Mitchells & Butlers began the post-Easter period by giving an update on how its business is managing the Covid-19 situation this morning.
In what is its first market update since the lockdown took effect, the company said it had taken a number of actions to reduce its cost base.
Over 99% of employees have been put on furlough, with basic pay for all employees including the board reduced to between 60% and 80%, depending on seniority.
The company – one of the UK’s largest pub and restaurant groups with 1,750 sites – said it had reduced operating costs to the minimum required to keep the estate secure, safe and in good condition, while discretionary capital expenditure projects have been stopped.
“It is possible that the forced closure of our sites, as required by the government, could amount to a technical breach of our secured financing arrangements but, as a first step, we are announcing today that a temporary waiver until 15 May has now been granted to avoid this pending further discussions,” it stated.
M&B operates a wide portfolio of brands, including Harvester, Toby Carvery, All Bar One, Miller & Carter, Premium Country Pubs, Sizzling Pubs, Stonehouse, Vintage Inns, Browns, Castle, Nicholson’s, O’Neill’s and Ember Inns.
Mitchells & Butlers has an established strategy of strengthening the balance sheet by reducing net debt and gearing, which it insists has put it in good shape to address the challenge it now faces.
The company said it has material cash resources which it believes should be sufficient to fund obligations well into the second half of the year.
It added: “Great uncertainty remains not only as to the extent of the current shutdown but also the profile of any reopening and recovery period back to normality.
“In light of this the group is in close contact with stakeholders, with whom it has strong relationships and who are supportive of the long-term fundamentals of the business.”