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Tue 14th Apr 2020 - Insight special: Mark Wingett’s inside story on the work to save the sector

When you walk through the storm

The last month will prove to be one of, if not the, most important periods for the UK’s hospitality sector, and its future. As we gear up to face further challenges over the coming months, Mark Wingett looks back at the last four weeks, and with the help of some of the main participants, gives an insight into the key battles, the personalities involved, the frustrations, the role of government and where we go from here.

WhatsApp groups, war rooms, furloughing, moratoriums and waiting for Rishi. The last month will be one the UK’s hospitality sector will be extremely keen to forget. It will be a period that will push many businesses to the brink. But it has also seen some of the framework that should hopefully allow many more to come out the other side, to take part in and mould, what will be, a different eating and drinking-out landscape. From the time the prime minister Boris Johnson told the public to avoid pubs, restaurants, bars, coffee shops and nightclubs, the sector, led by UK Hospitality’s chief executive Kate Nicholls, has been fighting a rear-guard action to make sure, as Jonathan Downey (JD) would put it, as many people were “in the boat” in order to get through these choppiest of waters. Out of necessity, the industry has come together like never before, many rising to challenges they never envisaged they would ever have to face.

If, and it is a big if, there is a silver lining, it is that the government now belatedly understands the size and importance of the sector. The impact of the coronavirus has provided them a very real and graphic example of how important our sector is to daily life, to our social and cultural identity and also economically. As the tireless Nicholls put it, there has been an “overdue realisation of the fact that restaurant and pub teams play a vital role in keeping key workers fed and essential services functioning”. She says: “The workers that were once dismissed as low skill and low value are now rightly recognised as heroes and vital to the country’s success.” They finally realised that “hospitality was too big to fail”. But as Nicholls knows better than most, they needed some prompting.

If for many, the realisation of what the impact of covid-19 would have on the country and the sector, only came into full focus in March, and remember sales were falling dramatically before the PM’s avoidance call, Nicholls had been engaging with the government since around mid-January, when the reports coming out of China were emerging of a new disease and the lockdown of Wuhan. She says: “It was clear then that this was going to have a major impact on tourism in the UK – around 18% of the market is Chinese and South East Asian – as we cancelled all direct flights and the first travel restrictions came to the fore. There was a big step in activity around 25/28 January when China confirmed that they had been unable to isolate the virus in Wuhan and that it had spread to other major cities – then apparent that this would have a global impact and that the disease would spread to other markets and countries. It was then we started seriously talking to government about what support the industry might need and what steps we might need to take even if we had no cases in the UK. There is a Tourism Emergency Group which is convened when we have major incidents disrupting the sector, for example terrorism attacks, and it had also had a role in pandemics previously and disruptions like foot and mouth.”

Into early February, the effect travel restrictions were already having on business were being seen and Nicholls began sounding the alarm “loud and clear in the press and with government and really lobbying hard about the effect this was going to have”. London hotels saw occupancy slump from 80% to 30% in February, whilst during school half-term holidays, museums and attractions in parts of London saw 60% fall in footfall, which was translating to a 20-30% drop in footfall and revenue for restaurants and bars. Nicholls continues: “After the February half-term the slide became ever more marked as we watched more countries fall into restrictions, controls and we switched all of our Budget work away from the normal measures to solely focus on what we needed to support the sector in the event of covid-19 impacting on global markets, ie without the UK being affected as there was still a thought we could restrict and contain. Then the worst happened with the return of skiers from Italy and the shift in the global centre of the crisis to Europe.” Nicholls had the first major meeting with ministers on 16 February to work on the package needed. And from there it was weekly and twice weekly meetings right up until the Budget. She says: “By early March we were having regular slots on national media tracking footfall, revenue drops and the impact on the sector and feeding that in real time. The impact started to bite in London as people worked increasingly from home in advance of government measures and it was really clear that even if cases didn’t escalate as they had in Italy, we were going to face a steep, sharp consumer downturn in demand and the sector would be technically in recession for Q2.”

As Nicholls points out it was “canary in coal mine stuff”, but even then, not every organisation was focusing on the growing threat. She says: “There was a breakfast with the chancellor a week before the Budget when the discussion round the table of eight business organisations was still mainly about tax, incentives, and encouraging entrepreneurship. I was the only one talking about what the UK economy would need in the event of covid-19 and the measures we at hospitality needed.” Nicholls is right, if you look back at twitter and media at the time of the Budget on 11 March (amazingly only just over a month ago) you can see how everyone else was looking the wrong way, talking about the other things, celebrating a freeze in duty – totally unprepared for what was about to hit. Nicholls says: “Thankfully those hard yards in January and February when many wondered what on earth we were doing and why we were wasting time talking and considering the issue when we had more pressing concerns like immigration and Brexit came into their own when the first signs of social distancing policy shift came about from government. We were already well placed having already discussed the measure that would be needed to save businesses, inject liquidity and protect jobs. That blueprint and set of proposals had been submitted 8 March and we went into overdrive after the Budget to say not enough, more needed.”

So that hard work, which started in January, accelerated in February and by March was almost exclusively the sole topic of debate. Nicholls says: “We had 12-hour days lobbying solely on this and then it upped to 18 hours with back to back media from 10-15 March and went into overdrive once the rest of the sector caught up when Boris Johnson came on TV and said on 16 March, I recommend you stay away from pubs and restaurants.” For Nicholls one of the big frustrations was getting people to realise the threat coming down the tracks and the need for really big action to tackle it. She says: “I only think it really registered with most people how big an issue it would become on 16 March. It now seems quite ironic that I had some members really questioning what I was doing wasting my time looking at coronavirus for in January and February, and why we were spending any time on comms and working with government on it.” It is now an understatement to say that it is probably a good job Nicholls did. Others were set to follow her lead.

Brains trust
I imagine Jonathan Downey, chief executive of London Union, had a frustrating previous 12 months, plans to expand the business further in the capital, Manchester and internationally remained, but he was determined to not pay over the odds on sites, whilst the food hall/street food market boom went on around a man, who could claim to have started the sub sector. Crowned the Disruptor of the Year at last November’s Peach Icon Awards, Downey was itching to continue to live up to that billing, but I imagine not in the role he finds himself in now. Whilst Nicholls has the ear of government and is a brilliant lobbyist, Downey it is fair to say has initiated and driven much of the strategy the sector has rallied behind, from established chief executives to independent, single-site operators. Downey had initially started sharing links/thoughts with the 20 or 30 people, he was closest to in the sector, as the realisation of what sort of impact the coronavirus would have on the industry increasingly came into focus. By the morning of 16 March, this had become a WhatsApp group on which he could more easily put down “all my thoughts and ideas on what was happening in the sector, and made it broadcast only, so I could share what I was seeing and what has been sent to me. People could take or leave it”. Most have taken it, with said group expanded to over 2,000 people – operators, suppliers, investors, plus trade and national media. Downey now found himself, whether he wanted to be or not, a rallying point for the sector. The former restructuring lawyer says: “One of things I think I am good at is having an objective overview of a situation and the likely way things are going to pan out. That comes from my legal background when you sit down at the start of a transaction and you think how do we get to the end, what’s the best way, who are we going to need along the way, what support will we need. That Monday I set up the group was pretty timely as it was the day that Boris Johnson announced people should avoid pubs, restaurants etc, which absolutely killed our industry.”

By the next morning, Downey had written a list of six points he believed the industry would need from the government, to be able to survive and have a possible future. These were in Downey’s words, “a government backed loan scheme; something to protect jobs; something on business rates; we needed something in rents, a forfeiture; something on VAT and PAYE postponement; and a general debt enforcement moratorium, so we are not just passing the problem on to landlords”. He says: “Get them and then we can figure this all out together. We have managed to get five of those and we believe the sixth, the debt moratorium, is on its way.”

Downey’s rallying point brought others to the table. Tortilla founder Brandon Stephens says: “It was seeing JD setup his ‘rallying cry’ channel and just thinking some friends and colleagues would probably benefit from being able to share information together in an open forum. JD was showing the way forward; operators needed to be able to compare notes on actions, ask questions, and know we were all in it together. We later merged the group into Ann Elliott’s Hartwell WhatsApp forum to form a group of 150 chief executives/non-executive directors. I think everyone took great comfort in ‘seeing all our colleagues’ in one place. A lot of the operators were smaller businesses without finance directors, and not on as many distribution lists as you end up being on after a while in the industry, so they weren’t receiving as much information as we do at slightly larger businesses. I did my best to post what was coming through, providing some interpretations, and make suggestions, as did everyone, especially Charlie McVeigh.”

McVeigh, the Draft House founder and The Breakfast Club chairman, says: “I felt the need to do something as soon as the penny dropped – in mid-March – that already millions of workers in retail and hospitality were going to lose their jobs. Obviously, there was an element of selfishness, I was struggling to see how anyone, including my investees, was going to survive this. Also, I knew that the government would wake up and want to help – after all no prime minister – even one with an 80-seat majority – can survive millions of new unemployed and a Great Depression. But I felt strongly that they needed to have explained to them HOW to help.”

The issue now was getting behind one message/strategy. Fleet Street Communications managing director and ex-sector journalist Mark Stretton, who works with UKHospitality, says: “The prevailing mood shifted very quickly from thinking that a shutdown might not happen, which seems really strange now – and like it was a lifetime ago – to the very real perilous prospect of a prolonged period of zero sales, and the cataclysmic impact that would have on everything, but also the absolute and unquestionable unknown of the real extent of that impact, and what that would mean for the industry, for businesses and for jobs. This gaping chasm of uncertainty just opened up. As a hospitality industry, we literally moved to a war footing overnight. As I’m sure you’ve captured there were lots of people talking to each other, groups springing up and amid the crisis lots of collaboration.”

Although various WhatsApp groups were being set up to discuss the ways forward, they were also outlets for a lot of confusion and anger – for example a lot of operators were (and some still are) obsessed with beating up the landlords, or going after the insurance industry. As McVeigh points out: “I don’t object to landlords trying to collect their rent – what do we do to walk-outs, we chase them down the street / call the police…the issue is much bigger than this and involves all links in the chain of our highly-joined-up economy. I still think for some, it took a while for the penny to drop that this is an existential threat for all British business. Yes, the front-line of consumer-facing bricks & mortar businesses are feeling it first and worst, but in the end the whole economy will suffer. This is the void in strategy which JD has filled, and his six-point plan was unquestionably the right banner to rally round.”

The lobbying skills of the tireless Nicholls, who was at the centre of it all, and the single-mindedness and strategy of Downey have blended well. Stephens says: “They were each in their own way the voice of the industry. I felt like the best way I could help was simply to support them in their endeavours by providing them with evidence to serve as ammunition, being sounding boards on various email threads, and taking on various tasks like collating clarifying questions on announcements (something I did with Charlie, Mike Tye, and Paul Hopper), etc. They were both critical – Kate’s steady hand in direct negotiations and JD’s broadcast to rally the industry and get everyone aligned on direction and message.”

For Downey, he was surprised to find himself in the position he did. His frustration has been that there are a lot bigger businesses and people with “a lot bigger brains than mine” in the sector that have not been vocal or made more of an effort to influence things. He says: “People have maybe been too self-interested and focused too much on details that can be decided at another time, rather than looking at what would work quickly to save the majority. Kate is amazing at the detail and at handling the conversations that need to be had with central government, but I felt she lacked support from certain areas.” For Nicholls, it has always been “key to have the voices of operators to bring home to politicians and more importantly journalists the effects of what is happening at the grassroots and in real life businesses”.

She says: “The sector has been fantastic in providing support – I’m hugely fortunate to have a board of 16 and an Advisory Council of 30 companies from all sub sectors and all different sizes, shapes and operating models who have been generous with their time in helping to provide the business evidence and case studies to support the lobbying task and bring home to politicians how close to the brink we came. Without them working with us since January – particularly those businesses with an international presence who could tell us what was happening in China and South East Asia and then Italy and Europe, we would not have been in a position to sound the warning bell so early with government and to have their help and support.” On what I would describe as those leading a fresh perspective and impetus, in Downey, McVeigh, Stephens et al, she says: “This reinforces what the trade body is saying to government and brings the story to life for journalists. They have all been key in lending additional weight and authority and helping to coordinate the many thousands of SMEs and their key contacts behind the key asks and messages. They’ve also been critical after the first wave of work in the run up to the Budget and after the closure announcement in helping to work through solutions which would deliver the greatest benefit to the greatest number and keeping me focused on the right track.”

Clear messages and necessary needs
By the middle of the week of 16 March, footfall was dropping, sales were plummeting, delivery wasn’t picking up, and the government hadn’t taken significant action at that point. Stephens says: “Everyone was messaging everyone – there was a fair bit of panic. And so much uncertainty around what the short and near term held. For everyone that first week was all about the employees. Cashflow considerations, rents, etc. could all come later. We were in a terrible position between trying to safeguard cash for what was clearly going to be a protracted downturn, while also looking after our employees.” Needing to work at breakneck speed, with a newly promoted chancellor, the government was ready to listen to possible solutions. It also helped that Nicholls and UK Hospitality had already built a close relationship with the right government offices, some that had been strengthened over the last few Brexit-focussed years. The broad church of UK Hospitality’s membership also proved vital. She says: “They were remarkably open because we had been working with them for so long providing detailed information and evidence of the effect on travel and tourism and we had a real time demonstration of the effects of social distancing at an economic level from 16 February onwards. The fact that we were always rooted in facts, with clear pragmatic solutions and recognising the government’s priorities and needs.”

Stephens says: “It was always clear what areas required relief: the various cost lines, support for cashflow issues, etc. But of course, there are a multitude of ways to solve each of these, and consideration had to be made between what the industry wants versus what Kate felt the government might be willing to concede.” For all, safeguarding the lifeblood of the industry, its staff, was the key goal. McVeigh says the low point for him was “realising in mid-March that there was a silent jobs apocalypse happening off-stage and no one yet realised it”.

A key issue was getting everyone’s head around the number of potential layoffs that were going to take place. Stephens says: “UK Hospitality was using a very defensible number in their negotiations with the government – a million layoffs – but JD and I knew this number was considerably more. I managed to get a hold of the breakdown in the 3.2 million hospitality workers number (which, it turns out, doesn’t include 1.2 million QSR workers), and then did my best to network through to various associations to capture figures per sub-sector. It was clear the layoffs, pre-furlough, were going to be in the 70-80% range. At 75% it would have been 3.3 million workers laid off over the course of just a few weeks with no prospects for work. That was alarming. I had received an offer from a venture capital friend who had another venture capital friend with a direct connection to the chancellor, so I wrote a letter for him to pass along, essentially conveying the dire implications of millions of young unemployed people without any job prospects. My friend suggested I get some signatures from other operators so I setup a petition just to capture some chief executive names to provide alongside the letter. We ended up with signatures from over 200 hospitality chief executives. It eventually got leaked to the FT. It was just one small message amongst thousands of touch points into the government’s thinking at that time, but I suppose every little bit helps.”

The need to get the right messages across by all concerns, was something Downey in particular through his WhatsApp messages was keen to keep a close control over. Stretton saw his role as advising UK Hospitality widened to making sure those who were asked for comment by all parts of the press or wanted to put themselves forward were all speaking from the same hymn sheet and had the right facts and figures to back that up. He says: “While it’s obvious to many of us, it was about explaining to the wider world what zero sales meant, and what would happen, and happen very quickly, and about the existential threat, the risk to jobs, and above all being super clear and really joined up about the asks. It was absolutely critical to start telling this story absolutely everywhere. As part of the UKH team, with Kate, Tony (Sophoclides), David (Sheen) and Chris (Banks), and FSC’s Mike Berry, we had to get people on the Today programme, in national newspapers and on biggest news programmes on television. That week, Kate was absolutely everywhere – I’m not sure she slept – and there lots of other people who stepped up too, which was brilliant. Aside from the UKH board, this group included Jonathan (Downey), who did a load of heavy lifting, and people like Brandon (Stephens), Maurice Abboudi, Jamie Barber, Charlie (McVeigh), James Hacon, Tim Foster, Brian Keeley Whiting and lots of others as well as a load of independents. It was a really intense period. I remember doing one briefing at 11pm in my kitchen for someone who was going on the Today programme very early the next morning, and another from my car in a Tesco carpark on Saturday morning for someone who was going on the BBC news on television that lunchtime. That’s how it was for about an eight or nine-day period. It wasn’t so much telling them what to say just chatting through the type of questions they might get asked and being clear about what we were trying to message as an industry. It was a bit terrifying but also strangely exhilarating.” The names touched on by Stretton, and those previously mentioned by Stephens, show the breadth of the sector which was mobilised for the cause. For example, from the hugely-experienced Tye to the up-and-coming Hopper. Out of adversity the sector has been brought together like never before.

By the Friday morning before the announcement later that day by the chancellor Rishi Sunak, the mood was that the government would look to fund 60% of salaries. With this in mind, and the extent to which other country’s governments had come to employees’ aid, you can see why Sunak’s intervention – the government covering 80% of wages per person, was as surprising, as it was welcomed. All those I talked to agree that when the chancellor announced the Coronavirus Job Retention Scheme (CJRS), it was the biggest “win”, and relief, so far. Many in the industry were moved to tears by the news, when they knew they would be able to keep their teams together. For McVeigh it was the point when “I knew the message had got through to government”. “When the chancellor came through with the furlough scheme,” says Stretton, “there was a sense of overwhelming relief, but that quickly gave way to an appreciation of what else needed to be done, and that there was, and still is, lots to do and a whole heap of things to play out.” Up to this point, for Nicholls the two key wins so far were “making sure hospitality was at the front of mind and at the front of the queue and then securing the furlough scheme to support our teams and protect jobs”.

More needed
Whilst this Bank Holiday, has allowed the industry and those campaigning for it, a brief moment to take stock, a lot more needs to be done if hospitality is to play its vital part in the recovery. As Nicholls told Propel in this morning’s newsletter, the chancellor needs to make “one last big, bold intervention” as sector companies “hold on by their fingertips” to remain in business. The Coronavirus Business Intervention Loan Scheme still needed radical reform, including matching the overnight approval approach of other countries and 100% guarantees from government. The final part of Downey’s original six- point strategy, a debt enforcement moratorium, also needs to be confirmed to allow the simmering tensions between landlords and tenants to be cooled. Focus has already started to turn to what the sector needs next.

For Downey and McVeigh, a German-style, nine-month rent free scheme is a must. As Downey says: “We are going to get to the end of the March quarter and no one will have any money to pay the rent, so no one is going to be able to pay their June quarter. If we get the extension to the forfeiture moratorium – that’s six-months from now – no-one is going to be able to pay the rent then either. So, something has to happen in the meantime and a national nine-months rent free measure feels like something we can all get behind. It would be a pause – let’s then add that nine months on to the end of the lease. This would obviously need to be government funded, as you can’t expect the landlords to cover the cost of that.” There is also a call for a grant programme to fill the cashflow hole. On this point, McVeigh says: “I don’t think the industry has really woken up to the scale of the shortfall if businesses are to play their part in delivering Boris’s v-shaped bounce-back. My thought is to do some urgent research on balance sheets of differing size companies and try to extrapolate the scale of the whole and then go to government with that number. CBILs is not working, and even if it did, it is not the right solution. The economy needs hospitality and retail to bounce out of this crisis fully-funded and ready to lead on getting people out and about again and spending money.”

There will also need to be talks on whether the CJRS will need to be extended in line with an increase in the length of the country’s lockdown, and how help can be extended to the sector’s suppliers, who are also feeling the pinch. Downey is also formulating what he calls “Operation Earthquake”, an idea based on an insurance solution that happened in New Zealand following an earthquake there. He says: “Nobody was insured for earthquake damage, and so the government became an insurer of last resort.” It is clear that first battle in what will be one of many for the sector over the coming months has secured some key wins, but has left plenty to be decided upon and to go after. For Nicholls, the last few weeks, has “reinforced the sector as one of the big six business organisations the government needs to liaise with on a regular basis and underlined our importance as the third largest employer”. She says: “Our evidence based, pragmatic, prioritised and targeted lobbying has helped to keep us at the heart of discussions and meant that exposure has delivered solutions.” The crisis has also seen an overhauling of government communications and liaison with business more generally. “Lead organisations have been identified as playing a coordinating role and a conduit up and down to the heart of government – we are that conduit for hospitality and tourism,” emphasises Nicholls.

No time for reflection
There is still so much to do. Nicholls says: “The sector is still in the thick of it, making sure that the proposed solutions are delivered as intended and get the help to those who need it most. We know that it will be important to take breath and review as a sector the skills that were needed to manage the crisis, the challenges and gaps that were identified and how we might apply the lessons learnt to the future. The crisis has exposed the need for crisis management, agile leadership, digital and remote working. There is also an opportunity as we look to stand back up for us to reset the dial on the way in which we want to engage with our teams and customers, the skills and training we might need to reassure and the way in which we manage relationships and environments. Having said that, there is a regular process on a weekly basis of identifying and prioritising the key issues still to be addressed, the additional measures the industry needs to bounce back successfully and how they tie in with the government’s priorities and could help them successfully deliver against their strategy. That’s then reviewed on a daily basis to learn from what worked, what landed, what needs more attention and to refine our work going forward.” McVeigh says: “There will be time to look back when we are safely through the other side and can start the process of rebuilding. Now that we are in a new phase where the focus has shifted to delivering the government aid – and the exit strategy from lockdown.”

Time and time again, when the sector has been tested it has stood up and shown the best of itself. Stephens says: “There was just this feeling that we all needed to help do whatever we could to save this industry. For me, it felt like this was going to be a drawn-out affair with multiple rounds of legislation. It felt like we needed to highlight to the government just how invaluable this industry is to our communities, how interconnected it is with the rest of the economy, and how much of a force for good we are.” There have been many, many fine examples of how the sector is rising to this challenge, and why all of us are fighting in our owns ways to make sure it survives. Thanks to the aforementioned, and countless others I haven’t mentioned, but are equally deserving of praise and admiration, the government and the public at large are again seeing the best of the sector, even in adversity. Stephens says: “The goal is to be able to come back to the government in due course and say, look how important it is to safeguard this industry, which, in a time of unprecedented crisis, stepped up and provided millions of meals to front line workers and those in need.”

There is a long road back to normality ahead, and sadly some will not make the whole journey. But the significant effort put in over the past month, means that there are the makings of a path which the sector can start down and build on. There is a sense we are at the end of the beginning, but that there is a long way to go and lots of hurdles to overcome yet. As Downey says: “We are all in this together, and we will all benefit from what we put in now, to make sure we come back united and stronger.”
Mark Wingett is Propel insights editor

Revolution Bars Group reports support from NatWest: Revolution Bars Group has reported it has furloughed 2,775 team members (98% of the group’s workforce) through accessing the UK Government’s Coronavirus Job Retention Scheme, enabling future retention of employment for these employees whilst delivering a considerable payroll saving. The chief executive, chief financial officer and non-executive directors salaries have been reduced by 50% and the company has implemented significant salary reductions for senior employees remaining in work. The company has deferred all PAYE and VAT payments from 18 March 2020 for three months. It also reported assistance from suppliers regarding contract suspensions and extended credit and payment terms and has begun negotiations with landlords regarding rent relief. In addition, all capital expenditure has been cut. The company said: “These measures have significantly reduced the group’s weekly running costs to approximately £0.4m per week and management continues to seek further cost reduction opportunities. Costs will be kept to a minimum until the group’s bars can reopen given the ongoing uncertainty as to the length of the enforced closure period and how trading may be impacted by any ongoing restrictions when trading is able to recommence. The group has also renegotiated the completion terms of the transaction to surrender five leases to its landlord Aprirose that was originally announced on 15 January 2020. The completion payments have been reduced from £3.64m to £2.25m and deferred payment terms agreed for more than half of the reduced amount, which saved a cash outflow in March of £2.8m (includes VAT). As previously announced on 18 March 2020, the board has been exploring all funding options available to the group. This has included discussions with its lending bank, Natwest. The group’s Revolving Credit Facility (the “Facility”) runs to December 2021 and currently is for £21.0m but due to step down to £18.0m at the end of June 2020 consistent with the group’s strategy and successful execution of reducing debt. Following the impact of covid-19, as at the end of last week (11 April 2020), the group had net bank debt of £17.8m. The board is pleased to announce that, subject to final documentation, Natwest has agreed to increase the Facility to £30.0m until 31 August 2020, following which it will step down to £24.0m as the group begins to benefit from its normal positive working capital cycle following an assumed recommencement of trade in July 2020. Natwest has also agreed to waive all financial covenant tests at March and June. Given the prevailing level of uncertainty regarding both the timing of being able to reopen the group’s bars and the trading environment in the post covid-19 period, Natwest has indicated it will review both the amount of available Facility and the covenant tests applicable from the end of September 2020 by reference to the group’s updated trading forecasts closer to that date, however, as demonstrated by the agreed increase in the facility, they remain supportive of the group. The additional Facility, agreed on normal commercial terms, will provide additional liquidity, headroom and financial flexibility to support the business through these challenging times. The board continues to monitor the group’s funding requirements and all options available to it and will update further when appropriate.” Chief executive Rob Pitcher said: “Prior to this crisis, we were delivering positive like-for-like sales, had significantly reduced our debt position, were generating strong capex returns, and were on track to meet our full year profit expectations. We welcome and are delighted with the additional support from Natwest at this difficult time. They have acted as a true partner to our business and this decisive action has enabled us to be another step closer to being well-positioned to emerge from this crisis. We are also very grateful to those other stakeholders, including our employees, suppliers and certain landlords who have approached this crisis in a similar manner, helping to secure the future of this great business. However, there is still more which needs to be done to ensure the protection of the 3.2 million jobs in our sector along with the £39 billion of direct tax receipts paid annually to the UK government. Specifically, this includes more support in connection with property related costs during this enforced closure period and beyond, including support for landlords themselves and we encourage the UK government to take swift action in this respect.”

M&B provides coronavirus update: Mitchells & Butlers has reported all sites have now been closed for over three weeks, and a number of actions have been taken to reduce its cost base, These include: Over 99% of employees have been put on furlough, with basic pay for all employees including the board reduced to between 60% and 80%, depending on seniority; operating costs have been reduced to the minimum required to keep the estate secure, safe and in good condition; discretionary capital expenditure projects have been stopped. The company added: “It is possible that the forced closure of our sites, as required by the government, could amount to a technical breach of our secured financing arrangements but, as a first step, we are announcing today that a temporary waiver until 15 May has now been granted to avoid this pending further discussions. 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. 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.”

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