Mitchells & Butlers posts loss but says it will recover

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Mitchells & Butlers PLC (LON:MAB), the All Bar One and Miller & Carter owner, fell into a loss in the year to 26 September as it bore the brunt of the COVID-19 lockdown.

At one point, 99% of its employees were on furlough said the FTSE 250 group, which added its accounts had been prepared on a going concern basis.

Mitchells laid off 1,300 staff during the period and alongside other cost-cutting measures, this has reduced the monthly cash burn to £35mln to £40mln before debt costs of £50mln per quarter.

As at 25 November, the group said it had cash balances of £125mln and total liquidity of £225mln. 

A second lockdown began in England on 5 November requiring the closure of all pubs and restaurants.  

Like-for-like sales since September 26 have declined by 26.5%, MAB said, reflecting the new restrictions with total sales over the same period down by 50.8%.  

Mitchells added that with an estate of largely freehold assets it would recover once trading restrictions ease. 

Phil Urban, chief executive, added: “Throughout a very uncertain and challenging year our businesses and teams have adapted quickly, creating a safe environment for guests and putting us in a strong position to benefit when consumers are able to eat out again.

“We saw direct evidence of this from a strong trading period in July and August before further restrictions came into force.”

Losses for the year to September 26, 2020 were £123mln compared to a profit of £177mln twelve months earlier. Revenues fell 34% to £1.48bn.

Like-for-like sales declined by 3.5% over the financial period, with sales growth of 0.9% before closure more than offset by the impact of the subsequent lockdown.

Eat Out to Help Out meant food performed better than drink and Mitchells said it had received £30mln from the Government through the scheme.

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