The operator behind popular chains like All Bar One, Harvester, and Toby Carvery, Mitchells & Butlers, has attributed a dip in sales performance to poor weather conditions and riots in August, even though the overall summer season remained strong.
For the 51 weeks ending September 21, the Birmingham-based company reported a 5.2 percent increase in like-for-like sales, allowing it to maintain its competitive edge with all brands showing growth.
Mitchells & Butlers noted it has held its market position through the last quarter, although growth rates showed signs of a gradual easing of the inflationary landscape. Factors such as an unusually cool and wet summer and disruptions from anti-immigration protests in city centers during August were highlighted as contributors to the sales performance.
The riots impacted more than just areas with Mitchells & Butlers locations; they also resulted in a broader avoidance of city centers post-work and led to employees being sent home for safety.
Despite achieving overall positive results for the year, the performance varied across different segments of the business. The company recorded a robust 7.7 percent sales growth in the first quarter, which tapered down to only 2.5 percent growth in the latter part of the year.
The firm continues its extensive campaign to upgrade and rebrand venues, successfully completing 185 conversions and remodels while implementing initiatives to reduce energy costs through solar panel installations. Furthermore, six new sites were launched.
In the current financial year, net cost pressures are expected to decrease by approximately £55 million, as rising labor costs are offset by falling energy bills and a slowdown in food price inflation. Mitchells & Butlers has also effectively managed costs across its locations.
“A strong sales performance, outpacing the market, gives us confidence in achieving a full-year result at the top end of consensus expectations,” the company expressed.
Shares of Mitchells & Butlers have increased by over 40 percent in the last year, with an additional rise of 7.5p, or 2.5 percent, reaching 304.5p.
The company boasts a diverse portfolio that includes well-known brands such as Harvester, Miller & Carter, Premium Country Pubs, Sizzling Pubs, Stonehouse, Vintage Inns, Browns, Castle, Nicholson’s, O’Neill’s, Ember Inns, and Ego Restaurants, along with Innkeeper’s Collection hotels in the UK and Alex restaurants and bars in Germany.
Established in 2003 from a demerger of the former Bass brewing company, Mitchells & Butlers operates 1,716 venues. The largest shareholder, owning 55 percent, is Odyzean Group, a consortium of sports industry figures including Joe Lewis, John Magnier, and JP McManus, who collaborated on a previous bid in 2011.
CEO Phil Urban, 61, stated: “Sales growth is normalizing as inflationary cost pressures diminish, supported by our diverse range of established brands and locations that enhance our market position. We are entering the new financial year with a series of initiatives and a comprehensive capital investment program aimed at enhancing cost efficiency, boosting sales, and further increasing profitability.”
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