All Bar One owner Mitchells & Butlers logs sales rise but warns over margins
The pub chain said it benefited from England’s success in the World Cup.
All Bar One owner Mitchells & Butlers has benefited from a rise in sales but warned that its margins will fall due to rising costs.
Weekly Business Digest Newsletter
Like-for-like sales for the 43 weeks to July 28 were up 1.3%, with food sales up 0.3% and drink sales up 2.5%.
Over the 11 weeks to July 28, sales rose 0.9% on a like-for-like basis.
The pub firm said it was still facing significant cost headwinds, and expected margins to fall year-on-year, but benefited from England’s success in the World Cup.
The group has been working to offset a spike in buying costs on the back of the Brexit-hit pound.
It has still been expanding and investing in its estate, however, opening up five new outlets and completing 228 conversions and remodels of its sites in the financial year to date.
Sales performance since the half year was impacted by England’s prolonged success in the World Cup and the sustained hot weather Phil Urban, chief executive
Pubs are also expected to suffer if access to foreign workers is restricted as a result of Brexit, with the British Hospitality Association saying that around 700,000 of the hospitality sector’s 3.2 million workforce are from the EU.
Phil Urban, chief executive of Mitchells & Butlers, said: “Sales performance since the half year was impacted by England’s prolonged success in the World Cup and the sustained hot weather.
“Trading was polarised across the company, with the wet-led part of the business delivering very strong growth, but some of the more food-led formats, particularly the carvery businesses, were negatively impacted.
“However, we have been encouraged to see sales recover now that the World Cup has finished and as we continue on our longer-term journey.”
Peel Hunt analysts said that Mitchells & Butlers would benefit from rising interest rates because its debt costs are fixed.
They said the company’s strategy of repositioning the estate towards the premium end of the market was a good strategy and that investors’ patience with the firm would soon be rewarded.