Pubco scrambles for cash as third lockdown bites

Pubco Mitchells & Butler (M&B) has said it will embark on an equity raise after admitting the future of the hospitality sector remains “extremely uncertain”.

The Birmingham company says it is currently burning through up to £40m of cash a month and only has £125m of cash in the bank, and that it is “not possible to estimate with any confidence what restrictions on our ability to trade lie ahead of us and for how long”.

M&B hasn’t disclosed how much it aims to raise from the share issue, or when it will be, but has described the move as “prudent” and that it will give the firm “increased financial and operational flexibility”.

It comes as the company reveals sales collapsed by over 67% for the 14 weeks to January 2.

Phil Urban, chief executive, said: “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.”