Mitchells & Butlers explores equity capital raise to ease cash burn as third lockdown bites
In an update to the London Stock Exchange, the group reported that for the 14 weeks ended 2 January 2021 total sales were 67.1% below the previous year, with like-for-like trading down 30.1% across the period.
The group, which operates around 1,700 pubs and restaurants across the UK and and has more than 40,000 employees, has cash balances on hand of £125m, with all facilities drawn.
However, the onset of the latest national lockdown in England this week means its ongoing monthly cash burn has returned to approximately £35m to £40m; levels parallel to previous lockdowns.
Though the group welcomed news on vaccine approval and roll-out, it emphasised the uncertainty of the future of the sector, adding it was 'not possible' to estimate with any certainty what restrictions hospitality may face post-lockdown.
A decision is yet to be made on the timing, size, or terms of the raise.
M&B CEO Phil Urban said: “We are now in a third national lockdown.
"I am consistently impressed by the resilience and energy of our teams as we repeatedly open and close businesses that we have invested in to make Covid secure and urge the government to better understand the huge impact these restrictions are having on the hospitality sector.
"The Job Retention Scheme is temporarily protecting some employment but there is a real and pressing need for support for businesses themselves if we are to return to being the vibrant sector and important employers that we were.
“Mitchells & Butlers was a high performing business going into the pandemic and with the support of our main stakeholders I have every confidence that we can emerge in a strong competitive position once the current restrictions on us are lifted.”
In the final quarter of last year Mitchells & Butlers, which also runs the Toby Carvery and O’Neill’s chains, confirmed that 1,300 staff had been made redundant and up to 20 of its UK pub and restaurant locations had been closed as a result of the impact to trade caused by the Coronavirus pandemic.
