The pub and restaurant group Mitchells & Butlers has temporarily suspended payments to its staff pension fund and is pressing ahead with £350m emergency fundraising to see it through the Covid crisis.
The All Bar One owner, which also runs pub chains including O’Neill’s and restaurant brands such as Harvester, usually pays £4.2m a month into its pension fund. It has agreed to delay payments for at least three months, with plans to restart contributions in April.
The suspension is intended to improve its store of cash as the group revealed it only had £113m left. M&B said it had been burning through £30m-£35m every four weeks since the start of the year and had already drawn on all its lending facilities.
All of the group’s 1,600 pubs and restaurants have been closed since 30 December because of the Covid lockdown. Sales were down 70% between September and January, a period in which Covid rules were tightened after a brief respite over the summer.
M&B, which also runs Toby Carvery and Miller & Carter, confirmed plans to tap investors for up to £350m by issuing new shares.
The group said its cash positions had “deteriorated significantly” during the pandemic and the fundraising was “critical for the continued operation of the group and its immediate financial stability”. The extra cash will be used to pay off some of its debt and invest in its pubs and restaurants to help it stay competitive as Covid restrictions are eased.
Pubs and restaurants could start serving customers outdoors by late April, as part of lockdown easing measures that will be outlined by Boris Johnson on Monday afternoon.
Phil Urban, the chief executive 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.”
Shares were down more than 1% on Monday morning at 319p.