Toby Carvery owner Mitchells & Butlers explores equity raise due to third lockdown
Mitchells & Butlers, which owns Toby Carvery, All Bar One and Nicholson’s, is exploring a potential equity raise due to the potential for further disruption caused by the coronavirus pandemic.
The pub chain, which last year axed 1,300 jobs due to the pandemic, said it is not possible to estimate the impact of further Covid-19 restrictions on its ability to trade, and for how long.
M&B has cash balances of £125m, with all facilities drawn, and a monthly cash burn of £35m to £40m before payment of debt service of £50m per quarter.
“As a result, the directors believe it is prudent to explore an equity capital raise, to give the group increased financial and operational flexibility,” M&B said in a statement this morning.
“No decision has yet been made with regards to the timing, size, or terms of any such equity capital raise.”
The FTSE 250 firm, which also owns Harvester, O’Neill’s and Miller & Carter, suffered a 67.1 per cent drop in sales in the first quarter of the year due to the impact of closures and restrictions.
On a like-for-like basis, discounting pubs that were closed during the period, trading was down 30.1 per cent.
“Over the period, progressively tighter restrictions were imposed through December both across the UK and in Germany resulting in an ever smaller number of sites open and significantly reduced sales activity being possible through the important festive trading season.”
M&B chief executive Phil Urban called for more help for businesses facing strict restrictions.
“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,” he said.
“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.”