M&B boss 'content' with re-structure progress
Mitchells & Butlers (M&B) has yet to sell any of its 300 wet-led pubs on the market with Sapient Corporate Finance — as it decides how best to package up the pubs.
Chief executive Adam Fowle said he was "content" with progress on its retructure to a food-led business and that he expected the deals to be done by the end of Autumn.
The company is currently considering whether packages or individual sales will provide the best returns for shareholders.
The deadline for franchisees to buy their pubs has also now passed but Fowle reported they had "not been inundated" with offers with only a couple of sales completed so far.
If franchisees fail in their bid to buy the freehold, then the freeholds are likely be sold on with franchisees in situ continuing to trade under the same terms.
The managed operator has already converted 40 sites to one of its key 12 brands and is on track to complete 50 by the end of the year. "We expect an EBITDA uplift of 25% per pub, which means a 40% uplift in sales," said Fowle.
The VAT increase in January will add £50m to the company's tax bill with all costs being passed on to the customer. But overall, Fowle is optimistic about the new Government.
"They are very business like and I like the sound of what I am hearing in terms of taking steps to normalise the price of beer in the off-trade.
"The supermarkets were selling 18 pints for £10 during the World Cup.
"They are also talking about reducing the burden (of red tape) on pubs and that can only be a good thing."
World Cup trade
The M&B boss denied being the only Englishman to be pleased to see England crash out of the World Cup early after seeing like-for-like food sales dip 2% for the nine weeks to 17 July.
However, M&B still recorded a 1.2% increase in like-for-likes over the period — indicating an underlying growth rate of 3.2%.
"Of course I was gutted but in terms of the business we knew what would happen and flagged it up before. A big football match really impacts on the dining so we adjusted our promotional activity.
"Our business model has slightly changed over the past couple of months and is not just about price and volume.
"We have used value and marketing to get new customers in who are not just attracted by price.
"We have reduced our dependency on price-seeking customers. So it is new customers, spending a bit more."
Its new marketing campaigns include TV ads for Toby Carvery and Harvester as well as local campaigns and utilising social networking websites such as Facebook.
"The web has been a very big source of marketing for us," said Fowle. "We have around 110,000 fans on our Facebook Toby Carvery page. It is a little scary because you are not in control but it is a very powerful tool.
"It provides frank feedback."
