LSE – Impact of lockdown three on Mitchells & Butlers

The operator of more than 1,700 pubs under brands including Harvester, Toby Carvery, O’Neills and All Bar One told the London Stock Exchange that it has cash balances of £125m, but that amid the latest measures its ongoing monthly cash burn has returned to the £35m to £40m levels seen during previous lockdowns.

Prime Minister Boris Johnson’s announcement of a third national lockdown in England means that the nation’s pubs will remain closed until February at the earliest​ as the Government bids to curb a sharp rise in Covid-19 cases. 

Though the UK’s largest listed pub group welcomed the approval and rollout of Covid-19 vaccines over the past few weeks, it stressed that with the sector shrouded in uncertainty it was “not possible” to estimate what restrictions venues may face post-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,” M&B CEO Phil Urban said. 

“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. 

“M&B 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 recorded a £300m swing from pre-tax profit to loss​ in the 52 weeks ended 26 September 2020.

The operator also reported a 34.1% drop in revenue – which totalled £1,475m compared to £2,237m in 2019 – alongside a pre-tax loss of £123m versus a profit of £177m during the previous financial year.  

This included a 3.5% dip in like-for-like sales during the same 52-week period.

What’s more, the FTSE 250 group revealed that it laid off in the region of 1,300 staff during the same period.

A decision is yet to be made on the timing, size, or terms of the raise.