The company behind All Bar One and Harvester pubs is exploring how it can raise further cash as the coronavirus crisis continues to take its toll on hospitality businesses.
Mitchells & Butlers (M&B) said it was examining an equity capital raise – seeking money through the sale of shares – following unanimous support for the move by its board but added that it had taken no decisions yet.
The pub and restaurant operator, which also counts Toby Carvery among its brands, has already cut 1,300 jobs as part of its response to the COVID-19 curbs imposed on the sector during the crisis to date.
The company used a trading update on Thursday to urge the government to “better understand” the huge impact the latest lockdown restrictions were having.
The chancellor confirmed on Tuesday that retail, hospitality and leisure sites will receive up to £9,000 in one-off grants to help them through.
But M&B pointed out that it had a monthly cash burn of £35m-£40m before a £50m debt service payment per quarter and the support on offer was clearly inadequate.
Chief executive, Phil Urban, said: “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.”
Group sales plunged 67.1% during the 14 weeks to 2 January.
Shares fell 8% in response to the update.
Hospitality companies forced to shut their doors to drinkers and diners have been among those offering to support the roll-out of the UK’s vaccination programme.
They hope that through the use of their premises to provide jabs, immunity will build up to the extent normal business activity can resume.
Kate Nicholls, chief executive of industry group UKHospitality, said of the government’s grant: “While this announcement is most welcome, make no mistake that this is only a sticking plaster for immediate ills – it is not enough to even cover
the costs of many businesses and certainly will not underpin longer-term business viability for our sector.”