The pub, bar, and restaurant operator reported record outperformance against the market, with strong lfl performance across all brands.
Total revenue was £2,503m against £2,208m the previous year. Operating profit was £98m (FY22: £124m), impacted by property portfolio valuation movements and £52m of government support in FY22, with adjusted operating profit increasing 17.6% net of government support.
M&B further reported net debt is reduced to £1,170m from £1,198m, excluding £463m of IFRS-16 lease liabilities. It refinanced its revolving credit facility to July 2026 and increased it by £50m to £200m.
Cost headwinds
M&B chief executive Phil Urban said: “We are delighted by the continued strength of our trading performance, and resilience in the face of unprecedented cost headwinds. We have achieved good growth in underlying profit, excluding government support, with like-for-like sales growth across all of our brands, and record outperformance against the market.
"Whilst we remain mindful of the pressures that the UK consumer is facing, the strength of our sales growth alongside an abating cost environment gives us confidence for the financial year ahead."
Lfl sales growth in Q1 FY23 was primarily driven by drink sales, with sales remaining resilient in Q2 and strong performances on key trading dates in drink-led, city centre pubs, especially London, that benefitted from a return to the office.
Despite a wetter, cooler summer, all brands continued to be in lfl growth and supported by sustained growth in both food and drink volumes in H2.
M&B’s completed acquisition of currently 29-strong Ego Restaurants in June 2023 will provide synergy and rollout opportunities, with scope for c20-30 conversions using the Ego format over the next three to five years.
Strategic priorities
Since period end, the business has seen lfl sales growth of 7.2%, with performance broad-based across the brand portfolio and underpinned by stable volumes.
It is seeing “clear evidence” that cost headwinds are starting to abate, with overall headwinds for the year ahead expected to reduce to c£65m due to lower energy prices and slowing food inflation, despite the National Living Wage increase.
“The uncertainty and cost challenges the industry has faced have had an unavoidable impact on market supply. Independent and tenanted businesses have made up the substantial majority of the net closures. Given our strong estate and portfolio of brands, we believe that we are well placed to continue to benefit from these changes in the competitive landscape.
“We are working hard to continue to drive sales growth above the market, whilst both leveraging our buying power and further enhancing the efficiency of our business. This allows us to face the future with a renewed level of confidence.
“We will remain focused on our strategic priorities delivered through our Ignite and capital programmes, which combined with our diverse portfolio of well-known brands, strong estate locations and talented people, leave us well positioned to rebuild margins back towards pre-pandemic levels.”
