Mitchells and Butlers reports like-for-like sales increase

Total revenue grew 3.3% to £1,889m in the year in which it opened 47 new sites and undertook 10 conversions with an expansionary capex of £55m. Adjusted pre-tax profit increased from £156m to £166m, and adjusted earnings per share rose from 28p to 30.5p.

Adjusted operating profit for the company increased 1% to £304m; M&B said operating margins declined slightly as a result of increased investment into outlet level service and amenity, along with inflationary and regulatory cost pressures.

Food sales drove the like-for-like sales increase (+2.9%, with drink at +1.4%). M&B said brands in the middle to upper end of its spectrum drove this revenue growth. In the retained estate, revenues on a 52 week basis grew 5.3% to £1,855m.

Of its 47 openings, 38 were leaseholds, located on leisure or retail parks. Overall EBITDA returns on expansionary capital invested over the past two years were 17%.
During the year, M&B delivered £6m in savings by reorganising its central support functions and infrastructure. Scores for guest satisfaction and retail employee engagement increased five percentage points, the company said.

Total CAPEX in the year was £147m, with £83m spent on maintenance, £9m on infrastructure, and £55m on new site openings.

M&B said there had been a 1%, or £37m, reduction in its property valuation. Net debt at the period end was £1.8bn, representing 4.5 times EBITDA.

Like-for-like sales have been "broadly flat" in the first eight weeks of FY2013, M&B said.

Bob Ivell, non-executive chairman, said: "This year we have initiated a significant cultural change programme focused on streamlining internal processes and placing the guest at the heart of everything we do. We have restructured the way we support our operations teams, reduced our central costs and increased the accountability of our senior executives for their brands. I am extremely pleased that we have delivered a resilient financial performance, during a period of such cultural and organisational change.

"Since becoming chairman my foremost priority has been to recruit the right person to lead the business as chief executive. Having appointed Alistair [Darby], my focus will now shift to enhancing the balance, skills and compliance of the board through the selection of appropriately qualified independent non-executive directors."

Darby said: "I am delighted to be leading a company with great people and popular branded pubs, bars and restaurants. M&B is well positioned to take maximum advantage of our evolving industry and we have the right strategy in place. I look forward to continuing the business transformation to deliver long term earnings growth and shareholder returns."