Mitchells & Butlers this morning reported a 4.8% rise in like-for-like sales for the 28 weeks to 9 April, citing growth in food, wine and soft drinks.
For the eight weeks to the 7 May, like-for-like sales grew by 5.1%, despite what the group described as a ‘noticeable deceleration’ in the early part of the second quarter.
The company saw a 4.9% increase in half-year pre-tax profit to £86m, on turnover up 5.0% to £864m. Ebitda saw a 5.8% rise to £202m, with operating profit of £140m, 4.5% growth.
Tim Clarke, the company’s chief executive, said: "This has been driven by our strong brand portfolio and our commitment to customer service, product range and value.
"We have maintained our margins despite the significant external cost pressures. Our focus on the growth opportunities in food, wine and soft drinks has delivered substantial volume gains."
Food volumes were up by 9%, with drink volumes up 3%. Average weekly sales per managed pub were £15,900 per week for the 12 months to 9 April.
Sales at the group’s Pubs & Bars division were up by 3.1% to £500m for the 32 weeks to 7 May, with like-for-like sales up 3.1%, or 1.9% on an uninvested basis. Operating profit fell by 2.3% to £86m.
M&B said that despite further volume declines in the on-trade beer market and ongoing price competition from supermarkets, drinks sales showed good growth as a result of continued development of the range of products and price points on offer.
The branded local pubs in residential areas with strong food offerings and central London pubs performed ‘strongly’, while unbranded local pubs with a lower food sales mix were more exposed to the beer market declines. High Street circuit bars continued to face intense competitive conditions.
At the Restaurants division, total sales for the 32-week period were up by 6.9% to £356m, with operating profit rising by 17.8% to £53m. Like-for-like sales rose by 7.4%, or 5.3% on an uninvested basis.
The company said that its pub restaurants now sold an average of 1,700 main meals per week, with the key brands of Vintage Inns, Harvester, Toby and All Bar One performing ‘very strongly’.
The group invested £88m in organic growth in the estate during the period. Expansionary capital of £31m was invested in four new pubs, 46 conversions to current brands or formats and the development of three Innkeepers Lodges adjacent to existing pubs
Last week Mark Brumby, analyst at Oriel Securities, said: "Scepticism is likely to prevail, but Mitchells & Butlers' pubs are essentially in the right places and doing the right things."
The group said it was halfway through a £100m share buyback. During the half year 15.5m shares were repurchased for £52m. 10.2m shares were cancelled and 5.3m shares were placed in Treasury or Employee Trusts to satisfy the exercise of existing share options.
The group had net debt at 9 April 2005 of £1.62bn. Earnings per share were up 20.4% to 11.2p.
Clarke concluded: "Whilst the outlook for consumer spending is deteriorating, we remain confident that our strategy will enable us to capture additional market share and to leverage our economies of scale to generate further growth and cashflows to benefit shareholders."
