Owner of Edinburgh’s historic Sheep Heid Inn and All Bar One axes 1,300 jobs: reaction
All Bar One and Miller & Carter owner Mitchells & Butlers has laid bare the pain suffered through the pandemic after revealing that some 1,300 jobs have been lost across the group so far.
The pubs and restaurant giant outlined the extent of the recent redundancies as annual results showed it plunging to a £123 million loss from pre-tax profits of £177m the previous year.
The group, which has more than 1,700 pubs and brands including Harvester and Toby Carvery, said earlier this month that it was closing several pubs and restaurants and had started redundancy consultations with staff, but did not at the time disclose how many roles were at risk.
Unveiling its latest results, the firm told investors: “Despite our best efforts to protect as many jobs as we can, we have had to make circa 1,300 redundancies following the end of the financial period.
“The reduced levels of activity and closure of a small number of our sites meant that we could no longer support these roles.”
M&B, which also runs scores of well-known Scottish watering holes including Edinburgh’s historic Sheep Heid Inn, swung into the red after full-year revenues plunged 34 per cent to £1.5 billion. It said total sales since the end of September have plunged 50.8 per cent, due largely to the latest English lockdown and tighter restrictions elsewhere.
The group and the wider hospitality sector have been devastated by the pandemic and measures to control it, with a lengthy enforced closure earlier in the year and a 10pm curfew before the latest English lockdown. Restrictions under Scotland’s tiered system will also have heavily impacted trade.
Bosses said the outlook was dependent on government restrictions to contain the impact of coronavirus.
“The future will remain both challenging and highly uncertain with the duration and depth of the trading restrictions imposed on the hospitality sector in response to the Covid-19 pandemic being, in the first instance, the primary determinant of our financial performance,” the firm noted.
The group said its suburban brands have fared well, even with the restrictions, with Miller & Carter and Premium Country Pubs leading the way.
But its city centre drinks-led pubs, such as Nicholson’s, have taken the brunt of the crisis, as trading woes have been compounded by many offices remaining empty.
Chief executive Phil Urban said: “Throughout a very uncertain and challenging year our businesses and teams have adapted quickly, creating a safe environment for guests and putting us in a strong position to benefit when consumers are able to eat out again.
“We saw direct evidence of this from a strong trading period in July and August before further restrictions came into force.
“We remain optimistic that we will be able to regain the momentum previously built and continue to achieve sustained market outperformance when the current operating restrictions are eased,” he added.
At the end of September, the group insisted that it was “well placed” to cope with the UK and Scottish governments’ 10pm curfews under new restrictions to control a second wave of the virus.
Mark Lynch, partner at corporate finance house Oghma Partners, said: “The results from M&B and [pub and brewing firm Fuller, Smith & Turner] highlight the dramatic impact of Covid-19 with currently both businesses effectively shuttered and the majority of staff on furlough.
“However, despite the outlook for a bleak future, both businesses have been supported by the government furlough scheme and helped by largely having a freehold portfolio they are well positioned to come out of the pandemic in an enhanced competitive position and with lessons on efficiency that should ensure an improving performance.
“The question remains though whether demand from customers will return – the evidence of August and September is a resounding yes. Whilst the outlook is difficult, it now seems that better days lie ahead for those that survive this winter.”
Simon Emeny, chief executive of Fuller, Smith & Turner, said: “The imminent roll out of a vaccine is excellent news for the future. The tightening of the tier system will present further challenges over the winter months, but we welcome the Prime Minister's comments that we will see the need for restrictions fall away in the spring. Without doubt, a return to normality is in sight.
“When the current lockdown was announced, we acted swiftly to implement the lessons learned last time round and this latest closure has been made with minimal stock losses. We also immediately placed 98 per cent of our team members - across our pubs, hotels and in our support functions - on furlough or flexi-furlough, thereby minimising our cash burn.
“The extension of the Coronavirus Job Retention Scheme until March 2021 provides a degree of breathing space and will allow us to apply a sensible and measured approach to costs as we reopen our estate, particularly at the most affected sites in our city centres.
“We entered this crisis in a position of strength, buoyed by the sale of the Fuller's Beer Business. We have used the time and space created by the pandemic wisely - completing targeted investments in our estate, rightsizing our teams and utilising the support available to manage our cash reserves where possible.
“It has not been easy, but prudent financial management, an estate that is 92 per cent freehold, and a strong balance sheet mean that we will be in the best possible position to get back on a growth trajectory.”
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