Mitchells & Butlers sees quiet start to 2007

Mitchells & Butlers (M&B) saw a slow build up to Christmas and has a seen quiet start to the New Year in some of its divisions, investors will be told today.

At the group's AGM today chairman Roger Carr will tell shareholders that overall uninvested like-for-like sales grew 2.4 per cent in the 16 weeks to January 20 2007.

While the managed pub group experienced a "good festive fortnight" there had been a relatively quiet start to the New Year across its pub restaurants, he says.

Despite this group like-for-like food sales "continued to grow strongly at 7.2 per cent ahead of last year", Carr says.

Like-for-like drinks sales grew 2.9 per cent, "reflecting significant market share gains in an on-trade market where beer volumes declined by 4.1% in the quarter to December 2006, due to the increasingly aggressive discounting of alcohol by supermarkets", he adds.

Carr notes that retail gross margins were maintained with average prices of food and drink three per cent higher than last year.

M&B's Scottish estate - five per cent of the group's total - saw like-for-like sales up 0.4 per cent, with food sales up five per cent and drink turnover down two per cent.

Carr says the group is "rigorously evaluating the risks and rewards of a REIT structure and will report to shareholders by the interim results in May".

"The review is focussed on whether we can unlock the tax advantages and any value uplift in the short term, whilst being sure that this would deliver sustainable value longer term."