- Mitchells & Butlers considers raising capital as the UK imposes lockdown.
- The pub operator slashed 1,300 jobs to shore up finances in 2020.
- Mitchells & Butlers registers a 67.1% year over year decline in sales.
Mitchells & Butlers plc (LON: MAB) expects the newly imposed countrywide lockdown in the United Kingdom to weigh on its business in the upcoming weeks. In a bid to combat the economic impact of the COVID-19 restrictions, the company said that it was considering a capital raise to shore up finances. It, however, refrained from divulging any further information on the size, timing, and terms of the capital raise.
Mitchells & Butlers was seen more than 5% down in premarket trading on Thursday and slid another 3.5% in the next hour. At 220 pence per share, the stock has recovered sharply from a low of 101 pence per share in March 2020. Learn more about the capital markets.
Are you looking for fast-news, hot-tips and market analysis?
Sign-up for the Biedex Markets newsletter, today.
M&B slashed 1,300 jobs to shore up finances in 2020
According to Mitchells & Butlers, its board has already voted unanimously in favour of the capital raise. The pub operator resorted to suspended dividend payments and slashing its workforce by 1,300 jobs in 2020 as the ongoing pandemic restricted people to their homes.
In a report published in the last week of November, M&B had registered a 34% annualised decline in its full-year revenue due to the COVID-19 disruptions.
CEO Phil Urban commented on the news on Thursday and 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.”
Mitchells & Butlers registers a 67.1% decline in sales
In the 14 weeks that concluded on 2nd January, the owner of Toby Carvery and All Bar One said that sales posted a 67.1% decline on a year over year basis. M&B highlighted in its statement on Thursday that a fraction of its Germany and UK sites could remain open for public in December as the governments opted for stricter restrictions to combat the COVID-19 crisis.
The Birmingham-based company valued its monthly cash burn in the range of £35 million to £40 million before a debt service payment of £50 million per quarter. In separate news from the United Kingdom, Sainsbury’s lifted its profit guidance on Thursday after robust trading during the Christmas period.
Mitchells & Butlers performed largely downbeat in the stock market last year with an annual decline of more than 50%. At the time of writing, it is valued at £918.49 million.