UK pub operators report losses, job cuts as lockdown pain builds
British pub operators Mitchells & Butlers and Fuller, Smith & Turner posted millions in financial losses on Thursday and said they had cut around 2,000 jobs as the hospitality industry reels from the past month’s re-tightening of Covid-19 restrictions.
The larger of the two, M&B, which owns All Bar One, Harvester and Browns, said it had cut 1,300 jobs. Fuller’s said its total number of employees had been reduced by 20%, translating to around 990 job losses.
The companies said they have enough resources to operate in the foreseeable future, but the downside scenarios cast doubts about their ability to continue as going concerns.
“We are optimistic about the future in the medium term and beyond, but there is no doubt that this will be a tough winter,” Fuller’s CEO Simon Emeny said.
Others in the industry have already reduced their workforce, with Marston’s planning to cut 2,150 jobs and cheap beer specialist J D Wetherspoon has cut staff at its head office and airport pubs.
Pubs, restaurants and hotels have been among the hardest hit by the Covid-19 pandemic, with social distancing measures and curfews hitting capacity even when establishments have not been forced to shut altogether by lockdowns.
The current lockdown in England started on Nov. 5 and is set to end on Dec. 2, but tough restrictions are expected to continue in many areas, and pubs and restaurants in the toughest third tier will only be allowed to reopen for takeaways.
M&B reported an adjusted pretax loss of 32 million pounds ($43 million) for the year ended Sept. 26 and Fuller’s a first-half loss of 22.2 million pounds.
With 1.56 billion pounds in net debt as of Sept. 26, M&B in June had agreed to revised financing arrangements with its main creditors to bolster its available reserves after avoiding a debt default in April.
Fuller’s, on the other hand, said it was confident it could secure revisions in its debt covenants beyond December and get credit lines beyond August.
Shares in the London-listed companies were flat in morning trade, and M&B is on course to lose around 50% of its market value and Fuller’s 24% this year.
M&B employs about 44,000 people in 1,700 pubs across the United Kingdom, while Fuller’s employed 4,957 according to its latest annual report.
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