Inflationary pressures put the squeeze on pubco
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Birmingham-based pubco Mitchells & Butlers has warned margins for the full year will be below last year due to inflationary cost pressures.
Beer sales at its pubs were down in the eight weeks to September 16, although for the full year to the same date showed a 2.1% improvement on last year.
Total sales, which comprise food and drink, were up 1.8% – food sales showing a 1.4% improvement.
In a pre-close update, the group blamed poor weather in August and September for the decline in drink sales.
It said: “Following a strong sales performance in early summer the market has been more challenging in recent weeks, particularly given poor weather this year up against a sunny period last year which has specifically impacted drink sales.
“Encouragingly like-for-like sales growth continues to be ahead of the market. Total sales have increased by 2.9% in the year-to-date.”
Phil Urban, M&B chief executive, said the sales growth had outperformed the market.
“This performance reflects the progress we have made towards our strategic priorities. We continue to work hard to mitigate the cost headwinds faced by the industry and expect to deliver a full year performance in line with the board’s expectations.
“We will enter the new financial year with the momentum of solid sales growth, enhanced clarity on pension contributions and a clear strategy which we believe positions the company well to deliver long term shareholder value.”
During the year, the group opened 13 new sites and completed 236 conversions and remodels. It disposed of 79 sites which did not fit into its long-term estate plan – 73 of which were sold as a package which completed in July with the remainder sold individually. The proceeds from disposals total £46m which is marginally above the net book value of the properties.