M&B reports profit recovery

By Nikkie Thatcher

- Last updated on GMT

Trading update: M&B's results cover the year to 24 September 2022 (image: Getty/Ole Schwander)
Trading update: M&B's results cover the year to 24 September 2022 (image: Getty/Ole Schwander)

Related tags Mitchells & butlers Pubco + head office Finance Tenanted + leased

Mitchells & Butlers (M&B) has revealed profits have recovered in its latest trading update, covering 52 weeks ending 24 September 2022, despite a "highly challenging trading environment".

The business, which owns brands including Toby Carvery, Vintage Inns and All Bar One, reported like-for-like sales has increased by 1.1% against 2019 figures and stated excluding the impact of utilities, profits had broadly recovered to pre-Covid levels.

Total revenue was at £2,208m – up from £1,065m in the 2021 financial year – and operating profit was at £124m, which had increased from £81m in the previous period.

Furthermore, profit before tax was £8m, adjusted operating profit was up from £29m to £240m.

Investment plans

Moreover, the business laid out its plans to reduce its environmental impact and committed to a number of targets.

This included Net Zero emissions by 2040, zero operational waste to landfill by 2030 alongside a recycling rate target of 80% for the same period and a 50% reduction in food waste also by 2030.

M&B resumed its capital programme since the start of the financial year and has completed 170 investment projects that were mainly (160) remodels as well as conversions (six). It also acquired the freehold of three sites that were previously leasehold and opened one new site in Germany.

The company outlined how capital expenditure remained a priority but was below targeted levels due largely to global supply chain disruption and delays in getting planning permission, which resulted in reduced project completions.

However, for the 2023 financial year, it anticipated capital expenditure to increase further to about £200m.

Challenging environment

M&B chief executive Phil Urban said: “The trading environment remains highly challenging with cost inflation continuing the put pressure on margins and we are ever mindful of the pressures the UK consumer is facing.

“However, we are encouraged by the strength of sales growth at the end of the last financial year, which has improved further into the early weeks of this year.

“We remain focused on the delivery of our Ignite programme with existing and new initiatives driving cost efficiencies and increased sales, alongside our capital investment programme.

“Combined with our diverse portfolio of well-known brands, value proposition, strong estate locations and talented people, we are well positioned to face both the challenges and opportunities ahead.”

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