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Shares of Mitchells & Butlers plc (LON: MAB) plunged 11.6% after the pub chain reported that for the 14 weeks to January 2 (Q1), total sales were down over 67% due to the impact of coronavirus lockdown measures in the UK and Germany.
The company further said that its industry's prospects remain extremely uncertain given the latest restrictions imposed in the UK and that it was hard to estimate the impact of the restrictions on its future trading activities.
The pub and restaurants operator noted that it would be prudent to explore a capital raise soon, giving it financial and operational flexibility in the current environment, but was yet to decide if and when to pursue this option.
Phil Urban, Mitchells & Butlers CEO, said: “We are now in a third national lockdown. I am consistently impressed by the resilience and energy of our teams as we repeatedly open and close businesses that we have invested in to make Covid secure and urge the government to better understand the huge impact these restrictions are having on the hospitality sector.”
“The Job Retention Scheme is temporarily protecting some employment, but there is a real and pressing need for support for businesses themselves if we are to return to being the vibrant sector and important employers that we were.”
The pub chain was downgraded to an “add” from a ‘buy’ by analysts at Peel Hunt who also slashed their price target for the stock to 275p from 300p, citing the stock's likelihood underperforming until a capital raise is completed, and a lengthier recovery period.
Mitchells & Butlers shares plunged 11.57% to trade at 210p having dropped from Wednesday’s closing price of 237.5p.
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