M&B sales growth slows
Mitchells & Butlers (M&B), the UK's leading managed pub operator, has reported a slowdown in like-for-like sales for the nine weeks to 16 July, as consumer spending weakened.
The company, which made no announcement on its chairman or chief executive positions, said that like-for-like sales increased 2.8% for the nine weeks, driven by a 6.9% rise in like-for-like food sales, which offset a 0.8% decline in drink sales.
However, this was set against a 3.3% rise in like-for-like sales for the 33 weeks to 14 May, driven by a 5.5% increase in food sales and a 1.8% climb in drink sales.
It said that it estimated that the underlying like-for-like growth trend had softened to around 1% over the nine weeks to 16 July.
The c.1,600-strong group said the recent performance was set against weaker comparable results during the same period last year, which were impacted by the football World Cup.
On a like-for-like basis, sales in 42 weeks to 16 July were up 3.1%, driven by a 5.8% increase in food sales and a 1.2% increase in drink sales.
The group said that total sales in the 42 weeks were down 9.3%, although total sales across its retained estate, which excludes the dilution from major disposals made in the last 12 months, were up by 4.7%.
Economic pressures
It said that it expected its retained estate operating margins to be slightly below last year as a result of: "continued input cost pressure; increased promotional activity; and the implementation of a number of new sales and operational initiatives".
The company said that cash flow from operations remains strong and that it was on track to invest approximately £75m into expansionary capital projects during the current year with expected returns of approximately 20%.
It said that its net debt remained at approximately £1.9bn.
The company said: "Economic pressures continue and consumer expenditure in our market has weakened in the last couple of months with the short term outlook remaining uncertain.
"Despite these near term challenges, our long term focus remains on strengthening the business, lowering costs, driving sustainable revenue and improving customer experience as we better utilise our well placed sites and brands."
