26th Nov 2020 10:09
(Alliance News) - Mitchells & Butlers PLC on Thursday said it swung to an annual loss despite seeing strong operational performance once restaurants reopened in July.
The Birmingham-based restaurant and pubs operator swung to a pretax loss of GBP123 million in the financial year that ended September 26 from a GBP177 million profit the year before.
Mitchells & Butlers's revenue decreased 34% to GBP1.48 billion from GBP2.24 billion in 2019. The company said that the drop in revenue reflected the periods of closure for lockdowns amid the Covid-19 pandemic and that GBP30 million of the total revenue was received from the UK government as part of its Eat Out to Help Out scheme in August.
Like-for-like sales were down 3.5% in the year as a whole, having been up 0.9% before the Covid-19 struck and also up 1.4% during August. For the full year, food like-for-like sales were up 0.3% but those for drink were down 7.3%.
Looking ahead, Mitchells & Butlers said that the future will remain both challenging and uncertain but that its businesses and teams adapted quickly to continue to create a safe environment for guests, which put the company in a strong position to benefit once dining out becomes an option again.
Chief Executive Phil Urban said: "We saw direct evidence of this from a strong trading period in July and August before further restrictions came into force. With our great estate, balanced portfolio of brands and proven management team, we remain optimistic that we will be able to regain the momentum previously built and continue to achieve sustained market outperformance, when the current operating restrictions are eased."
Mitchells & Butlers said has received much needed financial flexibility from its creditors and has agreed in return not to pay a dividend, conduct share buy-backs or repurchase bond debt until the end of the financial year in September 2021, at the earliest. Net debt stood at GBP2.10 billion on September 26, including GBP541 million in lease liabilities, flat on a year before.
Shares in Mitchells & Butlers were down 1.1% at 221.00 pence in London on Thursday.
By Zoe Wickens; [email protected]
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