M&B lines up 45 acquisitions

Mitchells & Butlers (M&B) has 45 site acquisitions in its property pipeline as it seeks to double the size of its six core brands.

The company is set to buy 22 Ha Ha Bar & Grill venues but also has 23 other sites with heads of terms agreed or exchange of contracts having taken place.

Chief executive Adam Fowle said the 23 other sites are split 60% leasehold and 40% freehold.

The cost per site will average around £1m, which compares to the £2-3m M&B has spent, on average, opening a freehold suburban pub in the past.

Fowle said: "The capital cost of a retail park lease is a lot lower and solus pubs and distressed pub acquisitions are costing a lot less than they used to."

Fowle said he expected at least 50 acquisitions of single sites and small packages next year at a cost of around £50m.

M&B's first major acquisition, Ha Ha Bar & Grill, has surprised some by being outside of its six core brands — the sites will be converted to All Bar Ones and Browns.

"The first opportunity that came along seemed to slide into two of our smaller brands," said Fowle.

"Nothing would delight us more than seeing some of the smaller brands grow as much as they can."

M&B revealed its 7% food sales growth has taken food turnover to 47% of total sales in its retained estate.

Food sales growth had been achieved largely through "tickling people up the menu" — encouraging customers to order two courses rather than one.

Fowle also reported that TV advertising for a number of the brands had "worked well" and would be repeated next year to the "same level of intensity".

City analysts were also told this morning that its value segment was "not struggling but doing as well" as its Suburban and City segments.