Mitchells & Butlers healthy after spell feeling under the weather

The operator of the All Bar One, Harvester and Toby Carvery chains has blamed dismal weather and the August riots for taking the edge off an otherwise strong summer.
Mitchells & Butlers reported like-for-like sales growth of 5.2 per cent for the 51 weeks to September 21, enabling it to stay ahead of its competition and keeping all its brands in growth.
The Birmingham-based company said it had retained its leading position through the final quarter, although the rate of growth reflected “a progressive easing of the inflationary environment”. It also cited factors including “an unseasonally cool and wet summer period and the disruption caused by anti-immigration riots in city centres during August”.
The company said that the impact of the riots had not been restricted to trouble flaring in places where it had pubs. There were also knock-on effects of people avoiding city centres after work and of workers being sent home for safety reasons.
Although M&B achieved a positive outcome for the year, there was some variation in the performance of different parts of the business. Thus, while the first quarter delivered like-for-like sales growth of 7.7 per cent, by the final weeks of the year trading had dipped to growth of only 2.5 per cent.
The company’s marathon campaign to upgrade or rebrand its venues continued as it completed 185 conversions and remodels, in addition to a rollout of initiatives to cut energy bills with solar panels. It also opened six new sites.
Net cost headwinds are set to fall by about £55 million in the present financial year, with increased labour costs being substantially mitigated by deflation in its energy bills and by slowing food prices inflation. It also benefited from strong cost controls at its pubs and restaurants.
• Drinks boss resists temptation and sticks to investment
“Coupled with a robust sales performance, ahead of the market, we remain confident in the delivery of a full year result at the upper end of consensus expectations,” the company said.
Shares of M&B, which are up more than 40 per cent over the past 12 months, added a further 7½p, or 2.5 per cent, to 304½p.
M&B has a portfolio of brands and formats that include household names such as Harvester, Miller & Carter, Premium Country Pubs, Sizzling Pubs, Stonehouse, Vintage Inns, Browns, Castle, Nicholson’s, O’Neill’s, Ember Inns and Ego Restaurants. In addition, it operates Innkeeper’s Collection hotels in Britain and Alex restaurants and bars in Germany.
Created in 2003 through a demerger of the old Bass brewing empire, it has 1,716 venues. Its biggest shareholder, with 55 per cent, is Odyzean Group, a consortium of sporting tycoons, including Joe Lewis, John Magnier and JP McManus, who first worked together in 2011 when making an abortive bid.
Phil Urban, 61, the M&B chief executive, said: “Sales growth has continued to normalise as inflationary cost pressures ease, while our diverse portfolio of established brands and locations underpin our outperformance against the market.
“We enter the new financial year armed with a fresh wave of initiatives and a full capital investment programme planned to deliver cost efficiencies, increased sales and to further drive market out-performance and increasing profitability.”