Mitchells & Butlers (M&B) has hailed the speed of delivery on its strategy to convert to a food-led estate as it reported "very encouraging" like-for-like sales in its retained estate.
The managed operator reported like-for-like food sales in its retained estate — excluding the disposals of 333 non-core pubs, Lodges and Hollywood Bowl — rose by 4.4% on last year to 18 September.
In that period, like-for-like food sales grew 7.1% and drinks by 2.2%
For the 51 week period, company like-for-like sales growth was 2% up on last year with like-for-likes up 2.8% for the retained estate.
In addition to the £500m from major disposals, M&B has sold or exchanged contracts on £54m of disposals, mainly from the sale of 44 individual pubs, at an average EBITDA multiple of over 15.
Net debt will be approximately £2.3bn at the year end but that excludes proceeds from the sale of 333 non core pubs to Stonegate Pub Company, expected at the end of November. Drawings on its medium term unsecured facility are currently around £260m.
Capital expenditure for the current year is expected to be around £131m with approximately £20m on expansion projects, including 54 conversions within its existing estate. EBITDA returns on the conversions opened over the last two years continue to be above 25%.
Incluidng its recent acquisition of 22 Ha Ha Bar & grill venues, M&B has acquired 35 sites with a further 10 agreed. It has earmarked a further £200m for single site and small package acquisitions and conversions to one of its core brands.
"The company has quickly implemented the first phase of its commitments outlined in the March 2010 strategic review and is now seeking to reinvest the proceeds in line with our stated strategy," it said.
Chief executive Adam Fowle said: "This is a very encouraging performance, particularly given the present consumer economy, and underlines the strength of the Mitchells & Butlers business. I am pleased at the speed of delivery on our strategic plan."