Mitchells & Butlers warns on profits after govt Covid-19 advice

The company on Wednesday said recent trading had been severely impacted and expected a “significant reduction”, adding that it could “no longer provide detailed guidance on the expected forward financial performance for the year”.

“Given the rapidly evolving nature of the situation it is impossible to quantify the impact Covid-19 could have on our financial performance.”

The government's advice sent shares in the sector into freefall on Monday and Finance Minister Rishi Sunak was forced a day later to introduce a £330bn loan scheme and business rate holiday for businesses hit by the spread of the virus.

Mitchells said it currently had a strong balance sheet with material cash resources which should be sufficient to fund obligations through the half year on April11 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,” it said.

“We are working hard to deliver a performance within these parameters and are encouraged by the measures announced last night by the (government) , notably business rates relief and access to a credit guarantee facility, which should further underpin our future performance and liquidity.”