Snow fails to dampen confidence at M&B

SNOW and economic woes failed to put a dampener on Christmas and New Year revelry at pubs and restaurants operated by Mitchells & Butlers, with the Birmingham pubco announcing a 6.7% sales growth during the crucial period.

Outside of the festive window the company said the weather had had some adverse impact but generally sales were still up.

The picture is in stark contrast to the rest of the service sector, which has blamed the severe weather in December as a major factor in declining levels of business.

In a statement ahead of its annual general meeting, the company said total sales across its retained estate rose 3.9% in the first 17 weeks of its financial year, with like-for-like sales up 3.1%.

In the most recent nine weeks trading, like-for-like sales were up 2.5%, inclusive of a weather-related blip.

In October and November, the group completed the acquisition of 22 Ha Ha Bar & Grill sites and the sale of 333 pubs to the Stonegate Pub Company, following which the group reduced its net debt by around £2bn.
 
A trial project involving opening two Harvester outlets on retail parks was said to have been “encouraging” and the company is rolling out plans to open 50 of the outlets at new sites this year. It is also planning to convert 70 existing pubs to the Harvester brand.

Adam Fowle, M&B chief executive, in a bullish message to shareholders said: “This is a very good start to the year with like-for-like food sales up 6% helped by a strong Christmas performance.  These trading results, together with the encouraging performance from the two new Harvester retail park sites and the improving new openings pipeline, show that we are on track to implement our growth strategy and indicate the future potential within the business.”

In outlook, the company said the business continued to perform well, although it was cautious on possible future trends due to a reduction in discretionary spend and input cost increases.

“Overall, our operational performance together with our market leading brands and a rapidly increasing new site pipeline gives the Board confidence in the future prospects for Mitchells & Butlers,” said the statement.

M&B chairman John Lovering announced earlier this week that he is to stand down from the post after less than a year at the helm.

The company will seek to replace him while plans are also in place to appoint additional non executive directors to the board.

The move could trigger debate at the AGM although the company will be hoping for a calmer event than last year when a row between majority shareholders and then-chairman Simon Laffin, resulted in the latter being ousted from office.