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Wetherspoon's chief blames UK's 'no common sense' COVID lockdowns for £46m loss

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Founder and chairman of JD Wetherspoon, Tim Martin. Photo: Dominic Lipinski/PA via Getty Images
Founder and chairman of JD Wetherspoon, Tim Martin. Photo: Dominic Lipinski/PA via Getty Images

JD Wetherspoon (JDW.L) boss, Tim Martin has lambasted the UK government's handling of the coronavirus pandemic and its "changing guidelines" for hitting sales at the pub chain.

Martin used the company's outlook statement to claim that the government was "unscientific" in its approach by not considering evidence that curfews and requirements for customers to order food with drinks would not reduce COVID infection rates.

It comes as the pub chain posted a £46.2m ($64.4m) loss in its half year results as Britain’s lockdown restrictions cut sales for the company in half. It had posted a £57.9m profit in the same time period last year.

In its results for the 26 weeks to January 24 2021, the FTSE 250 (^FTMC) revealed that revenues plunged 53.8% to £431.1m. Like-for-like sales fell 53.9%

"It is disappointing that so many regulations, implemented at tremendous cost to the nation, appear to have had no real basis in common sense or science — for example, curfews, 'substantial meals' with drinks, and masks for bathroom visits," Martin said.

He added that the "future of the industry, and of the UK economy, depends on a consistent set of sensible policies, based on scientific evidence, rather than on political expediency."

According to prime minister Boris Johnson's four stage roadmap out of lockdown, indoor drinking won't be able to resume until 17 May, and the company has brought the certainty of that timeline into question.

It is speculating that despite the successful COVID vaccine rollout, there could be "more knee-jerk reactions" in government policy to the latest news updates.

Shares in the company declined 1.3% around 8:30AM in London.

Chart: Yahoo Finance
Chart: Yahoo Finance

Wetherspoons has also announced it will scrap its interim dividend for its shareholders. "In the current circumstances, the board has not recommended the payment of an interim dividend."

“The pandemic has taken a sledgehammer to Wetherspoon’s business model, which is focused on pulling in high volumes of punters while keeping prices low. The stop start nature of the business during the crisis has seen a yo-yo effect to some extent, but overall the picture was of a sharp decline. Like for like sales plunged by 53.9% as lockdowns and strict social distancing measures turned packed venues into empty caverns. Given the pre-tax loss of £61.4 million, it comes as no surprise the interim dividend has been scrapped," Susannah Streeter, senior investment and markets analyst, said.

READ MORE: Wetherspoons to open 60 pubs in Scotland from 26 April

Earlier in March the pub chain announced that it will open its outdoor spaces, including beer gardens, rooftop gardens and patios, at 394 of its pubs in England from 12 April.

WATCH: Wetherspoon chairman makes case for safe reopening

The pubs will be open from 9am to 9pm (Sunday to Thursday) and 9am to 10pm (Friday and Saturday), although some have restrictions on closing times and in those cases will close earlier.

They will offer a slightly reduced menu and food will be available from 9am to 8pm seven days a week.

Customers will be able to order and pay through the Wetherspoon app, but staff will be able to take orders and payment at the table from those who don’t have the app.

Wetherspoons announced on Wednesday that it will open 60 of its pubs in Scotland from 26 April, along with seven hotels.

The news came as first minister Nicola Sturgeon said that the country's "stay at home" order — in place since December — will be lifted on 2 April.

The reopening of hairdressers and some shops will be phased in from 5 April, with restrictions expected to be significantly reduced from 26 April.

"In accordance with Scottish government rules the pubs will serve food and non-alcoholic drinks inside the pubs and the pubs will also be able to serve alcohol (without the requirement for a meal) in external areas" Wetherspoon said.

Regional manager for Scotland, Helen Dumbreck, said “our pubs play an important part in the social life of their respective towns and cities and it is great news that they will be able to reopen soon," adding that each pub will observe necessary safety rules for COVID-19.

WATCH: What UK government COVID-19 support is available?

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