Money News

UK pub operators cut jobs as swing to losses on lockdowns

(Reuters) - British pub operators Mitchells & Butlers and Fuller, Smith & Turner said on Thursday they had cut around 1,650 jobs and suffered millions in financial losses as the hospitality industry reels from new lockdowns.

Customers are seen at a table outside The Island Queen pub, which is run by Mitchells & Butlers, amid the outbreak of the coronavirus disease (COVID-19) in Islington, London, Britain, September 24, 2020. REUTERS/Simon Newman/Files

The British Beer & Pub Association (BBPA) has warned of thousands, if not tens of thousands, of job losses if the government does not give pubs more freedom or grants to help them cover fixed costs in order to survive winter.

M&B, which owns All Bar One, Harvester and Browns, said it had cut 1,300 jobs. Smaller rival Fuller’s said its total number of employees had been reduced by 20% following about 350 job cuts, the sale of its pizza chain The Stable and through natural attrition.

The companies said they have enough resources to operate in the foreseeable future, but the downside scenarios cast doubts about their ability to continue as going concerns.

“We are optimistic about the future in the medium term and beyond, but there is no doubt that this will be a tough winter,” Fuller’s CEO Simon Emeny said.

Shares in M&B, which have lost around 50% of their value so far this year, fell 3.8% and Fuller’s was down 2.3% at 1156 GMT.

Others in the industry have already reduced their workforce, with Marston’s planning to cut 2,150 jobs and cheap beer specialist J D Wetherspoon has cut staff at its head office and airport pubs.

Pubs, restaurants and hotels have been among the hardest hit by the COVID-19 pandemic, with social distancing measures and curfews hitting capacity even when establishments have not been forced to shut altogether by lockdowns.

The current lockdown in England started on Nov. 5 and is set to end on Dec. 2, but tough restrictions are expected to continue in many areas, and pubs and restaurants in the toughest third tier will only be allowed to reopen for takeaways.

“The government must do more to help our pubs, the livelihoods they support,” BBPA’s Chief Executive Emma McClarkin said on Wednesday. “If not, this really could be the end of the pub in Britain as we know it.”

M&B reported an adjusted pretax loss of 32 million pounds ($43 million) for the year ended Sept. 26 and Fuller’s a first-half loss of 22.2 million pounds.

With 1.56 billion pounds in net debt as of Sept. 26, M&B in June had agreed to revised financing arrangements with its main creditors to bolster its available reserves after avoiding a debt default in April.

M&B employs about 44,000 people, according to its website, in 1,700 pubs across Britain, while Fuller’s employed 4,957 people in over 200 pubs, its latest annual report showed.

($1 = 0.7472 pounds)

Reporting by Yadarisa Shabong and Aakash Jagadeesh Babu in Bengaluru; Editing by Vinay Dwivedi, Patrick Graham and Emelia Sithole-Matarise