26 Nov Locked down pubs cost 1,300 jobs at Mitchells & Butlers
Another 1,300 pub sector job cuts were announced today as Mitchells & Butlers became the latest operator to respond to the coronavirus crisis.
M&B, which owns brands including All Bar One and Harvester, said it had made 1,300 workers redundant and closed a small number of sites owing to reduced trade.
It said that the cuts had come “despite our best efforts to protect as many jobs as we can”, and represented only 3 per cent of its total workforce of 43,000.
News of the cuts came as Fuller, Smith & Turner confirmed its previously announced decision to cut about 350 jobs, although it said it had managed to redeploy about 250 workers whose jobs were at risk of redundancy. Most of the big pub groups have laid off staff: Greene King cutting 800 jobs, Marston’s cutting 2,150 and JD Wetherspoon losing about 550.
The M&B job cuts came as the company reported a 34.1 per cent fall in revenues to £1.48 billion in the year to September 26, with operating profits diving from £297 million to £8 million. At a pre-tax level, it swung from a profit of £177 million to a loss of £123 million.
Like-for-like sales fell by 3.5 per cent after a strong start to the year was followed by the first lockdown, although the group said that its performance was still ahead of the wider market. Since the year-end, like-for-like sales are dwon 26.5 per cent reflecting the tougher restrictions, with total sales down 50.8 per cent owing to the latest lockdown.
M&B, created in 2003 through a demerger from the old Bass brewing empire, has 1,650 venues under such brands as Miller & Carter and Ember Inns as well as about 50 tenancies and 44 German sites. Until the lockdown its estate was being “remodelled” at the rate of about 250 outlets a year.
Phil Urban, 57, the chief executive, said he was still hopeful of a strong Christmas, despite a 70 per cent reduction in capacity and the absence of big parties, and said he “would be disappointed if we didn’t fill up” on Christmas Day itself.
He said that despite the continuing uncertainty surrounding Covid-19 he remained confident that, with a viable vaccine, the business would “bounce back very quickly” after next spring.
M&B is one of the few quoted hospitality groups not to raise new equity and analysts expressed some concern at M&B’s level of liquidity, which stands at £225 million. James Wheatcroft, at Jefferies, said liquidity was “tight but sufficient assuming no more than three months of closure before June 2021”.
Mr Urban said that if vaccine development progressed as well as it has so far the company would have no need for an equity raise.
Separately, Fuller’s reported a swing from a pre-tax profit of £17.9 million to an adjusted loss of £22.2 million in the half-year to September 26, from revenues down from £167.1 million to £45.6 million.
The group sold its brewing business at the start of this year and now has 212 managed pubs and hotels and 176 tenanted pubs.
Simon Emeny, the Fuller’s chief executive, there was “no doubt that this will be a tough winter and a very different-looking Christmas” but the news on vaccines “gives us confidence where previously there was uncertainty”.