Mitchells & Butlers plc
Coronavirus (COVID-19) Trading Update
Mitchells & Butlers provides a trading update in light of the unprecedented COVID-19 situation which is currently having a material impact across the sector.
For the first 24 weeks of the year, up to 14 March, like-for-like sales were 0.9%. Within this recent trading has been severely impacted by COVID-19 and the containment measures taken by the Government, including the recommendation to avoid pubs and restaurants which is now expected to lead to a further significant downturn in sales.
Given the rapidly evolving nature of the situation it is impossible to quantify the impact COVID-19 could have on our financial performance. However, we expect a significant reduction in our expected outturn for 2020 and, given this uncertainty, can no longer provide detailed guidance on the expected forward financial performance for the year.
We are working proactively to protect our trading and cash flow through a number of actions including suspension of the capital programme and reduction of costs across the business.
The group currently has a strong balance sheet with material cash resources which should be sufficient to fund obligations through the half year on 11 April 2020, and well into the second half. The next securitisation restricted payment and covenant test is at the half year. Sufficient headroom has been established such that we believe the group could suffer a significant loss in the remaining four weeks to the test date and still clear covenant levels. We are working hard to deliver a performance within these parameters and are encouraged by the measures announced last night by the Chancellor, notably business rates relief and access to a credit guarantee facility, which should further underpin our future performance and liquidity.