Following Mitchells & Butlers pre close trading update yesterday, analysts from JP Morgan and Goodbody give their views on the company’s performance.

Alexander Mees and Ted Nyhan, from JP Morgan said they believe Mitchells & Butlers is on track to hit the analyst’s £302m estimate for operating profit in the year to 30 September 2018.

“LFL sales growth for the 51 weeks to 22 September was 1.2% on a reporting basis, outperforming a flat market as the group’s capital refresh programme continues to bear fruit.

LFL sales growth in the past eight weeks was 2.2%. While this was against an undemanding comp of 0.3%, it is encouraging to see a normalisation of trading patterns after an unusual summer of football and sunshine. Our price target increases from 270p to 280p, September 2019.”

The note added: “Although the split of food and drink LFLs were not disclosed, M&B did state that it had returned to more normal patterns after the hot weather and World Cup acted as distorting factors during the summer.

M&B continues to expect operating margins to be lower in FY18 than in FY17. We model 14.2% operating margin in FY18, compared with 14.4% in FY17.

M&B has indicated it expects full year earnings to be ‘in line’ with its expectations. Company-compiled consensus operating profit is the same as our forecast at £302 million.”

Paul Ruddy, gaming and leisure analyst at Goodbody said: “Overall we are encouraged by the improvement in trading momentum in the final 8 weeks of the year. Hot weather and the World Cup were very unhelpful during the summer for the food part of the business but Mitchells & Butlers continues to track at least inline if not better than the Coffer Peach.

“We retain our hold recommendation owing to the continued cost headwinds facing the sector but believe MAB is making good progress in refreshing it’s estate and the results from its Ignite self-help programmes are encouraging.