Mitchells & Butlers plc (LON:MAB) has announced an operational update.
Operational Update
Since the UK Government announcement on 30 December 2020, which placed approximately 78 per cent. of the population of England in tier 4 (the most restrictive tier), none of the Group’s sites have been open. All of the Group’s German businesses were closed at the start of November 2020.
In the period from 27 September 2020 to 16 January 2021, total managed sales were 69.8 per cent. below the prior year. On a like-for-like basis (for sites when open, excluding periods of closure) trading was 30.1 per cent. down on the prior year across this period.
Cash and Balance Sheet
The Group had a cash balance of £113 million as at 16 January 2021 with all facilities drawn.
Agreement has been reached with the trustee of the Group’s pension funds to delay monthly contributions from January to March 2021, inclusive, with these becoming due in April 2021.
Taking this into account, since the start of the year, during which time the Group’s estate has been fully closed, cash burn was estimated to be between £30 million and £35 million per four-week period. In addition, the Group also has securitised debt servicing costs of £51 million per quarter (comprising interest and amortisation), and all non-essential capital expenditure continues to be suspended.
The next quarter payment date for debt service is 15 March 2021.
Open Offer
Following the announcement made by Mitchells & Butlers on 15 February 2021, regarding its intention to raise £350 million by way of an underwritten fully pre-emptive open offer, the Board has separately announced today the launch of the Open Offer.
Details of the Open Offer can be found in the Open Offer announcement and further information can be found in the combined prospectus and circular produced by Mitchells & Butlers in connection with the Open Offer which is expected to be published at www.mbplc.com/investors/capitalraise later today.
The Board, which includes representatives of the Odyzean Group (a major shareholder of Mitchells & Butlers), believes that the Open Offer is critical for the continued operation and financial stability of the Group, for managing the business through the current pandemic and, ultimately, to deliver long-term, sustainable growth to Mitchells & Butlers’ shareholders.
Phil Urban, CEO of Mitchells & Butlers said,
“M&B was a high performing business coming into the pandemic and with the support of our main stakeholders, including the equity injection from this Open Offer, we have every confidence that we can emerge in a strong competitive position once current restrictions are lifted.
The hospitality industry has done everything that has been asked of it to date and, now that the vaccines are being rolled out and infections are dropping, we are hopeful that pubs and restaurants will soon be allowed to reopen safely so that we can start to serve our customers again”
