Magnier and McManus-backed UK pub group rebounds to pre-Covid sales levels

Horseracing tycoons John Magnier and JP McManus jointly own more than 23% of Mitchells & Butlers, which owns chains such as O’Neill’s, All Bar One and Harvester

Racing tycoon John Magnier, along with JP McManus, is a significant shareholder in UK pub group Mitchells & Butlers. File picture

Irish-backed UK pub group Mitchells & Butlers has seen a rebound to pre-Covid sales levels as consumers returned to its bars and restaurants after Britain lifted its restrictions on its hospitality sector.

Horseracing tycoons John Magnier and JP McManus jointly own – through their Elpida investment vehicle – more than 23% of Mitchells & Butlers, which owns chains such as O’Neill’s, All Bar One and Harvester.

The Irish financiers cemented their interest in the business by backing plans, earlier this year, for a €400m share sale as part of the pub group’s Covid survival plan.

M&B said sales in the most recent eight weeks were 104% of pre-Covid levels due to pent-up demand, while year-to-date sales were at 45% of 2019 levels.

British pub operators, as a whole, have seen a rebound in sales as drinkers returned after months of lockdowns. However, they also flagged a labour crunch that could strain the industry ahead of a busy Christmas holiday season.

Risk of renewed restrictions

As in Ireland, the UK hospitality sector has suffered from prolonged closures of pubs and hotels over the last 18 months and still faces the risk of renewed restrictions should any spike in infections become unmanageable.

Since England lifted all restrictions in July, many people have returned to eateries and pubs to dine out with their friends and families, although some remain wary.

A bigger challenge could be a shortage of workers, which has beset the industry since the reopening and could potentially limit earnings during usually bustling Christmas season around the end of the year.

EU residents who left the UK because of the pandemic, or because of Brexit, and a "pingdemic" that forced people to isolate after being "pinged" by a government app because they had been in contact with someone who had tested positive for Covid have contributed to the staff shortfall.

"Whilst this is very frustrating, we believe that the end of the furlough scheme in September will increase the pool of labour," said City Pub Group, which runs 45 pubs.

• additional reporting Reuters