close

M&B explores equity capital raise as all 1,700 sites remain closed

Toby Carvery

Mitchells & Butlers is set to raise additional capital in response to uncertainty over when its pubs and restaurants will be allowed to open again.

No decision has yet been made with regards to the timing, size, or terms of an equity capital raise, but the M&B board, which includes representatives of the major shareholders, is unanimous in its support for this action being taken.

The funding is aimed at giving the group increased financial and operational flexibility as it navigates the latest lockdown.

Story continues below
Advertisement

The move comes as the group revealed how progressively tighter restrictions imposed over the last three months have devastated its business.

Sales during its fiscal first quarter to 2 January fell 67% year-on-year and 30% on a like-for-like basis (for sites when open, excluding periods of closure).

The Harvester and Toby Carvery owner currently has cash balances on hand of £125m, with all facilities drawn. But with no sites trading, ongoing monthly cash burn has returned to the level of £35m to £40m before payment of debt service of £50m per quarter.

Chief executive Phil Urban said the company welcomed news on vaccine approval and roll-out, but admitted it was not possible to estimate with any confidence what restrictions on its ability to trade lie ahead of it and for how long.

“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.”

M&B suffers monthly EBITDA loss of £15m during lockdown but in “good shape” to recover

Tags : Mitchells & ButlersPubsRestaurants
Andrew Seymour

The author Andrew Seymour

Leave a Response