Pub chain turns corner as sales exceed pre-Covid level
MITCHELLS & Butlers says it is poised to return to profit and regain the momentum it lost to the pandemic.
The pubs giant’s sales are now running above pre-Covid levels.
It said that for the 12 months to September 25 it generated revenues of £1.1billion – a fall of 27.8 per cent on the same period last year.
MAB made a pre-tax loss of £42million, compared with £123million in 2020, due to the £122million cost of servicing its £1.8billion net debt, as well as a number of oneoff costs.
However, the pub operator is confident that it has turned the corner as it is generating positive cashflow again and trading profitably at the operating level.
It added that since the end of its 2021 financial year, sales are running 2.7 per cent higher than they were for the same period in 2019.
Chief executive Phil Urban said the business environment remained “challenging” due to the pandemic and rising cost of staff, energy and food and drink.
However, he is confident that the increased demand it is seeing will support its return to profitability. He said: “Despite the inevitable challenges faced by our business over the past year we are now well positioned to regain the momentum previously built as we come out of the pandemic.
“Demand for our well-loved brands has been demonstrated by an encouraging return to sustained like-for-like sales growth since restrictions have been lifted, and we are confident in our ability to continue our recovery as a marketleading operator.”
Hargreaves Lansdown analyst Matt Britzman said “investors will need to remain patient”.
He added: “It has agreed to not return any cash until at least January 2023, which should mean the balance sheet continues to improve even if capital expenditure rises. But there’s a long road ahead, and progress needs to continue over what could be a tough winter period.”
Best known for its All Bar One, O’Neill’s and Harvester brands, MAB also has Nicholson’s, Browns, Toby Carvery, Stonehouse and Sizzling Pubs.