M&B reports "resilient" first half sales

Despite withering criticism over its botched property joint venture, managed pub operator Mitchells & Butlers (M&B) has claimed "resilient sales growth" and "robust operating profits" in the first 27 weeks of the current financial year.

While under fire on a number of corporate fronts, the group said it had achieved the operating performance despite issues such as the smoking ban and low consumer confidence, with "good, value for money offers and high standard amenities in our pubs attracting new customers".

In a pre-close trading update issued today M&B said same outlet like-for-like sales were up 0.6 per cent, while same outlet food sales had increased 4.8 per cent, and drink declines "limited to 1.4 per cent".

The group normally doesn't issue such updates, a spokeswoman said, "but we wanted to provide as much transparency on our trading as possible as we prepare to issue our formal interim statement on May 20 and the results of our strategic review".

M&B noted that the 27 week period included the two Easter trading weeks this year and one week of the comparable Easter in 2007, resulting in a "small favourable benefit to like-for-like sales arising despite this year's poor weather over the holiday period".

It said on an annualised basis food sales now accounted for 38 per cent of overall sales, while beer represented a quarter of the group's turnover.

M&B's residential pubs had seen same outlet like-for-likes up 0.8 per cent (uninvested down 1.5 per cent), while high street sites saw same outlet like-for-like growth of 0.5 per cent (uninvested up 0.2 per cent), with central London particularly strong. M&B also noted that it had seen "significant pressure" on its late night venues.

Sales in Scotland were up 3.5 per cent, while progress in the group's conversion programme of the sites acquired last year from Whitbread meant there were only seven pubs yet to be converted to M&B brands, with 196 completed.

Although it conceded that net pre-exceptional financing costs would be higher in the first half of this year than the same period in 2007 - thanks to the now infamous hedging losses - M&B said its operating cash inflows remained strong.

It said it had also sold £50m-worth of assets in the period. Consequently net debt had fallen by approximately £100m to £2.8bn.

No further financial details of trading were released, due to the group being in an offer period, the spokeswoman added

The group said its strategic review "remained on schedule "and we will announce the conclusions by the time of our interim results on 20 May".

M&B's shares were this morning up 7p at 335.25p.