Mitchells & Butlers (M&B) achieved like-for-like (lfl) growth of 1% in the 28 weeks to 9 April 2022, versus the same period in 2019.
The pub and restaurant operator said lfl sales growth had been encouraging in the second quarter – up 3.8% compared to FY19 and that the challenging cost environment was partially being mitigated through capital and its Ignite programmes.
On an underlying basis, excluding the impact of this rate change, sales strengthened further in the five weeks after the end of the period to 2.2%.
The group reported total revenue of £1.16bn, compared to £219m in the first half of 2021, while operating profit came in at £121m, compared to a loss of £132m. Profit before tax was £57m, against a loss of £200m in HY21.
Food sales continued to outperform drink, with lfl growth of 6.9% over the period, and with premium brands continuing to perform well, helped by the reduced rate of VAT.
More recently it has noticed an encouraging trend in the recovery in city centre sites, with lfl growth of 1.1% during the quarter as people began to return to offices.
Drink sales continued to be challenged across the sector, with lfl sales down by 6.9% in the first half, with suburban locations seeing the largest declines.
Based on FY 2019 and a cost base of £1.8bn, M&B said that cost headwinds were expected to be in the region of 11.5% for the current year. The business said it had taken the decision not to pass on the full extent of the cost inflation and instead to assess the pricing movement across the market, and more frequently.
Phil Urban, chief executive, M&B, said it was encouraged by the improvement in sales trajectory through the first half of the year, and the progress in each of its markets, with its food-led businesses continuing to lead the way.
“The trading environment remains difficult. Cost headwinds present a significant challenge to the industry, particularly those costs related to utilities, wages and food. In light of this, our teams have refocused their efforts on driving further efficiency and productivity gains through our Ignite programme,” Urban said.
“In parallel, we are pushing forward with our capital investment plan which we are pleased to see delivering strong sales uplifts.
M&B increased its investment in delivery during the half year, with more than 1,100 sites live. Delivery and takeaway sales are estimated to rise to c.£45m this financial year, it said.
“The fundamental strengths of the business remain, and we are well positioned to continue on our trajectory of recovery following the pandemic,” Urban added.
