Owner of Scotland's oldest pub cautious over industry reopening push
The group, which has more than 1,700 pubs and brands including Harvester and Toby Carvery, tumbled into the red for the six-month period to 11 April after reporting profits of £75m a year earlier.
Revenues dipped to £1.04 billion from £1.2bn, with the first half including nearly four weeks of enforced lockdown closure.
M&B, which also runs scores of well-known Scottish watering holes including Edinburgh’s historic Sheep Heid Inn, frequently cited as Scotland’s oldest continuously running pub, booked £159m in charges. It said that this was mostly as a direct result of the coronavirus crisis.
The group plans to reopen all its brands in England from Saturday when lockdown restrictions ease for the sector, though some sites will remain closed initially. It said those in Wales and Scotland should follow over the next two weeks. Those not opening initially are likely to be in city centres and travel hubs, where fewer customers are expected, but the company aims to have 90 per cent of sites reopened by the end of July with the others to follow when trading conditions allow.
But it warned of the risk that customers may “have a different mindset to eating out, with health and safety at the forefront of priorities”.
“Equally, some consumers may not heed the measures put in place to restrict the spread of the virus, potentially putting our team members and other guests at risk,” it told investors.
The group said that before the UK was placed in lockdown, the business was performing “very well”, with like-for-like sales up 0.9 per cent. Comparable sales lifted 2.6 per cent in the first 14 weeks of the first half.
Chief executive Phil Urban said: “The business was performing very well before the enforced closure in response to Covid-19, building on the strengths of our estate of mainly freehold properties, our diversified and well-loved brands and our team’s industry-leading operational skills.
“These assets, coupled with our early experience of reopening in Germany, give us a clear plan for reopening.”
On physical distancing measures, M&B noted: “We support the need for social distancing measures to reduce the spread of Covid-19.
“While social distancing measures are in place the capacity of our businesses will be reduced, impacting the offer to our guests and the financial model of our operations. Given the unknown nature of the virus the duration of distancing measures is uncertain.”
The group reopened its Alex business in Germany through mid to late May, which has given it a blueprint for opening in the UK.
It noted that in Germany, city centre sites have been the slowest to recover, but that some suburban businesses have seen days of year-on-year growth.
Anna Barnfather, an analyst at Liberum, said: “M&B’s interim results show a strong operational performance prior to lockdown and highlight how well positioned the business is to recover strongly on reopening.”
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