Nicholas Batram at Peel Hunt looks ahead to Mitchells & Butlers’ (M&B) half-year results on Thursday 22 May.
Batram, who issued a Hold recommendation for M&B at a Target Price of 400p, said: “The group should report steady progress at the interim stage and we would expect like-for-like growth to have accelerated on the 2% reported for the first 17 weeks of the year. We are looking for adjusted PBT to come in at around £77.5m vs £75.0m last time.
“There has been a lot of work going on ‘under the bonnet’ at M&B and with an improving trading backdrop the business should begin to kick on, particularly given the portfolio of brands. Some of the value brands/offerings have struggled but with signs that the economic recovery is broadening out, should be good news for M&B.”
Batram added: “The rating is hardly demanding, 8x EV/E BITDA to September 2014E, falling to 7.6x in 2016E. However, the lack of dividend and shareholder structure are factors in this.”
