Mitchells & Butlers (M&B), the managed pub and casual dining group, has this morning revealed strong comparable trading in the past nine weeks, with like-for-like sales up 4.4% in its core business. Within that figure food like-for-like sales were ahead 7.0% and drink like-for-like sales were up 1.3%.
The figures, for the nine weeks to 18 September 2010, came as the group unveiled a full-year trading update. Like-for-like sales for the 51 weeks in total were ahead 2.8% in the “retained estate”, which excluded 333 non-core pubs plus the Hollywood Bowl and Innkeeper’s Lodges business that M&B has agreed to sell.
The group said that in addition to the £500m raised from these major disposals it had also sold or exchanged contracts on a further `£54m of disposals – largely from the sale 44 individual pubs, at an average ebitda multiple of more than 15 times.
The business in total – including businesses about to be sold – saw like-for-like sales rise 3.6% in the past nine weeks, and ahead 2.0% in the 51 weeks to date.
M&B said it expected capital expenditure to total £131m in the current year with around £20m spent on expansionary projects, including 54 conversions from the existing business. Returns on conversions in the past two years continued to average above 25%, it said.
The company, led by Adam Fowle, expected to invest about £200m of capital next year on acquisitions, maintenance and conversions. The pipeline for site openings next year, including the Ha Ha Bar & Grill deal announced last week, comprised 35 sites with a further 10 sites with heads of terms agreed.
Operating margins had improved 1.2% to 16.5% and net debt would be £2.3bn at the yearend the company said – excluding any proceeds from the pending £500m disposals.
In its pre-close statement the company said that the business had performed resiliently in a period that had seen a subdued consumer environment, compounded by the January VAT rise.
Fowle, chief executive, said: "This is a very encouraging performance, particularly given the present consumer economy, and underlines the strength of the M&B business. I am pleased at the speed of delivery on our strategic plan."
The company will announce full-year results for the yeat ending 25 September 2010 on 23 November.
