Shares tumble as Mitchells & Butlers may scrap dividend
ALL BAR One owner Mitchells & Butlers has seen its shares plunge after warning it could scrap its next shareholder dividend payout on the back of lower profits and said it faced further risks amid Brexit uncertainty.
The pub group, which also owns Harvester, reported a fall in pre-tax profits to £77m for the year to September 30, compared to £94m the previous year.
It comes as the company works to offset a spike in buying costs on the back of the Brexit-hit pound, saying it expects those pressures to continue into the next financial year.
Chief executive Phil Urban said: “Cost headwinds across the industry have adversely affected margins but we continue to work hard to mitigate as much of these as possible through our focus on efficiency and profitable sales growth.”
Mitchells said its efforts have successfully mitigated “£26m of the inflationary cost headwinds which we faced in the past year”, and announced it was launching a “second phase of initiatives” to try and counter those pressures.
Investors were focused on plans to scrap the next interim dividend amid growing uncertainty, with Mitchells & Butlers saying the decision was “pending assessment at year end of capital allocation and prospects”.
The company said there were “unprecedented cost headwinds” facing the industry, as well as “political uncertainty domestically and surrounding the impact of leaving the European Union”.