cash             Free cash 
                                                              Flow[1]               Flow[1] 
                                                  52 weeks   52 weeks   52 weeks   52 weeks 
                                                     ended      ended      ended      ended 
                                                    26 Jul     26 Jul     28 Jul     28 Jul 
                                                      2020       2020       2019       2019 
                                                    GBP000     GBP000     GBP000     GBP000 
----------------------------------------  -----  ---------  ---------  ---------  --------- 
Cash flows from operating activities 
Cash generated from operations              9       75,665     75,665    227,176    227,176 
Interest received                                       59         59         33         33 
Interest paid                                     (29,914)   (29,914)   (33,957)   (33,957) 
Corporation tax paid                              (10,971)   (10,971)   (19,661)   (19,661) 
Lease interest                                    (18,080)   (18,080)          -          - 
----------------------------------------  -----  ---------  ---------  ---------  --------- 
Net cash flow from operating 
 activities                                         16,759     16,759    173,591    173,591 
----------------------------------------  -----  ---------  ---------  ---------  --------- 
 
Cash flows from investing activities 
Reinvestment in pubs                              (43,370)   (43,370)   (47,398)   (47,398) 
Reinvestment in business and 
 IT projects2                                        (926)      (926)    (6,923)    (6,923) 
Investment in new pubs and pub 
 extensions                                       (50,408)              (26,778) 
Freehold reversions and investment 
 properties                                       (98,467)              (77,207) 
Lease premiums paid                                      -                 (451) 
Proceeds of sale of property, 
 plant and equipment                                 4,810                 9,319 
----------------------------------------  -----  ---------  ---------  ---------  --------- 
Net cash flow from investing 
 activities                                      (188,361)   (44,296)  (149,438)   (54,321) 
----------------------------------------  -----  ---------  ---------  ---------  --------- 
 
Cash flows from financing activities 
Equity dividends paid                      11      (8,371)              (12,652) 
Purchase of own shares for cancellation            (6,456)               (5,399) 
Purchase of own shares for share-based 
 payments                                         (11,125)   (11,125)   (16,004)   (16,004) 
Loan issue cost                            10      (1,323)    (1,323)    (6,268)    (6,268) 
Advances under private placement           10       98,000                     - 
Advances under / (repayment 
 of) bank loans                            10      100,000              (13,865) 
Advances under asset-financing             10       16,152                12,000 
Lease principal payments                          (18,867)   (18,867)          - 
Issue of share capital                             137,995 
Asset-financing principal payments         10      (2,902)               (2,106) 
----------------------------------------  -----  ---------  ---------  ---------  --------- 
Net cash flow from financing 
 activities                                        303,103   (31,315)   (44,294)   (22,272) 
----------------------------------------  -----  ---------  ---------  ---------  --------- 
 
Net change in cash and cash 
 equivalents                               10      131,501              (20,141) 
----------------------------------------  -----  ---------  ---------  ---------  --------- 
Opening cash and cash equivalents                   42,950                63,091 
Closing cash and cash equivalents                  174,451                42,950 
----------------------------------------  -----  ---------  ---------  ---------  --------- 
Free cash flow                              8                (58,852)                96,998 
----------------------------------------  -----  ---------  ---------  ---------  --------- 
Free cash flow per ordinary 
 share                                      8                 (54.2)p                 92.0p 
 

[1] Free cash flow is a measure not required by accounting standards; a definition is provided in our accounting policies.

[2] Within reinvestment in business and IT projects, all amounts were intangible assets (2019: GBP5,859,000, with the remaining balance being related equipment).

BALANCE SHEET as at 26 July 2020

 
J D Wetherspoon plc, company number: 1709784 
                                          Notes  26 Jul 2020  28 Jul 2019 
                                                      GBP000       GBP000 
----------------------------------------  -----  -----------  ----------- 
Non-current assets 
Property, plant and equipment              13      1,442,778    1,384,971 
Intangible assets                          12          8,895       23,070 
Investment property                        14         11,527        5,531 
Other non-current assets                   15              -        7,888 
Right-of-use assets                                  514,169            - 
Derivative financial instruments                           -          321 
Deferred tax assets                         7         15,617        8,342 
Lease assets                                          11,115            - 
----------------------------------------  -----  -----------  ----------- 
Total non-current assets                           2,004,101    1,430,123 
----------------------------------------  -----  -----------  ----------- 
 
Current assets 
Lease assets                                           1,736            - 
Assets held for sale                                       -        3,146 
Inventories                                           23,095       23,717 
Receivables                                           32,176       21,903 
Current income tax receivables              7         10,313            - 
Cash and cash equivalents                            174,451       42,950 
----------------------------------------  -----  -----------  ----------- 
Total current assets                                 241,771       91,716 
----------------------------------------  -----  -----------  ----------- 
Total assets                                       2,245,872    1,521,839 
----------------------------------------  -----  -----------  ----------- 
 
Current liabilities 
Borrowings                                           (7,610)      (3,287) 
Trade and other payables                           (255,085)    (308,326) 
Current income tax liabilities              7              -     (10,986) 
Provisions                                           (3,038)      (4,072) 
Lease liabilities                                   (65,343)            - 
----------------------------------------  -----  -----------  ----------- 
Total current liabilities                          (331,076)    (326,671) 
----------------------------------------  -----  -----------  ----------- 
 
Non-current liabilities 
Borrowings                                         (983,828)    (776,683) 
Derivative financial instruments                    (82,194)     (49,393) 
Deferred tax liabilities                    7       (42,138)     (39,416) 
Provisions                                                 -      (1,934) 
Other liabilities                                          -     (10,930) 
Lease liabilities                                  (489,388)            - 
----------------------------------------  -----  -----------  ----------- 
Total non-current liabilities                    (1,597,548)    (878,356) 
----------------------------------------  -----  -----------  ----------- 
Net assets                                           317,248      316,812 
----------------------------------------  -----  -----------  ----------- 
 
Shareholders' equity 
Share capital                                          2,408        2,102 
Share premium account                                280,975      143,294 
Capital redemption reserve                             2,337        2,329 
Hedging reserve                                     (66,577)     (40,730) 
Currency translation reserve                           7,089        5,370 
Retained earnings                                     91,016      204,447 
----------------------------------------  -----  -----------  ----------- 
Total shareholders' equity                           317,248      316,812 
----------------------------------------  -----  -----------  ----------- 
 
 

STATEMENT OF CHANGES IN EQUITY

 
 J D Wetherspoon plc, company 
  number: 1709784 
                             Notes     Share    Share     Capital   Hedging     Currency  Retained      Total 
                                     capital  premium  redemption   reserve  translation  earnings 
                                              account     reserve                reserve 
                                      GBP000   GBP000      GBP000    GBP000       GBP000    GBP000     GBP000 
 --------------------------  ------  -------  -------  ----------  --------  -----------  --------  --------- 
 At 29 July 2018                       2,110  143,294       2,321  (20,010)        4,767   154,080    286,562 
 
 Total comprehensive 
  income                                                           (20,720)          603    72,355     52,238 
 --------------------------  ------  -------  -------  ----------  --------  -----------  --------  --------- 
 Profit for the period                                                                      72,777     72,777 
 Interest-rate swaps: 
  cash flow hedges                                                 (24,963)                          (24,963) 
 Tax on cash flow hedges       7                                      4,243                             4,243 
 Currency translation 
  differences                                                                        603     (422)        181 
 --------------------------  ------  -------  -------  ----------  --------  -----------  --------  --------- 
 Purchase of own shares 
  for cancellation                       (8)                    8                          (5,399)    (5,399) 
 Share-based payment 
  charges                                                                                   11,558     11,558 
 Tax on share-based 
  payments                     7                                                               509        509 
 Purchase of own shares for share-based 
  payments                                                                                (16,004)   (16,004) 
 Dividends                     11                                                         (12,652)   (12,652) 
 --------------------------  ------  -------  -------  ----------  --------  -----------  --------  --------- 
 At 28 July 2019                       2,102  143,294       2,329  (40,730)        5,370   204,447    316,812 
 
 Total comprehensive 
  income                                                           (25,847)        1,719  (97,987)  (122,115) 
 --------------------------  ------  -------  -------  ----------  --------  -----------  --------  --------- 
 Profit for the period                                                                    (97,561)   (97,561) 
 Interest-rate swaps: 
  cash flow hedges                                                 (33,122)                      -   (33,122) 
 Tax on cash flow hedges       7                                      7,275                      -      7,275 
 Currency translation 
  differences                                                                      1,719     (426)      1,293 
 --------------------------  ------  -------  -------  ----------  --------  -----------  --------  --------- 
 Issue of share capital                  314  137,681                                            -    137,995 
 Purchase of own shares 
  for cancellation                       (8)                    8                          (6,456)    (6,456) 
 Share-based payment 
  charges                                                                                   10,705     10,705 
 Tax on share-based 
  payments                     7                                                             (197)      (197) 
 Purchase of own shares for share-based 
  payments                                                                                (11,125)   (11,125) 
 Dividends                     11                                                          (8,371)    (8,371) 
 --------------------------  ------  -------  -------  ----------  --------  -----------  --------  --------- 
 At 26 July 2020                       2,408  280,975       2,337  (66,577)        7,089    91,016    317,248 
 --------------------------  ------  -------  -------  ----------  --------  -----------  --------  --------- 
 

The balance classified as share capital represents proceeds arising on issue of the company's equity share capital,

comprising 2p ordinary shares and the cancellation of shares repurchased by the company.

The capital redemption reserve increased owing to the repurchase of a number of shares in the year.

Shares acquired in relation to the employee Share Incentive Plan and the Deferred Bonus Scheme are held in trust,

until such time as the awards vest. At 26 July 2020, the number of shares held in trust was 1,996,358 (2019: 2,259,401),

with a nominal value of GBP35,447 (2019: GBP45,188) and a market value of GBP16,961,227 (2019: GBP34,794,775); these are

included in retained earnings.

During the year, 419,741 shares were repurchased by the company for cancellation, representing approximately 0.40% of the

issued share capital, at a cost of GBP6.5m, including stamp duty, representing an average cost per share of 1,523p.

The currency translation reserve contains the accumulated currency gains and losses on the long-term financing and balance sheet translation of the overseas branch. The currency translation difference reported in retained earnings is the restatement of the opening reserves in the overseas branch at the current year end currency exchange rate.

As at 26 July 2020, the company had distributable reserves of GBP31.5m.

NOTES TO THE FINANCIAL STATEMENTS

   1.      Revenue 
 
                       52 weeks   52 weeks 
                          ended      ended 
                        26 July    28 July 
                           2020       2019 
                         GBP000     GBP000 
--------------------  ---------  --------- 
Bar                     761,065  1,094,001 
Food                    452,150    656,955 
Slot/fruit machines      35,931     46,404 
Hotel                    11,780     19,699 
Other                     1,122      1,734 
--------------------  ---------  --------- 
                      1,262,048  1,818,793 
--------------------  ---------  --------- 
 
   2.      Operating profit/loss - analysis of costs by nature 
 
This is stated after charging/(crediting):                52 weeks  52 weeks 
                                                             ended     ended 
                                                           26 July   28 July 
                                                              2020      2019 
                                                            GBP000    GBP000 
--------------------------------------------------------  --------  -------- 
Concession rental payments                                       -    32,086 
Minimum operating lease payments                                 -    38,241 
Variable concession rental payments                          4,609         - 
Short leases                                                   204         - 
Repairs and maintenance                                     75,861    76,879 
Net rent receivable                                        (1,484)   (1,545) 
Share-based payments (note 5)                               10,705    11,558 
Depreciation of property, plant and equipment (note 13)     75,386    73,779 
Amortisation of intangible assets (note 12)                  3,806     7,634 
Depreciation of investment properties (note 14)                 79        55 
Amortisation of right-of-use assets                         49,059         - 
Amortisation of other non-current assets (note 15)               -       343 
--------------------------------------------------------  --------  -------- 
 
 
Auditor's remuneration                                    52 weeks  52 weeks 
                                                             ended     ended 
                                                           26 July   28 July 
                                                              2020      2019 
                                                            GBP000    GBP000 
-------------------------------------------------------   --------  -------- 
Fees payable for the audit of the financial statements 
- Standard audit fees                                          171       167 
- Additional audit work                                          -        23 
 
Fees payable for other services: 
- Audit related services                                        27        27 
--------------------------------------------------------  --------  -------- 
Total auditor's fees                                           198       217 
--------------------------------------------------------  --------  -------- 
 
 
Analysis of continuing operations             52 weeks     52 weeks 
                                                 ended        ended 
                                               26 July      28 July 
                                                  2020         2019 
                                                GBP000       GBP000 
-----------------------------------------  -----------  ----------- 
Revenue                                      1,262,048    1,818,793 
Cost of sales                              (1,217,521)  (1,639,378) 
-----------------------------------------  -----------  ----------- 
Gross profit                                    44,527      179,415 
Administration costs                          (40,764)     (47,498) 
-----------------------------------------  -----------  ----------- 
Operating profit after exceptional items         3,763      131,917 
-----------------------------------------  -----------  ----------- 
 

Included within cost of sales is GBP449.2m (2019: GBP640.5m) relating to cost of inventory recognised as expense.

   3.      Property gains and losses 
 
                                         52 weeks     52 weeks     52 weeks     52 weeks     52 weeks     52 weeks 
                                            ended        ended        ended        ended        ended        ended 
                                          26 July      26 July      26 July      28 July      28 July      28 July 
                                             2020         2020         2020         2019         2019         2019 
                                           Before  Exceptional        After       Before  Exceptional        After 
                                      exceptional        items  exceptional  exceptional        items  exceptional 
                                            items     (note 4)        items        items     (note 4)        items 
                                           GBP000       GBP000       GBP000       GBP000       GBP000       GBP000 
------------------------------------  -----------  -----------  -----------  -----------  -----------  ----------- 
Disposals 
Fixed assets                                1,002        2,769        3,771      (4,650)        1,015      (3,635) 
Leases                                    (1,125)            -      (1,125)            -            -            - 
Additional costs of disposal                  258          684          942          230          568          798 
------------------------------------  -----------  -----------  -----------  -----------  -----------  ----------- 
                                              135        3,453        3,588      (4,420)        1,583      (2,837) 
Impairments 
Property, plant and equipment (note 
 13)                                            -       28,602       28,602            -        3,550        3,550 
Intangible assets (note 12)                     -       10,699       10,699            -            -            - 
Right-of-use assets                             -        4,722        4,722            -            -            - 
Other assets (note 15)                          -            -            -            -          145          145 
------------------------------------  -----------  -----------  -----------  -----------  -----------  ----------- 
                                                -       44,023       44,023            -        3,695        3,695 
Other                                                                                  -            -            - 
Onerous lease provision                         -            -            -            -        1,762        1,762 
Other property gains                        (619)            -        (619)      (1,179)            -      (1,179) 
------------------------------------  -----------  -----------  -----------  -----------  -----------  ----------- 
                                            (619)            -        (619)      (1,179)        1,762          583 
 
Total property (gains)/losses               (484)       47,476       46,992      (5,599)        7,040        1,441 
------------------------------------  -----------  -----------  -----------  -----------  -----------  ----------- 
 
   4.      Exceptional items 
 
                                               52 weeks  52 weeks 
                                                  ended     ended 
                                                26 July   28 July 
                                                   2020      2019 
                                                 GBP000    GBP000 
--------------------------------------------   --------  -------- 
Operating exceptional items 
Covid-19 
Stock losses                                      5,862         - 
Equipment                                         6,167         - 
Staff costs                                      17,062         - 
---------------------------------------------  --------  -------- 
                                                 29,091         - 
 
Other 
Gaming machine settlement                      (15,890)         - 
 
Total exceptional operating costs                13,201         - 
---------------------------------------------  --------  -------- 
 
Exceptional property losses 
Disposal programme 
Loss on disposal of pubs                          3,453     1,583 
Impairment of property plant and equipment        4,698     1,298 
Impairment of other non-current assets                -        93 
Onerous lease provision                               -     1,134 
---------------------------------------------  --------  -------- 
                                                  8,151     4,108 
Other property losses 
Impairment of early stage development costs       1,290         - 
Impairment of delayed projects                    2,112         - 
Impairment of trading pubs                       25,224     2,304 
Impairment of intangible assets                  10,699         - 
Onerous lease provision                               -       628 
---------------------------------------------  --------  -------- 
                                                 39,325     2,932 
 
Total exceptional property losses                47,476     7,040 
---------------------------------------------  --------  -------- 
 
Exceptional tax 
Impact of corporate tax rate change               4,252         - 
Tax effect on exceptional items                 (5,885)     (188) 
---------------------------------------------  --------  -------- 
                                                (1,633)     (188) 
 
Total exceptional items                          59,044     6,852 
---------------------------------------------  --------  -------- 
 

Covid-19

The company had recognised an exceptional charge of GBP29,091,000 which included GBP5,862,000 for stock which perished, GBP6,167,000 for personal protective equipment and hygiene products and GBP17,062,000 on pub-based staff costs during the closure period. The payments made to staff during this period are amounts paid by the company to staff over and above the furlough grants received and the costs of employing staff during preopening training and pub-cleaning.

Assuming that the company would have been trading in a similar manner in the second half of the year to that of the first,

the full impact of 'lockdown' on the company is estimated to be GBP0.5 billion in lost sales, GBP152 million in lost profits and a

GBP156-million reduction in free cash flow [1].

[1] Information on the impact of Covid-19 on the full-year results is an estimate based on historic trends and does not form part of the required reporting within these financial statements; consequently, a review of these numbers does not form part of the audit work completed by the company's auditor.

.

   4.      Exceptional items (continued) 

Gaming machine settlement

The income of GBP15,890,000 related to a long-standing claim with HMRC, relating to VAT on gaming machines. HMRC first paid the company these monies in April 2010; following an appeal by HMRC, the company paid back the original monies and an interest charge of GBP997,000 in October 2013. During the financial year, HMRC agreed to settle this amount with the company. The amount recognised is the settlement value including interest less professional fees paid by the company in support of

this case.

The company has requested that HMRC repay the interest of GBP997,000 charged to the company between April 2010 and October 2013. As repayment of these monies is not certain, it has not been recognised in the financial year ended 26 July 2020.

Disposal programme

The company has offered several of its sites for sale. At the year end, a further eight (2019: eight) sites had been sold.

The company closed one pub in the year which fell outside of the disposal programme's scope.

In the table above, the costs classified as loss on disposal are the losses on sold sites and associated costs to sale.

Other property losses

The company has reviewed its approach to capitalising costs in the early stages of a pub's development. In future, some initial costs will be expensed to the income statement. A property impairment charge of GBP1,290,000 relates to similar costs held on the balance sheet at the start of the year. A further impairment charge for early stage project costs of GBP2,112,000 related to projects being delayed as a result of the current economic environment following lockdown.

Property impairment relates to the situation in which, owing to poor trading performance, pubs are unlikely to generate sufficient cash flows in the future to justify their current book value. In the year, an exceptional charge of GBP25,224,000 (2019: GBP2,304,000) was incurred in respect of the impairment of assets as required under IAS 36. This comprises an impairment charge of GBP25,224,000 (2019: GBP2,304,000), offset by impairment reversals of GBPNil (2019: GBPNil).

During the year, the company reviewed its accounting for the development and implementation of information technology systems. As a result of this review, it is the company's assessment that it will not achieve the future economic benefit from some of these assets, which it had previously anticipated. The impairment charge of GBP9,540,000 reflects the company's view of future economic benefits which will be achieved. An additional impairment charge of GBP1,159,000 was made for the development and implementation of information technology systems for projects which were delayed or cancelled.

The exceptional items listed above generated a net cash outflow of GBP10,575,000 (2019: outflow of GBP6,040,000).

Taxation

An exceptional tax credit of GBP5,885,000, relating to the exceptional operating items, the impairment of right-of-use assets

and a proportion of the impairment of intangible assets, has been recognised.

During the year, the UK government has announced that corporation tax rates will increase from 17% to 19%; this has resulted in an increase in the company's deferred tax liabilities of GBP4,252,000.

   5.      Employee benefits expenses 
 
                                                   52 weeks  52 weeks 
                                                      ended     ended 
                                                    26 July   28 July 
                                                       2020      2019 
                                                     GBP000    GBP000 
------------------------------------------------  ---------  -------- 
Wages and salaries                                  565,032   568,758 
Government grant                                  (131,539)         - 
Social Security costs                                31,710    35,783 
Other pension costs                                   8,308     6,912 
Share-based payments                                 10,705    11,558 
------------------------------------------------  ---------  -------- 
                                                    484,216   623,011 
------------------------------------------------  ---------  -------- 
 
 
Directors' emoluments                                  2020      2019 
                                                     GBP000    GBP000 
------------------------------------------------  ---------  -------- 
Aggregate emoluments                                  1,547     1,858 
Aggregate amount receivable under long-term 
 incentive schemes                                      173       515 
Company contributions to money purchase pension 
 scheme                                                 165       162 
------------------------------------------------  ---------  -------- 
                                                      1,885     2,535 
------------------------------------------------  ---------  -------- 
 

Government grants disclosed above are amounts claimed by the company under the coronavirus job retention scheme.

   5.      Employee benefits expenses (continued) 

The totals below relate to the monthly average number of employees during the year, not the total number of employees at the end of the year (including directors on a service contract).

 
                              2020    2019 
                            Number  Number 
--------------------------  ------  ------ 
Full-time equivalents 
Managerial/administration    4,696   4,442 
Hourly paid staff           20,952  21,035 
--------------------------  ------  ------ 
                            25,648  25,477 
--------------------------  ------  ------ 
 
                              2020    2019 
                            Number  Number 
Total employees 
Managerial/administration    4,792   4,541 
Hourly paid staff           38,427  37,358 
--------------------------  ------  ------ 
                            43,219  41,899 
--------------------------  ------  ------ 
 

The shares awarded as part of the above schemes are based on the cash value of the bonuses at the date of the awards. These awards vest over three years - with their cost spread equally over their three-year life. The share-based payment charge above represents the annual cost of bonuses awarded over the past three years. All awards are settled in equity.

The company operates two share-based compensation plans. In both schemes, the fair values of the shares granted are determined by reference to the share price at the date of the award. The shares vest at a GBPNil exercise price - and there are no market-based conditions to the shares which affect their ability to vest.

 
Share-based payments                            52 weeks   52 weeks 
                                                   ended      ended 
                                                 26 July    28 July 
                                                    2020       2019 
----------------------------------------------  --------  --------- 
Shares awarded during the year (shares)          568,821  1,390,290 
Average price of shares awarded (p)                1,542      1,313 
Market value of shares vested during the year 
 (GBP000)                                         14,097     17,173 
Total obligation of the share-based payments 
 scheme (GBP000)                                  14,999     16,259 
----------------------------------------------  --------  --------- 
 
   6.      Finance income and costs 
 
                                                  52 weeks  52 weeks 
                                                     ended     ended 
                                                   26 July   28 July 
                                                      2020      2019 
                                                    GBP000    GBP000 
------------------------------------------------  --------  -------- 
Finance costs 
Interest payable on bank loans and overdrafts       21,292    21,089 
Amortisation of bank loan issue costs (note 10)      1,541       925 
Interest payable on swaps                           14,522    12,705 
Interest payable on asset-financing                    503       379 
Interest payable on private placement                2,909         - 
------------------------------------------------  --------  -------- 
Finance costs, excluding lease interest             40,767    35,098 
 
Interest payable on leases                          21,980         - 
------------------------------------------------  --------  -------- 
Total finance costs                                 62,747    35,098 
 
Bank interest receivable                             (161)      (41) 
Lease interest receivable                            (451)         - 
------------------------------------------------  --------  -------- 
Total finance income                                 (612)      (41) 
 

The finance costs in the income statement were covered 0.3 times by earnings before interest, tax and exceptional items. On a pre-IFRS 16 basis, the finance costs in the income statement were covered 0.2 times (2019: 3.9 times) by earnings before interest, tax and exceptional items.

   7.      Income tax expense 
   (a)   Tax on profit on ordinary activities 

The standard rate of corporation tax in the UK is 19.00%. The company's profits for the accounting period are taxed at a rate of 19.00% (2019: 19.00%).

 
                                        52 weeks     52 weeks     52 weeks     52 weeks     52 weeks     52 weeks 
                                           ended        ended        ended        ended        ended        ended 
                                         26 July      26 July      26 July      28 July      28 July      28 July 
                                            2020         2020         2020         2019         2019         2019 
                                          Before  Exceptional        After       Before  Exceptional        After 
                                     exceptional        items  exceptional  exceptional        items  exceptional 
                                           items        (note        items        items        (note        items 
                                                           4)                                     4) 
                                          GBP000       GBP000       GBP000       GBP000       GBP000       GBP000 
-----------------------------------  -----------  -----------  -----------  -----------  -----------  ----------- 
Taken through income 
 statement 
Current income tax: 
Current income tax (credit)/charge       (2,827)      (7,502)     (10,329)       23,406        (273)       23,133 
Previous period adjustment                   227            -          227        (922)            -        (922) 
-----------------------------------  -----------  -----------  -----------  -----------  -----------  ----------- 
Total current income 
 tax                                     (2,600)      (7,502)     (10,102)       22,484        (273)       22,211 
 
Deferred tax: 
Temporary differences                    (3,660)        1,617      (2,043)        2,174           85        2,259 
Previous year deferred 
 tax charge/(credit)                          90            -           90      (1,828)            -      (1,828) 
Impact of change in 
 UK tax rate                                   -        4,252        4,252            -            -            - 
-----------------------------------  -----------  -----------  -----------  -----------  -----------  ----------- 
Total deferred tax                       (3,570)        5,869        2,299          346           85          431 
 
Tax (credit)/charge                      (6,170)      (1,633)      (7,803)       22,830        (188)       22,642 
-----------------------------------  -----------  -----------  -----------  -----------  -----------  ----------- 
 
                                        52 weeks     52 weeks     52 weeks     52 weeks     52 weeks     52 weeks 
                                           ended        ended        ended        ended        ended        ended 
                                         26 July      26 July      26 July      28 July      28 July      28 July 
                                                                                   2019         2019         2019 
                                            2020         2020         2020         2019         2019         2019 
                                          Before  Exceptional        After       Before  Exceptional        After 
                                     exceptional        items  exceptional  exceptional        items  exceptional 
                                           items        (note        items        items        (note        items 
                                                           4)                                     4) 
                                          GBP000       GBP000       GBP000       GBP000       GBP000       GBP000 
-----------------------------------  -----------  -----------  -----------  -----------  -----------  ----------- 
Taken through equity 
Current tax                                (226)            -        (226)        (514)            -        (514) 
Deferred tax                                 423            -          423            5            -            5 
-----------------------------------  -----------  -----------  -----------  -----------  -----------  ----------- 
Tax charge/(credit)                          197            -          197        (509)            -        (509) 
-----------------------------------  -----------  -----------  -----------  -----------  -----------  ----------- 
 
                                        52 weeks     52 weeks     52 weeks     52 weeks     52 weeks     52 weeks 
                                           ended        ended        ended        ended        ended        ended 
                                         26 July      26 July      26 July      28 July      28 July      28 July 
                                            2020         2020         2020         2019         2019         2019 
                                          Before  Exceptional        After       Before  Exceptional        After 
                                     exceptional        items  exceptional  exceptional        items  exceptional 
                                           items        (note        items        items        (note        items 
                                                           4)                                     4) 
                                          GBP000       GBP000       GBP000       GBP000       GBP000       GBP000 
-----------------------------------  -----------  -----------  -----------  -----------  -----------  ----------- 
Taken through comprehensive 
 income 
Deferred tax charge 
 on swaps                                (5,720)            -      (5,720)      (4,243)            -      (4,243) 
Impact of change in 
 UK tax rate                             (1,555)            -      (1,555)            -            -            - 
-----------------------------------  -----------  -----------  -----------  -----------  -----------  ----------- 
Tax credit                               (7,275)            -      (7,275)      (4,243)            -      (4,243) 
-----------------------------------  -----------  -----------  -----------  -----------  -----------  ----------- 
 
   7.      Income tax expense (continued) 
   (b)   Reconciliation of the total tax charge 

The taxation charge for the 52 weeks ended 26 July 2020 is based on the pre-exceptional profit before tax of GBP44.7m

and the estimated effective tax rate before exceptional items for the 52 weeks ended 26 July 2020 of 13.8% (2019: 22.3%).

This comprises a pre-exceptional current tax rate of 5.8% (2019: 22.0%) and a pre-exceptional deferred tax charge of

8.0% (2019: 0.3% charge).

The UK standard weighted average tax rate for the period is 19.0% (2019: 19.0%). The current tax rate is higher than

the UK standard weighted average tax rate, owing mainly to depreciation which is not eligible for tax relief.

 
                                         52 weeks     52 weeks     52 weeks     52 weeks 
                                            ended        ended        ended        ended 
                                          26 July      26 July      28 July      28 July 
                                             2020         2020         2019         2019 
                                           Before        After       Before        After 
                                      exceptional  exceptional  exceptional  exceptional 
                                            items        items        items        items 
                                           GBP000       GBP000       GBP000       GBP000 
------------------------------------  -----------  -----------  -----------  ----------- 
(Loss)/profit before income 
 tax                                     (44,687)    (105,364)      102,459       95,419 
 
Profit multiplied by the UK 
 standard rate of                         (8,491)     (20,019)       19,467       18,130 
corporation tax of 19.0% (2019: 
 19.0%) 
Abortive acquisition costs and 
 disposals                                      6            6           85           85 
Other disallowables                            86          216          384          567 
Other allowable deductions                   (35)         (35)        (111)        (111) 
Capital gains - effects of reliefs            603          603        (380)        (295) 
Non-qualifying depreciation                    83        5,122        2,487        3,368 
Deduction for shares and SIPs                 622          622        (449)        (449) 
Remeasurement of other balance 
 sheet items                                 (67)         (67)         (71)         (71) 
Unrecognised losses in overseas 
 companies                                    706        1,180          557          557 
Unrecognised losses capital 
 losses                                         -            -        3,611        3,611 
Adjust current year deferred 
 tax movement to 19.0%                          -        4,252            -            - 
Previous year adjustment - current 
 tax                                          227          227        (922)        (922) 
Previous year adjustment - deferred 
 tax                                           90           90      (1,828)      (1,828) 
------------------------------------  -----------  -----------  -----------  ----------- 
Total tax expense reported in 
 the income statement                     (6,170)      (7,803)       22,830       22,642 
------------------------------------  -----------  -----------  -----------  ----------- 
 
   (c)   Reconciliation of the total tax charge 
 
Current tax liability/(asset) 
---------------------------------    -------- 
                                       GBP000 
As at 29 July 2018                      8,950 
Charge to the income statement         22,211 
Credited to equity                      (514) 
Paid                                 (19,661) 
-----------------------------------  -------- 
As at 28 July 2019                     10,986 
-----------------------------------  -------- 
Credited to the income statement     (10,102) 
Credited to equity                      (226) 
Paid                                 (10,971) 
-----------------------------------  -------- 
As at 26 July 2020                   (10,313) 
-----------------------------------  -------- 
 
   7.      Income tax expense (continued) 
   (d)   Deferred tax 

The deferred tax in the balance sheet is as follows:

The Finance Act 2020 maintained the main rate of corporation tax rate at 19% from 1 April 2020, overriding the Finance Act 2017 which had reduced the main rate to 17% from that date. Deferred tax balances at the year end have been recognised

at a corporation tax rate of 19% (2019: 17%).

 
Deferred tax liabilities                                         Accelerated tax          Other    Total 
                                                                    depreciation      temporary 
                                                                                    differences 
                                                                          GBP000         GBP000   GBP000 
------------------------------------------------------------     ---------------  -------------  ------- 
At 28 July 2019                                                           36,799          4,255   41,054 
Previous year movement posted to the income statement                        683          (593)       90 
Movement during year posted to the income statement                      (5,077)          2,637  (2,440) 
Impact of tax rate change posted to the income statement                   3,812            440    4,252 
---------------------------------------------------------------  ---------------  -------------  ------- 
At 26 July 2020                                                           36,217          6,739   42,956 
---------------------------------------------------------------  ---------------  -------------  ------- 
 
Deferred tax assets                                                        Share  Interest-rate    Total 
                                                                           based          swaps 
                                                                        payments 
                                                                          GBP000         GBP000   GBP000 
------------------------------------------------------------     ---------------  -------------  ------- 
At 28 July 2019                                                            1,638          8,342    9,980 
Previous year movement posted to the income statement                          -              -        - 
Movement during year posted to the income statement                        (397)              -    (397) 
Movement during year posted to comprehensive income                            -          5,720    5,720 
Movement during year posted to equity                                      (423)              -    (423) 
Impact of change in tax rate posted to comprehensive income                    -          1,555    1,555 
---------------------------------------------------------------  ---------------  ------------- 
At 26 July 2020                                                              818         15,617   16,435 
---------------------------------------------------------------  ---------------  -------------  ------- 
 

The company has recognised deferred tax assets of GBP16.4m, which it expected to offset against future profits.

Deferred tax assets and liabilities have been offset as follows:

Other temporary differences of GBP6.7m include deferred tax of GBP2.5m on the gaming machine settlement and GBP4.2m of

rolled-over property gains.

 
                                               2020     2019 
                                             GBP000   GBP000 
----------------------------------------     ------  ------- 
Deferred tax liabilities                     42,956   41,054 
Offset against deferred tax assets            (818)  (1,638) 
-----------------------------------------    ------  ------- 
Deferred tax liabilities                     42,138   39,416 
-------------------------------------------  ------  ------- 
 
Deferred tax assets                          16,435    9,980 
Offset against deferred tax liabilities       (818)  (1,638) 
-----------------------------------------    ------  ------- 
Deferred tax asset                           15,617    8,342 
-------------------------------------------  ------  ------- 
 

As at 26 July 2020, the company had a potential deferred tax asset of GBP4.9m (2019: GBP3.6m), relating to capital losses.

   8.      Earnings and free cash flow per share 
   (a)     Weighted average number of shares 

Earnings per share are based on the weighted average number of shares in issue of 108,550,647 (2019: 105,439,345), including those held in trust in respect of employee share schemes. Earnings per share, calculated on this basis, are usually referred to as 'diluted', since all of the shares in issue are included.

Accounting standards refer to 'basic earnings' per share - these exclude those shares held in trust in respect of employee share schemes.

During a period where a company makes a loss, accounting standards require that 'dilutive' shares - for the company, those held in trust in respect of employee share schemes - not be included in the earning per share calculation, because they will reduce the reported loss per share; consequently, all per-share measures in the current period are based on the number of shares in issue less shares held in trust of 106,554,289.

 
Weighted average number of shares                                   52 weeks     52 weeks 
                                                                       ended        ended 
                                                                     26 July      28 July 
                                                                        2020         2019 
---------------------------------------------------------------  -----------  ----------- 
Shares in issue (used for diluted EPS)                           108,550,647  105,439,345 
Shares held in trust                                             (1,996,358)  (2,313,464) 
---------------------------------------------------------------  -----------  ----------- 
Shares in issue less shares held in trust (used for basic EPS)   106,554,289  103,125,881 
---------------------------------------------------------------  -----------  ----------- 
 

The weighted average number of shares held in trust for employee share schemes has been adjusted to exclude those shares which have vested, yet remain in trust.

   (b)    Earnings per share 
 
52 weeks ended 26 July 2020                       Profit  Basic EPS  Diluted EPS 
                                                  GBP000      pence        pence 
----------------------------------------------  --------  ---------  ----------- 
Earnings (loss after tax)                       (97,561)     (89.9)       (89.9) 
Exclude effect of exceptional items after tax     59,044       54.4         54.4 
----------------------------------------------  --------  ---------  ----------- 
Earnings before exceptional items               (38,517)     (35.5)       (35.5) 
Exclude effect of property gains                   (484)      (0.4)        (0.4) 
----------------------------------------------  --------  ---------  ----------- 
Underlying earnings before exceptional items    (39,001)     (35.9)       (35.9) 
----------------------------------------------  --------  ---------  ----------- 
 
 
 
 
52 weeks ended 26 July 2020 - pre IFRS 16         Profit  Basic EPS  Diluted EPS 
---------------------------------------------- 
                                                  GBP000      pence        pence 
----------------------------------------------  --------  ---------  ----------- 
Earnings (loss after tax)                       (89,610)     (82.6)       (82.6) 
Exclude effect of exceptional items after tax     59,673       55.0         55.0 
----------------------------------------------  --------  ---------  ----------- 
Earnings before exceptional items               (29,937)     (27.6)       (27.6) 
Exclude effect of property losses                    641        0.6          0.6 
----------------------------------------------  --------  ---------  ----------- 
Underlying earnings before exceptional items    (29,296)     (27.0)       (27.0) 
----------------------------------------------  --------  ---------  ----------- 
 
 
52 weeks ended 28 July 2019               Profit  Basic EPS  Diluted EPS 
                                          GBP000      pence        pence 
---------------------------------------  -------  ---------  ----------- 
Earnings (profit after tax)               72,777       70.6         69.0 
Exclude effect of exceptional items 
 after tax                                 6,852        6.6          6.5 
---------------------------------------  -------  ---------  ----------- 
Earnings before exceptional items         79,629       77.2         75.5 
Exclude effect of property gains         (5,599)      (5.4)        (5.3) 
---------------------------------------  -------  ---------  ----------- 
Underlying earnings before exceptional 
 items                                    74,030       71.8         70.2 
---------------------------------------  -------  ---------  ----------- 
 

The diluted earnings per share before exceptional items have decreased by 138.5% (2019: decreased by 4.7%).

   9.      Earnings and free cash flow per share (continued) 
   (c)     Free cash flow per share 

The calculation of free cash flow per share is based on the net cash generated by business activities and available for investment in new pub developments and extensions to current pubs, after funding interest, corporation tax, operating lease principal payments, loan issue costs, all other reinvestment in pubs open at the start of the period and the purchase of own shares under the employee Share Incentive Plan ('free cash flow'). It is calculated before taking account of proceeds from property disposals, inflows and outflows of financing from outside sources and dividend payments and is based on the weighted average number of shares in issue, including those held in trust in respect of the employee share schemes.

 
                              Free cash  Basic free    Diluted 
                                                          free 
                                   flow   cash flow  cash flow 
                                          per share  per share 
                                 GBP000       pence      pence 
----------------------------  ---------  ----------  --------- 
52 weeks ended 26 July 2020    (58,852)      (54.2)     (54.2) 
52 weeks ended 28 July 2019      96,998        94.1       92.0 
----------------------------  ---------  ----------  --------- 
 
   (d)    Owners' earnings per share 

Owners' earnings measure the earnings attributable to shareholders from current activities adjusted for significant non-cash items and one-off items. Owners' earnings are calculated as profit before tax, exceptional items, depreciation and amortisation and property gains and losses less reinvestment in current properties and cash tax. Cash tax is defined as the current year's current tax charge.

 
52 weeks ended 26 July 2020                Owners'    Basic  Diluted 
                                          Earnings  Owners'  Owners' 
                                                        EPS      EPS 
                                            GBP000    pence    pence 
----------------------------------------  --------  -------  ------- 
Loss before tax and exceptional items 
 (income statement) [1]                   (34,095)   (32.0)   (31.4) 
Exclude depreciation and amortisation 
 (note 2)                                   79,271     74.4     73.0 
Exclude amortised on other fixed assets 
 [2]                                           368      0.3      0.3 
Less reinvestment in current properties     32,062     30.1     29.6 
Exclude property losses (note 3)               641      0.6      0.6 
Less accelerated tax relief on leases 
 [3]                                       (2,012)    (1.9)    (1.9) 
Less cash tax (note 7)                       2,827      2.7      2.7 
----------------------------------------  --------  -------  ------- 
Owners' earnings                            79,062     74.2     72.8 
----------------------------------------  --------  -------  ------- 
 
 
 
52 weeks ended 28 July 2019                Owners'    Basic  Diluted 
                                          Earnings  Owners'  Owners' 
                                                        EPS      EPS 
                                            GBP000    pence    pence 
----------------------------------------  --------  -------  ------- 
Profit before tax and exceptional items 
 (income statement)                        102,459     99.4     97.2 
Exclude depreciation and amortisation 
 (note 2)                                   81,811     79.3     77.6 
Less reinvestment in current properties   (55,239)   (53.6)   (52.4) 
Exclude property gains (note 3)            (5,599)    (5.4)    (5.3) 
Less cash tax (note 7)                    (23,406)   (22.7)   (22.2) 
----------------------------------------  --------  -------  ------- 
Owners' earnings                           100,026     97.0     94.9 
----------------------------------------  --------  -------  ------- 
 

The diluted owners' earnings per share decreased by 23.3% (2019: increased by 6.0%).

As the company made an owners' earnings profit in the period, the 'diluted' owners'-earnings-per-share calculation includes shares held in trust, as their inclusion would not have an 'antidilutive' effect.

[1] Loss pre-IFRS 16.

[2] Being the amortisation of other fixed assets which would have been charged, if IFRS 16 were not adopted.

[3] Being the accelerated tax relief received on leases as a result of the introduction of IFRS 1

   8.   Earnings and free cash flow per share (continued) 
 
Analysis of additions by type                    52 weeks  52 weeks 
                                                    ended     ended 
                                                  26 July   28 July 
                                                     2020      2019 
----------------------------------------------   --------  -------- 
Reinvestment in existing pubs                      32,062    55,239 
Investment in new pubs and pub extensions          41,047    35,172 
Freehold reversions and investment properties      98,463    77,207 
-----------------------------------------------  --------  -------- 
                                                  171,572   167,618 
 ----------------------------------------------  --------  -------- 
 
Analysis of additions by category                52 weeks  52 weeks 
                                                    ended     ended 
                                                  26 July   28 July 
                                                     2020      2019 
----------------------------------------------   --------  -------- 
Property, plant and equipment (note 13)           164,450   161,242 
Intangible assets (note 12)                         1,047     5,925 
Investment properties (note 14)                     6,075         - 
Other non-current assets (note 15)                      -       451 
-----------------------------------------------  --------  -------- 
                                                  171,572   167,618 
 ----------------------------------------------  --------  -------- 
 
   (e)     Operating profit per share 
 
                              Operating  Basic operating     Diluted 
                                                           operating 
                                 profit           profit      profit 
                                               per share   per share 
                                 GBP000            pence       pence 
----------------------------  ---------  ---------------  ---------- 
52 weeks ended 26 July 2020 
 before exceptional items        16,964             15.5        15.8 
Impact of exceptional items    (13,201)           (12.3)      (12.3) 
52 weeks ended 26 July 2020 
 after exceptional items          3,763              3.4         3.4 
52 weeks ended 28 July 2019     131,917            127.9       125.1 
----------------------------  ---------  ---------------  ---------- 
 

As the company made an operating profit in the period the 'diluted' operating profit per shares includes shares in held in trusts as the inclusion of these share would not have an 'anti-dilutive' effect.

   9.      Cash generated from operations 
 
                                           52 weeks*  52 weeks  52 weeks 
                                               ended     ended     ended 
                                             26 July   26 July   28 July 
                                                2020      2020      2019 
                                              GBP000    GBP000    GBP000 
-----------------------------------------  ---------  -------- 
(Loss)/profit for the period                (89,610)  (97,561)    72,777 
Adjusted for: 
Tax (note 7)                                 (5,162)   (7,803)    22,642 
Share-based charges (note 2)                  10,705    10,705    11,558 
Loss/(gain) on disposal of property, 
 plant and equipment (note 3)                  3,771     3,771   (3,635) 
Disposal of capitalised leases (note 
 3)                                                -   (1,125)         - 
Net onerous lease provision (note 3)           1,411         -     1,762 
Net impairment charge (note 3)                42,612    44,023     3,695 
Interest receivable (note 6)                   (161)     (161)      (41) 
Interest payable (note 6)                     39,226    39,226    34,173 
Lease interest receivable (note 6)                 -     (451)         - 
Lease interest payable (note 6)                    -    21,980         - 
Amortisation of bank loan issue costs 
 (note 6)                                      1,541     1,541       925 
Depreciation of property, plant and 
 equipment (note 13)                          75,386    75,386    73,779 
Amortisation of intangible assets (note 
 12)                                           3,806     3,806     7,634 
Depreciation on investment properties 
 (note 14)                                        79        79        55 
Amortisation of other non-current assets 
 (note 15)                                       368         -       343 
Aborted properties costs                          33        33       430 
Amortisation of right-of-use assets                -    49,059         - 
                                              84,005   142,508   226,097 
Change in inventories                            622       622     (417) 
Change in receivables                       (21,263)  (17,052)     1,228 
Change in payables                          (24,646)  (50,413)       268 
Cash flow from operating activities           38,718    75,665   227,176 
 

*This column shows the cash generated from operations as it would have been reported, before the introduction of IFRS 16.

The amount of GBP38,718,000 shown is presented at the start of the pre-IFRS 16 cash flow presented within the

primary statements.

The difference of GBP36,947,000 between the cash flow from operating activities of GBP75,665,000 and the pre-IFRS 16 number

of GBP38,718,000 shown in the table below.

 
                                                     26 July 
                                                        2020 
                                                      GBP000 
                                                    -------- 
Cash flow from operating activities                   75,665 
 
Lease liability payments made                       (38,330) 
Lease assets payments received                         1,383 
                                                    -------- 
Cash flow from operating activities - pre-IFRS 16     38,718 
                                                    -------- 
 
   10.    Analysis of change in net debt 
 
                                                        28 July    IFRS 16       Cash  Non-cash      26 July 
                                                           2019  migration      flows  movement         2020 
                                                         GBP000     GBP000     GBP000    GBP000       GBP000 
Borrowings 
Cash and cash equivalents                                42,950          -    131,501         -      174,451 
Asset-financing creditor - due before one year          (3,287)          -   (13,250)     8,927      (7,610) 
Current net borrowings                                   39,663          -    118,251     8,927      166,841 
 
Bank loans - due after one year                       (770,076)          -   (98,998)   (1,498)    (870,572) 
Asset-financing creditor - due after one year           (6,607)          -          -   (8,927)     (15,534) 
Private placement - due after one year                        -          -   (97,679)      (43)     (97,722) 
Non-current net borrowings                            (776,683)          -  (196,677)  (10,468)    (983,828) 
 
Net debt                                              (737,020)          -   (78,426)   (1,541)    (816,987) 
 
Derivatives 
Interest-rate swaps asset - due after one year              321          -          -     (321)            - 
Interest-rate swaps liability - due after one year     (49,393)          -          -  (32,801)     (82,194) 
Total derivatives                                      (49,072)          -          -  (33,122)     (82,194) 
 
Net debt after derivatives                            (786,092)          -   (78,426)  (34,663)    (899,181) 
 
Leases 
Lease assets - due before one year                            -      1,583    (1,056)     1,209        1,736 
Lease assets - due after one year                             -     11,853          -     (738)       11,115 
Lease obligations - due before one year                       -   (61,252)     19,923  (24,014)     (65,343) 
Lease obligations - due after one year                        -  (570,052)          -    80,664    (489,388) 
Net lease liabilities                                         -  (617,868)     18,867    57,121    (541,880) 
 
Net debt after derivatives and lease liabilities      (786,092)  (617,868)   (59,559)    22,458  (1,441,061) 
 

The cash movement on the private placement of GBP97,679,000 is disclosed in the cash flow statement as an advance under private placement of GBP98,000,000 and a cash payment of loan issue costs of GBP321,000.

The cash movement on the bank loans of GBP98,998,000 is disclosed in the cash flow statement as an advance under bank loans

of GBP100,000,000 and a cash payment of loan issue costs of GBP1,002,000. Total loan issue costs of GBP1,323,000 are disclosed in the cash flow statement.

The cash movement on asset- financing of GBP13,250,000 is disclosed in the cash flow statement as an advance under asset-financing of GBP16,152,000 and principal payments of GBP2,902,000.

Non-cash movements

The non-cash movement in bank loans and the private placement relate to the amortisation of loan issue costs.

The amortised charge for the year of GBP1,541,000 is disclosed in note 6. These are upfront payments made to obtain new borrowings. These costs are charged to the income statement over the expected life of the loan. The movement in interest-rate swaps relates to the change in the 'mark to market' valuations for the year.

   10.    Analysis of change in net debt (continued) 

The migration movement of GBP617,868,000 is the recognition of the lease liability of GBP631,304,000 and the lease asset of GBP13,436,000 on adoption of IFRS 16. The non-cash movement in lease liabilities is analysed in the table below.

 
Non-cash movement in net lease liabilities       26 July 
                                                    2020 
                                                  GBP000 
Recognition of new leases                       (27,361) 
Remeasurements of existing leases liabilities    (7,207) 
Remeasurements of existing leases assets             471 
Disposal of lease                                 85,115 
Cancelled principal payments                       6,127 
Exchange differences                                (24) 
Non-cash movement in net lease liabilities        57,121 
 

The table below calculated a ratio between net debt, being borrowings less cash and cash equivalents, and earnings before interest, tax and depreciation (EBITDA). The numbers in this table are all before the effect of IFRS 16.

 
                                       52 weeks  52 weeks 
                                          ended     ended 
                                        26 July   28 July 
                                           2020      2019 
                                         GBP000    GBP000 
                                       --------  -------- 
Profit before tax (income 
 statement)                            (34,095)   102,459 
Interest (note 6)                        40,606    35,057 
Depreciation                             79,639    81,811 
                                       --------  -------- 
Earnings before interest, tax and 
 depreciation (EBITDA)                   86,150   219,327 
                                       -------- 
 
 
Net debt/EBITDA                            9.48      3.36 
                                       --------  -------- 
 

The depreciation charge in the table above of GBP79,639,000 comprises the non-lease depreciation and amortisation charges disclosed in note 2 of GBP79,271,000 and the amortisation of GBP368,000 which would have been charged on other non-current assets, had IFRS 16 not been implemented.

   11.    Dividends paid and proposed 
 
                                                    52 weeks  52 weeks 
                                                       ended     ended 
                                                     26 July   28 July 
                                                        2020      2019 
                                                      GBP000    GBP000 
--------------------------------------------------  --------  -------- 
Declared and paid during the year: 
 
Dividends on ordinary shares: 
- final for 2017/18: 8.0p (2016/17: 8.0p)                  -     8,435 
- interim for 2018/19: 4.0p (2017/18: 4.0p)                -     4,217 
- final for 2018/19: 8.0p (2017/18: 8.0p)              8,371         - 
                                                       8,371    12,652 
 
Proposed for approval by shareholders at the AGM: 
- final for 2019/20: 8.0p (2018/19: 8.0p)                  -     8,397 
                                                           -     8,397 
 
Dividend per share (p)                                     8        12 
Dividend cover                                             -       5.8 
 

Dividend cover is calculated as profit after tax and exceptional items over dividend paid. Dividend cover has not been shown for the current year, as the company reported a loss in the year.

   12.    Intangible assets 
 
                                    Computer        Assets     Total 
                                    software         under 
                                         and 
                                 development  construction 
                                      GBP000        GBP000    GBP000 
Cost: 
At 29 July 2018                       66,944         1,799    68,743 
Additions                              1,733         4,192     5,925 
Transfers                              1,562       (1,562)         - 
Disposals                               (22)             -      (22) 
At 28 July 2019                       70,217         4,429    74,646 
Additions                                466           581     1,047 
Transfers                              4,206       (4,206)         - 
Disposals                           (41,472)             -  (41,472) 
At 26 July 2020                       33,417           804    34,221 
 
 
Accumulated amortisation: 
At 29 July 2018                     (43,964)             -  (43,964) 
Provided during the period           (7,634)             -   (7,634) 
Disposals                                 22             -        22 
At 28 July 2019                     (51,576)             -  (51,576) 
Provided during the period           (3,806)             -   (3,806) 
Impairment loss                     (10,699)             -  (10,699) 
Disposals                             40,755             -    40,755 
At 26 July 2020                     (25,326)             -  (25,326) 
 
Net book amount at 26 July 
 2020                                  8,091           804     8,895 
Net book amount at 
 28 July 2019                         18,641         4,429    23,070 
Net book amount at 
 29 July 2018                         22,980         1,799    24,779 
 

The majority of intangible assets relates to computer software and software development. Examples include the development costs of our SAP accounting system, our 'Wisdom' property-maintenance system and the 'Wetherspoon app'.

   13.    Property, plant and equipment 
 
                                     Freehold     Short-    Equipment,        Assets      Total 
                                          and 
                               long-leasehold  leasehold      fixtures         under 
                                     property   property  and fittings  construction 
                                       GBP000     GBP000        GBP000        GBP000     GBP000 
Cost: 
At 29 July 2018                     1,110,875    356,160       617,800        54,202  2,139,037 
Additions                              75,547      2,429        38,214        45,052    161,242 
Transfers from investment 
 property                               1,984          -             -             -      1,984 
Transfers                              23,689      1,492         5,316      (30,497)          - 
Exchange differences                      226         22            90           294        632 
Transfer to held for 
 sale                                 (5,076)          -         (810)             -    (5,886) 
Disposals                             (7,605)    (3,412)       (4,349)             -   (15,366) 
Reclassification                       29,532   (29,532)             -             -          - 
At 28 July 2019                     1,229,172    327,159       656,261        69,051  2,281,643 
Additions                              97,419      2,464        24,608        39,959    164,450 
Transfers                              11,804      1,675         9,412      (22,891)          - 
Exchange differences                      685         39           120           505      1,349 
Disposals                             (6,012)    (6,290)       (5,669)             -   (17,971) 
Reclassification                       30,038   (30,038)             -             -          - 
At 26 July 2020                     1,363,106    295,009       684,732        86,624  2,429,471 
 
 
Accumulated depreciation and impairment: 
At 29 July 2018                     (222,037)  (184,575)     (426,352)             -  (832,964) 
Provided during the period           (18,271)   (11,733)      (43,775)             -   (73,779) 
Transfers from investment 
 property                                (76)          -             -             -       (76) 
Exchange differences                     (45)       (18)         (117)             -      (180) 
Impairment loss                       (1,326)    (1,404)         (820)             -    (3,550) 
Transfer to held for 
 sale                                   2,063          -           677             -      2,740 
Disposals                               3,648      3,497         3,992             -     11,137 
Reclassification                     (17,781)     17,781             -             -          - 
At 28 July 2019                     (253,825)  (176,452)     (466,395)             -  (896,672) 
Provided during the period           (19,675)   (10,826)      (44,885)             -   (75,386) 
Exchange differences                     (47)       (77)         (162)             -      (286) 
Impairment loss                      (17,631)    (4,122)       (6,849)             -   (28,602) 
Disposals                               2,051      6,298         5,904             -     14,253 
Reclassification                     (18,170)     18,170             -             -          - 
At 26 July 2020                     (307,297)  (167,009)     (512,387)             -  (986,693) 
 
Net book amount at 26 July 
 2020                               1,055,809    128,000       172,345        86,624  1,442,778 
Net book amount at 
 28 July 2019                         975,347    150,707       189,866        69,051  1,384,971 
Net book amount at 
 29 July 2018                         888,838    171,585       191,448        54,202  1,306,073 
 

Impairment of property, plant and equipment

In assessing whether a pub has been impaired, the book value of the pub is compared with its anticipated future cash flows and fair value. Assumptions are used about sales, costs and profit, using a pre-tax discount rate for future years of 8% (2019: 7%).

If the value, based on the higher of future anticipated cash flows and fair value, is lower than the book value, the difference

is written off as property impairment.

As a result of this exercise, a net impairment loss of GBP 28,602,000 (2019: GBP3,550,000) was charged to property

losses in the income statement, as described in note 4. The assets impaired in the year had a recoverable value of

GBP24,700,000 at year end. In the period depreciation was GBP961,000 lower due historic impairment charges. At the period end, an impairment provision of GBP44,058,000 in carried in relation to property, plant and equipment.

   14.    Investment property 

The company owns three (2019: one) freehold properties with existing tenants - and these assets have been classified

as investment properties. During this year, the company has purchased a further two investment properties.

 
                                                   GBP000 
Cost: 
At 29 July 2018                                     7,751 
Transfer to property, plant and equipment         (1,984) 
At 28 July 2019                                     5,767 
Additions                                           6,075 
At 26 July 2020                                    11,842 
 
Accumulated amortisation: 
At 29 July 2018                                     (257) 
Provided during the period                           (55) 
Transfer to property, plant and equipment              76 
At 28 July 2019                                     (236) 
Provided during the period                           (79) 
At 26 July 2020                                     (315) 
 
Net book amount at 26 July 2020                    11,527 
Net book amount at 28 July 2019                     5,531 
Net book amount at 29 July 2018                     7,494 
 

Rental income received in the period from investment properties was GBP 641,000 (2019: GBP 310,000 ).

Operating costs, excluding depreciation, incurred in relation to these properties amounted to GBP38 ,000 (2019: GBP 8,000 ).

In the opinion of the directors, the fair value of the investment properties is approximately GBP12,000,000.

   15.    Other non-current assets 
 
                                                   GBP000 
Cost: 
At 29 July 2018                                    12,727 
Additions                                             451 
Disposals                                            (75) 
At 28 July 2019                                    13,103 
Transfers to right-of-use asset                  (13,103) 
At 26 July 2020                                         - 
 
Accumulated depreciation and impairment: 
At 29 July 2018                                   (4,802) 
Provided during the period                          (343) 
Impairment loss                                     (145) 
Disposals                                              75 
At 28 July 2019                                   (5,215) 
Transfers to right-of-use asset                     5,215 
At 26 July 2020                                         - 
 
Net book amount at 26 July 2020                         - 
Net book amount at 28 July 2019                     7,888 
Net book amount at 29 July 2018                     7,925 
 
   16.    Going concern 

The directors have made enquiries into the adequacy of the Company's financial resources, through a review of the Company's budget and medium-term financial plan, including capital expenditure plans and cash flow forecasts.

The Company has modelled a range of scenarios, with the base forecast being one in which, over the next 12 months, sales recover gradually to preCovid levels. In addition, the directors have considered several 'downside' scenarios, including adjustments to the base forecast, a period of significantly lower like-for-like sales, regional pub closures for a prolonged time period and the possibility of another national temporary closure ('lockdown') of all of its pubs.

The directors are satisfied that the Company has sufficient liquidity to withstand adjustments to the base forecast, as well as the downside scenarios. The length of the liquidity period, in relation to each outcome, depends on those actions which the Company chooses to take (eg the extent to which cash expenditure is reduced) and also on the level of government financial support (eg reduced business rates) which the Company might receive.

In addition, the directors have noted the range of possible additional liquidity options available to the Company, should they be required.

Material uncertainty, which may cast significant doubt over the Company's ability to trade as a going concern, has resulted from the impact of the Covid-19 virus on the economy and the hospitality industry. It is not clear when the current operating restrictions, such as social distancing measures and reduced pub opening times, will return to 'normal' preCovid levels.

The Company has agreed with its lenders to replace existing financial covenant tests with a minimum liquidity covenant for the period up to and including July 2021. There is material uncertainty beyond this date as to whether financial covenant tests will be satisfied or whether further waivers will be agreed on by lenders. The Company will remain in regular dialogue with its lenders throughout the period.

As a result, the directors have satisfied themselves that the Company will continue in operational existence for the foreseeable future. For this reason, the Company continues to adopt the going-concern basis in preparing its financial statements.

This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact rns@lseg.com or visit www.rns.com.

RNS may use your IP address to confirm compliance with the terms and conditions, to analyse how you engage with the information contained in this communication, and to share such analysis on an anonymised basis with others as part of our commercial services. For further information about how RNS and the London Stock Exchange use the personal data you provide us, please see our Privacy Policy.

END

FR EAEEKFEPEFEA

(END) Dow Jones Newswires

October 16, 2020 02:00 ET (06:00 GMT)

1 Year Wetherspoon ( J.d.) Chart

1 Year Wetherspoon ( J.d.) Chart

1 Month Wetherspoon ( J.d.) Chart

1 Month Wetherspoon ( J.d.) Chart
ADVFN Advertorial
Your Recent History
LSE
JDW
Wetherspoo..
Register now to watch these stocks streaming on the ADVFN Monitor.

Monitor lets you view up to 110 of your favourite stocks at once and is completely free to use.

By accessing the services available at ADVFN you are agreeing to be bound by ADVFN's Terms & Conditions

P: V:gb D:20201022 13:04:30