LEGAL | Staff Reporter, UK

Pret A Manger warns of “material uncertainties” as closures impact sales

It permanently closed 74 outlets in the UK last year.

Pret A Manger warned of “material uncertainties” over whether it can continue as a going concern, saying it was still too early to know the full impact of the coronavirus pandemic on the business.

Uncertainties include another potential lockdown in the UK and the possibility that the chain may not be able to extend an £150 million debt facility that runs out in December this year.

“The impact of coronavirus on the global retail and hospitality industry at the date of this report has been severe. Social distancing will continue to change consumer habits for some time, and may permanently affect where, when and how customers choose to enjoy Pret’s food and drink,” Pret chief executive Pano Christou wrote in his review of the business dated 1 April this year.

“It is still too early to know the full impact on the business due to the ongoing uncertainty.”

Pret had “fundamentally changed its business model” during the pandemic, Christou added, with the business expanding home delivery and selling packaged goods online and via retailers.

Shareholders of the chain, which permanently closed 74 outlets in the UK last year and 22 in the US, infused £185 million of additional funding in February and put a further £100 million on standby in March as its city centre outlets were impacted from declined footfall.

The group, which has also bought the Eat chain in the UK, operates 389 outlets in the UK and 158 internationally.

Sales at Pret A Manger (Europe), the group’s main trading company, posted a pretax loss of £26 million in the year to 2 January 2020 compared with a profit of nearly £49 million the year prior.

Pret paid shareholders a dividend of nearly £9.8m in 2019, which was slightly down from £10 million a year before. Further waiver of existing covenants was obtained for the period until September 2022 and no dividends will be paid during the covenant waiver period.

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