JD Wetherspoon has warned it will make a loss this year because of the coronavirus pandemic and the pub chain expects sales to be hit when the government’s eat out to help out scheme ends next month.

The group, which has reopened 844 of its 873 pubs, said bar and food sales were down 17% year in the 44-day period to 16 August, marking the period since its reopenings after lockdown.

Wetherspoons said the government’s eat out to help out scheme, which gives diners 50% off to a maximum of £10 per person on Monday to Wednesday in August, had boosted sales during the month.

“Sales have gradually improved, with a rapid acceleration recently, largely due to subsidised food, coffee and soft drinks in the early part of the week,” the company said. “Sales have also been helped by the addition of extra outside seating.”

Wetherspoons said landlords, landowners and local licensing authorities had proved to be flexible in accommodating extra outside space to help sales.

Tim Martin, the chairman of Wetherspoons, said the group expected a period of “more subdued sales” once the scheme came to an end at the end of August and warned it would make a loss for the year to the end of 26 July, compared with a profit of £102.5m the previous year.

He said the chain, which has opened two new pubs since lockdown restrictions were eased in July, had recorded 24 positive tests for coronavirus among staff since reopening in July.

“Wetherspoons had five positive tests for Covid-19 among its 43,000 staff before lockdown and has had 24 positive tests since pubs reopened on 4 July,” he said. “Since reopening, the amount of testing has substantially increased. Risk cannot be eliminated completely in pubs but sensible social distancing and hygiene policies, common ones with continued assistance and cooperation from the authorities, should minimise it.”

Wetherspoons also said it intends to open discussions with its lenders to seek waivers on bank covenants on loans in the current financial year. The company said it remains in a “sound financial position”, raising £141m in a share placing and securing £48.3m from the government’s coronavirus business interruption loan scheme.

The company called on the government to extend the cut in the rate of VAT on food sales, which has temporarily been dropped from 20% to 5% to help spur demand, for the long term.

“Wetherspoon’s strong position within the UK pub sector – consumer traction and well-located, now largely freehold estate – should allow it to return to profitability fast,” said James Wheatcroft, equity analyst at Barclays.

Martin also hit out at media reports that some of its establishments were not adhering to health and safety rules and allowing overcrowding.

“Wetherspoons has made strenuous efforts to adhere to government regulations and guidance,” he said. He added that after an article about one pub, the Fox on the Hill, the establishment had received visits from the police, licensing authorities and public health officials.

Martin said that last week the company had received an email from the London Coronavirus Response Cell giving the pub’s infection control measures a clean bill of health.