Two major British pub groups on Wednesday warned that the government’s ban on socialising will have a big impact on profits this year.
Brewer and pub-owner Marston’s (MARS.L) and pub group Mitchells & Butlers (MAB.L) both put out profit warnings in light of new measures introduced in recent days to fight the spread of novel coronavirus.
The government on Monday significantly ramped up measures to fight the spread of novel coronavirus, including encouraging people not to go to pubs or restaurants.
Marston’s, which owns 1,400 pubs across the UK, said on Wednesday it was “unable to quantify the impact of Covid-19 on our financial and trading performance at this stage” but expected a slide in earnings.
“The scale of this will depend upon how the situation develops and over what timescale, and the impact of further measures taken by the government,” the company said in a statement.
Mitchells & Butlers said trade at its 1,700 pubs and restaurants had been “severely impacted by Covid-19 and the containment measures taken by the government.” Mitchells & Butlers also said it was difficult to quantify how bad the damage would be and couldn’t give investors any guidance.
Mitchells & Butlers owns chains like Toby Carvery and Harvesters, as well as All Bar One and pub chains Nicholson’s, O’Neill’s, and Vintage Inns.
Both Mitchells & Butlers and Marston’s said they were holding on to cash and cut costs in light of the challenges. Both companies also welcome the package of support for businesses announced by the government on Tuesday night.
Shares in Marston’s jumped 25%, having sold-off sharply over the last few days. The stock is still roughly at half the price it was trading at last Friday.
Mitchells & Butlers’ stock has seen a similar sell-off but was up only 2.4% on Wednesday.