Mitchells & Butlers offers "so-so" festive trading update

By Gemma McKenna

Published: 29 January, 2015

All Bar One operator Mitchells & Butlers had a "good" festive season with sales up 4.8% in the two weeks of Christmas and New Year, but margins weakened over the period.

The group, which operates 1,700 sites across the UK, said year-to-date sales have grown 9.1%, with like-for-likes up 1.7% for the 17 weeks ended January 24, 2015.

M&B M&B traded well on key dates over Christmas, but margins are downFood sales drove the group's performance, but slower drinks sales hit margins, with one analyst calling the update only

Strong trading on key dates over Christmas helped boost the performance, with Christmas day seeing lfl growth of 7.1% and more than 200,000 meals sold.

The group said the "higher level of sales is supported by growth in food volumes. Margins continue to be weaker than last year due to a number of factors including the planned integration of the Orchid business and the careful approach which we have adopted to pricing in a demanding consumer environment".

Alistair Darby, chief executive, said: "We are pleased to have delivered a good trading performance over the important festive season. As we now move into the more difficult winter trading period we continue our focus on growing our business through increased volumes, upgrading infrastructure and further improving staff turnover and net promoter scores. The Orchid integration plan is on track and we are encouraged by the early trading performance of the converted sites."

Analyst Mark Brumby of Langton Capital described the update as "so-so", saying that while growth was better than last year "growth over the whole 17 weeks under review is slower than it had been in the first eight weeks and, as Xmas was strong, this implies that the rest of December and January to date have not been good".

He added that margins will be down, saying this was "in line with our understanding of what is going on regarding discounting but may be perhaps a little disappointing overall".

Mitchells & Butlers' brands include Harvester, Toby Carvery, Country Pubs, Sizzling Pubs, Browns, Miller & Carter, Castle, Alex, Nicholson's, O'Neill's and Ember Inns.

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