Eating-out decline takes 7pc off pub chain’s stock
ShareS in Mitchells & Butlers dived yesterday after the pub owner put its dividend payment on ice.
The firm, which owns harvester, all Bar One and Toby Carvery, said economic and political uncertainty in the UK forced it to cancel its next payment.
Full- year profits dropped to £77m from £94m the year before, despite a small uplift in sales to £2.2bn, from £2.1bn.
Mitchells & Butlers recommended a final dividend of 5p per share but did not recommend an interim dividend for the current financial year, saying it would review the full-year payment once it had assessed its options.
Phil Urban, chief executive, said: ‘The consumer environment is changing, with people eating out less frequently but spending more when they do make the decision to go out.
‘In addition, although restaurant supply growth has steadied over the last year the market remains highly competitive and, as a result, levels of discounting appear to be increasing in some segments.’
his comments come after the firm posted a 9.6pc drop in halfyear profits in May, blaming the rising minimum wage and fragile consumer confidence.
at the time it said Brexit had caused customers to rein in spending while the oversupply of casual dining outlets had led to heavy discounting.
Yesterday, its shares dropped 6.6pc, or 17p, to 241p as a result, pushing down rivals Marston’s, which fell 2pc, or 2.1p, to 101.9p, and Greene King, which slipped 1.7pc, or 9p, to 509p.
Newcomer The City Pub Group bucked the trend, with shares up 6.5pc, to 181p, from its placing price of 170p.
The company, which listed on aIM yesterday, operates 34 public houses across London and the south of england.
It successfully raised £ 35m, which was £5m more than originally proposed, valuing the business at £96m.
It now plans to double the size of its estate in three to four years.
The FTSE 100 finished down 0.02pc, or 1.78 points, to 7417.24 while the FTSe 250 finished down 0.04pc, or 7.81 points, to 20,006.05.
Biotech firm Angle soared 7.5pc, or 3p, to 43p after securing a new contract with Philips.
The company, which makes devices for people to capture cancer cells, is teaming up with Philips to develop a treatment for breast and rectal cancer.
Premaitha Health increased by 17.1pc, or 0.75p, to 5.12p, after it secured a new agreement with an east asia partner.
The surge was a bounceback for the company, which slipped on Tuesday following a disappointing judgement by the UK court regarding patents.
Shares in h&M suit maker Bagir shot up after a Chinese rival took a 54pc stake in the business.
The purchase, by textile firm and aquascutum owner Shandong ruyi, worth £14.7m, sent shares in the company rocketing 90.9pc, or 1.25p to 2.62p.
Bagir was set up 56 years ago and counts Marks and Spencer among its past customers.
ruyi is apparently eyeing up Bagir’s lucrative business in ethiopia, where low labour costs allow it to produce garments cheaply.
The new funds will be used to extend the trouser suit business in the region, and establish jacket production lines in ethiopia’s duty-free manufacturing base.
eran Itzhak, chief executive, said: ‘With Shandong ruyi Group as a key shareholder and partner we believe that Bagir will be best placed to exploit the opportunity presented by our ethiopian manufacturing base far quicker and with more certainty than we could independently.’