Mitchells & Butlers toasts record Xmas as revenues jump

Festive like-for-like sales increase 3.9% But adverse weather hits wider picture

Pubs giant Mitchells & Butlers (M&B) yesterday reported strong Christmas trading, but also highlighted a wider slowdown linked to bad weather.

The group, whose chains include Browns, Toby Carvery, Harvester and Irish-themed O’neill’s, said in its first-quarter trading update that likefor-like sales grew just under 4 per cent in the core threeweek festive trading period to 6 January.

A particular standout was Christmas Day, which saw record takings, with like-forlike sales growth of 5.4 per cent and 225,000 meals sold.

However, M&B, which has about 70 outlets north of the Border, said that in the seven weeks leading up to December, comparable sales came in just 1.6 per cent higher.

Group chief executive Phil Urban said: “We are pleased to have delivered continued strong trading results over the important festive period in the face of difficult weather for many of our guests, indicating the attractiveness of our offers in a competitive market.”

The festive bounceback came after M&B had jolted the market in November when it announced a fall in pre-tax profits to £77 million for the year to the end of September, compared with £94m a year earlier. Total revenue rose to £2.18 billion from £2.09bn.

It also warned at the time that it did not expect to pay an interim dividend in the current financial year “but will make an assessment of pay-out at the end of the year based on a full year of trading and development of the sector outlook”.

M&B said yesterday that sales over the full seven-week period since its annual results had been “encouraging”, but that it had been affected by “adverse weather particularly in the run-up to the festive season”.

Urban said the group continued to make good progress with its plans “to build a more balanced estate, in particular premiumising our offers were possible”. He added that M&B completed 114 pub “conversions and remodels” in the financial year to date “and remain encouraged by returns being generated”.

The firm last year disposed of just under 80 sites seen as not offering long-term growth potential.

M&B – whose pubs include the Sheep Heid Inn, reputedly the oldest public house in Edinburgh – has like the rest of the sector been hit by a rise in the cost of raw materials given the weakness of sterling recently.

At the annual results, Urban said it had also been suffering other “cost headwinds” including the minimum wage and business rates. Like other operators in the sector, M&B, which has 1,750 pubs and restaurants, is seen as facing pressures arising from the apprenticeship levy, discounting and the sugar tax, with the cumulative impact of putting pressure on sector profit margins.

Urban has said the priorities for this year are “building a more balanced business, instilling a more commercial culture and driving innovation”.