Listed restaurant and pub groups suffered a day of carnage today as the coronavirus outbreak took its toll on operators’ share prices.
Marston’s and The Restaurant Group were the biggest losers, with their share prices down 44% and 46% respectively.
Mitchells & Butlers was down 30%, City Pub Company 36%, Young’s 25.7%, and JD Wetherspoon shares had fallen by 22% when trading on the London Stock Exchange closed.
Franco Manca operator Fulham Shore was down by 30% while Loungers was down by 13.7%.
Fuller’s suffered the least bad losses among pub operators, down 11.2%, while Domino’s was down 5.3%, as consumers opt to order pizza delivery.
A restaurant and bar investor described the situation as a “complete and utter bloodbath” and warned many businesses would fail as customers stay away.
“If you’re in city or central London, it probably makes sense to close now, because you’re losing so much money,” the investor told MCA.
“London villages are holding up a bit better as people are working from home.
“Generally speaking, everything is 50%, 60% down, those sorts of numbers.”
The investor called for the government to step and force landlords to give a minimum of three months rent free.
“They need to cancel business rates, cancel VAT, cancel everting.”
“So many businesses will go to the wall, particular small companies which don’t sit on loads of cash.
“It’s very very bleak. No one is escaping from this.”
Gail’s Bakery and All Star Lanes backer Luke Johnson called for the government to step in to ensure banks continued to support the sector.
He tweeted: “Banks have virtually unlimited liquidity available to them and ample capital. Government must ensure they actually lend to/support industry - if needs be by underwriting short term credit risk - to prevent large scale defaults and gruesome job losses.
Meanwhile restructuring advisory firm RSM said it understands HMRC has been told to be flexible with payments.
Paul Newman, head of hospitality and leisure at RSM said: “The hospitality sector is facing a short-term cash flow catastrophe that will require extraordinary support from government, banks and landlords.
“The early indications are that HMRC’s Time To Pay unit have had instructions to be flexible and to keep the situation under constant review. They acknowledge that initial agreements may need to be revised as the impact unravels which is in contrast to previous policies requiring original agreements to be honoured.
“At the moment, they do not require formal cash flows, reflecting the time pressure they are under and the uncertainties in forecasting in such unprecedented circumstances.”
HMRC have a dedicated helpline number to help the many businesses concerned about being able to pay taxes due to COVID-19.
Listed groups make heavy losses amid coronavirus bloodbath
Listed restaurant and pub suffered a day of carnage as the coronavirus outbreak took its toll on operators’ share prices. Marston’s and The Restaurant Group were the biggest losers, both suffering 44% and 45% losses respectively at the time of writing. City Pub Company and Fulham Shore also suffered heavy losses. A major investor in the restaurant and bar industry described the situation as a “complete and utter bloodbath” and warned many businesses would fail as customers stay away. He said licesnes premises were reporting sales down 50-60% yesterday.