Yahoo Finance All Bar One-owner's stock crashes as it looks to raise cash amid COVID-19 losses
All Bar One-owner Mitchells & Butlers plc (MAB.L) has seen shares fall dramatically on Thursday as the company said it needed to raise cash to stay afloat amid tighter COVID-19 restrictions that have shut its sites in Germany and the UK.
Shares (MAB.L) were down 7% at around 11.15am in London.
The business said it was examining an equity capital raise, which would see it raise money through the sale of shares. The board has been been “unanimous in its support for these actions being taken,” it said.
The pub and restaurant operator has already cut 1,300 jobs as it tries to stem the operating losses it faces in the midst of successive lockdowns and rising COVID-19 case numbers. The UK is in its third lockdown, with cases reaching another record high on Wednesday, over 62,000, in addition to more than 1,000 daily deaths for the first time since April. Germany has also extended its restrictions in the face of rising cases.
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Mitchells & Butlers plc (MAB.L) joins a chorus of others in the hospitality sector who have been struggling over the losses accrued from COVID-19.
In Thursday’s trading update, the company urged the government to "better understand" the huge impact the latest lockdown restrictions were having. It said it had a monthly cash burn of £35m-£40m ($48m-$55m) before a £50m debt service payment per quarter and the support on offer was clearly inadequate.
Earlier this week, the UK government announced it was committing £4.6bn in new lockdown grants to support businesses and protect jobs. This includes one-off top up grants for retail, hospitality and leisure businesses worth up to £9,000 per property to help businesses through to the Spring.
The cash is expected to benefit over 600,000 business properties, worth £4bn in total across all nations of the UK.
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