Mitchells & Butlers reports 2.7% rise in like-for-like sales

By John Harrington, M&C Report

- Last updated on GMT

Related tags: Food sales, Board of directors, M&b

Mitchells & Butlers (M&B) has reported a 2.7% rise in like-for-like sales in the 28 weeks to 7 April, driven by food sales, although profit before tax declined £1m to £42m due to exceptional operating costs totaling £20m.

Meanwhile, executive chairman Bob Ivell said he was “pleased with the progress being made” to appoint a new chief executive and more non-executive directors for the managed pub operator, and an announcement will be made “at an appropriate time”.
Revenue grew 6.3% to £969m, with operating profit up 1.5% to £138m before exceptional items; the figures exclude the 333 sites sold to Stonegate in November 2010.
Net operating margin fell 0.7 percentage points to 14.2% due to “inflationary cost increases in energy and food”, which reached £13m. Adjusted earnings per share increased 10.6% to 12.5p after lower interest and tax charges, and basic earnings per share fell 0.3p to 8.8p.
M&B opened 35 sites and undertook seven conversions in the period with expansionary CAPEX at £42m. In total, 27 of the new openings were leaseholds and 24 of these were on leisure and retail parks, taking its estate on such locations to 80 venues. M&B said it “remains on track” to open 55 new or converted sites in the full year.
Growth was driven by food, with like-for-like food sales up 3.4% in the half-year, against wet sales up 2.2%. Sales growth was driven by an increase in food spend of 4.2% and average drink spend of 6.2%, despite a decline in like-for-like main meal volumes of 0.7% and drink volumes of 3.7%.
However, in the 11 weeks to 7 April, food sales were up by a more moderate 0.9%, and drink sales declined 0.8%, due to difficult comparatives. A “poor April”, with persistent rain, saw like-for-likes growth in the 33 weeks to 12 May fall to 2%, M&B said.
Overall food sales in the half year were up 9.4%.
Some bright points in the half year included the Valentines Day weekend, when like-for-like sales overall were up 5.4%, and a 4.5% rise in the most recent May Day bank holiday weekend.
Ivell said: “We have remained firmly on the front foot with a relentless focus on actions that will drive the medium and long term success of the business. We are continuing to deliver a resilient operating performance, maintaining the roll-out of our industry-leading brands and progressing our major business change programme.
“I am pleased with the progress being made to appoint a new CEO and further non-executive directors and look forward to being able to make an announcement at the appropriate time.
“Despite challenging trading conditions, we remain confident that we can deliver a full year result in line with expectations.”

Related topics: Mitchells & Butlers

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