Mitchells and Butlers announced it has furloughed 99% of its workforce in light of the ongoing coronavirus pandemic.
The announcement came as the leading operator of managed restaurants and pubs, including Harvester, Toby Carvery, All Bar One and Miller and Carter, announced a series of measures to reduce its cost base during the crisis.
In further efforts to shore up cash, basic pay for all employees, including the board, has also been reduced to between 60% and 80%, “dependent on seniority”.
Operating costs have also been reduced to the minimum required to “keep the estate secure, safe and in good condition”, whilst discretionary capital expenditure projects have been stopped.
The group also warned that the forced closure of its sites could amount to a “technical breach of secured financing arrangements”. In light of this, a temporary waiver until 15 May has now been granted to “avoid this pending further discussions”.
In its latest update, the group said: “Mitchells and Butlers is a strong business with a consistent record of clear sales outperformance against the market and an established strategy of strengthening the balance sheet by reducing net debt and gearing.
“Great uncertainty remains not only as to the extent of the current shutdown but also the profile of any reopening and recovery period back to normality.”
It added: “In light of this the group is in close contact with stakeholders, with whom it has strong relationships and who are supportive of the long-term fundamentals of the business.
“The group has material cash resources which we believe should be sufficient to fund obligations well into the second half of the year.”