Pubcos reflect on impact of World Cup

WEST Midlands-based pub companies have issued their first trading statements since the World Cup.

Birmingham-based Mitchells & Butlers (M&B) said the tournament had an impact on food and drink sales but Wolverhampton’s Marston’s said the World Cup effect was broadly neutral.

In its third quarter interim management statement, M&B revealed total sales growth in the quarter was 3.8%, bringing growth in the first 42 weeks to 2.9%.
 
“Over the third quarter like-for-like food volumes continued to increase, although sales remained flat as we held prices and saw a decrease in food spend per head. This reflected a weak eating and drinking out market in the UK during May and June, exacerbated for restaurants by the impact of the football World Cup,” it said.

“In the last few weeks we have seen an improvement in demand, particularly for food, from these levels.”

During the period M&B acquired 173 outlets from the Orchid Group.

“The acquisition is in line with our strategy to focus on long-term growth in the eating-out market and provides significant opportunity for sales and margin growth through both the conversion of selected sites to Mitchells & Butlers brands, and through cost synergies from the combination of support functions,” it said.
 
“Integration is progressing well and we remain confident that the acquisition will be immediately enhancing to adjusted earnings.”
 
Also during this period M&B reached agreement on the triennial valuation of the group pension schemes as at 31 March 2013, including a funding shortfall of £572m and a revised schedule of contributions.

As a result net balance sheet pension liabilities have increased by c£200m after tax.
 
In addition to the Orchid transaction, the pubco has opened 20 new sites and converted eight sites so far this financial year.
 
Alistair Darby, chief executive, said: “Despite the slowdown in the UK eating and drinking out market during May and June, we remain confident in our well established strategy. 

“We have continued to achieve growth in food volumes, further improvements in staff turnover and a strong Net Promoter Score – all key lead indicators of long term success.
 
“This is an exciting time for our business as we start the integration of the high quality Orchid estate, which we believe will accelerate our growth and create significant value over the long term.”

Meanwhile, in its interim management statement for the 41 weeks to July 19, fellow pubco Marston’s said: “We have continued to make good progress in line with our expectations. 

“The impact of the World Cup was broadly neutral, with higher drinks sales offset by weaker food performance in our pubs, and strong sales growth in the off-trade.”
 
In destination and premium, like-for-like sales for the 41 week period were 4.1% ahead of last year, including like-for-like food sales growth of 4.2% and like-for-like wet sales growth of 3.5%. 
 
In taverns, like-for-like sales for the 41 week period were 3% ahead of last year. 
 
In leased, like-for-like profits for the 41 week period are estimated to be up 3% compared to last year.
 
In brewing, own-brewed beer volumes were up around 1% compared to last year including 10% growth in off-trade volumes during the World Cup.
 
Ralph Findlay, chief executive officer, said: “We have continued to make good progress in implementing our strategic priorities with our focus on investment in new pub-restaurants, the expansion of franchise and the continued development of our premium beer portfolio all contributing to our growth targets. 

“We remain confident of achieving our expectations for the full year.”