Mitchells & Butlers shares plunged on Thursday morning after the group revealed it is exploring a potential equity raise.

The group said that it was looking at various options including raising money from investors amid the disruptions from the pandemic. For every month that pubs and restaurants are forced to close, Mitchells & Butlers lose £40m.

“As a result, the directors believe it is prudent to explore an equity capital raise, to give the group increased financial and operational flexibility,” said the group in a statement. “No decision has yet been made with regards to the timing, size, or terms of any such equity capital raise.”

Last year, the pub chain axed 1,300 jobs due to the impacts of the pandemic.

Phil Urban, the chief executive, commented: “We are now in a third national lockdown. I am consistently impressed by the resilience and energy of our teams as we repeatedly open and close businesses that we have invested in to make Covid secure and urge the government to better understand the huge impact these restrictions are having on the hospitality sector.

“The Job Retention Scheme is temporarily protecting some employment but there is a real and pressing need for support for businesses themselves if we are to return to being the vibrant sector and important employers that we were.

“Mitchells & Butlers was a high performing business going into the pandemic and with the support of our main stakeholders I have every confidence that we can emerge in a strong competitive position once the current restrictions on us are lifted,” he added.

In the first quarter of the year, the group saw a 67.1% drop in sales. The group operates about 1,700 pubs across the UK, which includes chains such as All Bar One, Nicholson’s and O’Neill’s.

Mitchell & Butlers shares are trading 7.58% lower at 219.50 (1032GMT).