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Two of Britain’s biggest pub operators on Wednesday reported bigger half-yearly losses, as the COVID-19 pandemic and related lockdowns forced the temporary closure of their estates.
But both Mitchells & Butlers and Marston’s said they were confident profits will rebound, as the gradual easing of COVID-19 restrictions encourages more people to return to their venues after months of being stuck at home.
Mitchells & Butlers
MBPFF,
MAB,
shares fell 1.87% in early European trading on Wednesday, while Marston’s
MARZF,
MARS,
stock was down 1.71%.
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Pubs and restaurants in England opened for outside dining and drinking in April, but they have only been able to serve customers indoors since May 17, when the country entered the third stage of Prime Minister Boris Johnson’s “road map” out of lockdown.
Mitchells & Butlers, the U.K.’s largest listed pub group, which operates 1,700 pubs across the U.K., including the Harvester and All Bar One brands, posted pretax losses of £200 million ($283 million) for the six months to April 10, compared with a loss of £121 million for the same period a year ago. Revenue dropped 79% to £219 million from £1.04 billion a year earlier.
The pub group, which traded under restrictions for 14 weeks, said that almost all of its outlets had now reopened, with outdoor sales in the five weeks since April 12 running at about 30.1% below total pre-pandemic levels.
“M&B was a high performing business coming into the pandemic. With the support of our main stakeholders, we are now well placed to emerge in a strong competitive position,” said Chief Executive Phil Urban in a statement.
Its rival, Marston’s, also said early signs from the reopening of its 1,500-strong estate on May 17 were encouraging, with sales running at 77% of pre-COVID levels. Around 90% of the company’s pubs have gardens or outside trading areas, allowing them to open to serve outdoor customers on April 12.
“Whilst still early days, trading has been encouraging since we were permitted to open our doors for outdoor trading last month,” said Marston’s Chief Executive Ralph Findlay. “We look forward to all trading restrictions being removed next month, which signals a return to some semblance of normality,” he added.
Marston’s optimistic outlook came as the group slumped to a £105.5 million pretax loss in the 26 weeks to April 3, compared with £31 million a year earlier, while revenues fell to £55.1 million from £343.3 million.
Read: U.K. excitement over reopening clouded by worries over Indian variant
Adam Vettese, analyst at investment platform eToro, said Marston’s shares have performed “phenomenally” during the pandemic, rising 183% in the past year, despite its pubs being forced to shut for most of the past 14 months.
“With pubs now allowed to be open indoors, and with the delayed Euro 2020 football championships around the corner, we’re expecting a strong trading period over the coming months as punters return to their favorite watering holes. Therefore, we expect Marston’s next set of financials to be much more pleasing to shareholders,” Vettese said.
