A checkered table is carefully laid at The George of Harpenden pub, including a napkin, cutlery, glass, candle, and menu.
A checkered table is carefully laid at The George of Harpenden pub, including a napkin, cutlery, glass, candle, and menu.

Key terms of our securitisation

Here's a summary of the key financial terms that have an impact on the operating flexibility of Mitchells & Butlers plc.

Dividends

The ability to pay dividends out of the securitisation company (Mitchells & Butlers Retail Limited) is primarily governed by the ratio of free cashflow to debt service cover and the ratio of EBITDA to debt service cover (although other terms also impact on the ability to pay a dividend). These ratios must be at or above 1.3 times and 1.7 times respectively for dividends to be payable up from Mitchells & Butlers Retail Limited to Mitchells & Butlers plc. For the year to 9 April 2022, these ratios were at 1.4 times and 1.4 times respectively.

Disposals

In general, Mitchells & Butlers Retail Limited has the flexibility to make unlimited disposals subject to using the proceeds to repay the debt allocated to those pubs. It can also dispose of 25% of the EBITDA generating pubs over the lifetime of the securitisation, subject to a maximum of 10% in any one year, without the requirement to repay debt subject to certain constraints and has the ability to reset this level with agreement from the Ratings Agencies.

Maintenance of the pub estate

Mitchells & Butlers Retail Limited is required to spend annual maintenance of not less than the higher of 5.7% of prior year turnover or £35k per pub in order to ensure that the assets are well maintained and the consumer offers refreshed and therefore have a similar and continuing income generating ability. This is entirely compatible with Mitchells & Butlers' strategy to maintain the high relative amenity of the estate and is consistent with historical and future maintenance plans.

Net worth

Mitchells & Butlers Retail Limited is required to maintain, as at the end of each financial year, aggregate net assets equal to or greater than £500 million. As of 9 April 2022 the net worth was £2,359m.

Debt service

Mitchells & Butlers Retail Limited must maintain a minimum free cashflow to debt service coverage ratio of no less than 1.1:1 as measured on any financial quarter date. For the year to 9 April 2022 the ratio was 1.4:1.

As a result of the Covid pandemic, under a waiver dated 14 February 2021, the requirement to meet the Debt Service Covenant on the Financial Quarter Dates from March 2021 up to and including September 2022 have been waived or amended, so no Loan Event of Default has occurred.

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Classes of debt in MAB securitisation

Things are continuously changing, and we're keeping a close eye on our business securitisation and debt - and keeping you informed along the way.

A man is serving himself at the carvery deck. On his plate, there are some crispy roasts waiting.

Amortisation profile

Learn more about the bonds of Mitchells & Butlers and their legal amortisation profiles. Our 2020 summary is also available to download, if you'd like to keep a copy.

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Announcements and presentations

Anything you need relating to the various announcements and presentations of Mitchells & Butlers - including the Interim Investor Report and Financial Compliance Certificate - can be found here.

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Reports & Results

Access an up-to-date evaluation of our financial performance at Mitchells & Butlers, including market and analyst information, share prices and business strategy.

Tim Jones

Chief Financial Officer

Amy De Marsac

Head of Investor Relations & Sustainability

Denise Burton

Deputy Company Secretary