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Pub group Mitchells & Butlers seeks cash amid lockdown closures

Pub group Mitchells & Butlers seeks cash amid lockdown closures
Business
Pub group Mitchells & Butlers says it is examining raising money from investors because it is unclear how long current restrictions will last.

Each month closed loses the business up to £40m, plus it has to meet £50m debt costs each quarter.

"The directors believe it is prudent to explore an equity capital raise," M&B said.

It added that it had not yet made a decision about the timing, size, or terms of the fund raising.

"With no sites trading, ongoing monthly cash burn is approximately £35m to £40m," it said.

On top of that it has to meet the next quarterly payment date for debt service of £50m on 15 March.

All pubs in England are now closed until late-February at the earliest under the latest lockdown.

"The future facing the hospitality sector remains extremely uncertain," M&B said.

M&B operates about 1,700 pubs across the UK, including brands such as All Bar One, Nicholson s and O Neill s.

The company said trading in the three months to 2 January, which included the November lockdown in England and the Christmas period, was 67% below 2019 s levels.

For the pubs that were able to trade, sales were 30% lower than the same period last year.

"There is a real and pressing need for support for businesses if we are to return to being the vibrant sector and important employers that we were," said chief executive Phil Urban.

"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."

The Financial Conduct Authority (FCA) said its survey of 23,000 firms found that at the end of October 17% of those with low financial resilience faced a greater risk of failure.

Around 30% of the firms, which were mainly small businesses, had the potential to cause harm if they went bust, the FCA warned.
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