Mitchells & Butlers to raise equity as lockdown burns cash

The pub company said it had cash of £125m with all debt facilities used up and that it was eating up £35m to £40m of cash a month before debt costs of £50m a quarter. The next debt service payment is due on 15 March.

The owner of All Bar One and Toby Carvery said it had not decided on the timing, size or terms of the proposed cash call. The FTSE 250 group's shares fell 10.4% to 212.7p at 08:13 GMT.

Pubs were ordered to close across the UK on Monday and the government has said severe restrictions could be in place for several months to stem surging levels of Covid-19 infections.

M&B said: "It is not possible to estimate with any confidence what restrictions on our ability to trade lie ahead of us and for how long. As a result, the directors believe it is prudent to explore an equity capital raise, to give the group increased financial and operational flexibility."

Sales fell 67% in the 14 weeks to 2 January from a year earlier and excluding periods of closure sales were down 30%, M&B said.