Mitchells & Butlers' 'robust performance'

April 9, 2008: Mitchells & Butlers has reported "resilient sales growth and robust operating profits performance" in its half-year trading update.

This has been achieved amid challenging trading conditions for beer sales but increased eating out demand in pubs following the smoking ban, says the company.

Same outlet like-for-like sales were up 0.6% in the first 27 weeks. Food sales have been buoyant and now account for 38% of sales, with same outlet like-for-like sales growth up 4.8%.

The company said that the smoking ban has widened the appeal of the pub, especially to consumers who previously did not eat out due to tobacco smoke. "The quality and value of our food offers, together with our high standards of amenity, have enabled us to gain a disproportionate share of this growth. As a result, we have further extended our leadership of the on-trade eating out market, serving over 110 million meals on an annual basis.

" In drinks, we have held same outlet like-for-like drinks sales to a decline of 1.4%, representing a further substantial gain in drinks market share relative to the fall in on-trade beer market volumes of 9%. Good growth has been generated in sales of soft drinks and wine as a result of the food sales uplifts."

Same outlet like-for-like sales in pubs in residential areas are up 0.8%, with a particularly strong performance from the Pub Restaurant brands, which have benefited from new menus. Food sales growth in Locals Pubs has been up 9.3%, although drinks sales have seen some negative impact from the smoking ban over the winter months.

In the High Street, same outlet like-for-like sales have grown 0.5%, with strong growth in Central London, a good performance from High Street pubs in the rest of the UK, but significant pressure on late-night venues.

Trading in the Scottish estate in the second year of the smoking ban there is showing good growth, with same outlet like-for-like sales up 3.5% in the 27 weeks of this financial year. This increase has been generated by significant food growth — up 7.1%, combined with a positive drink sales performance up 1.8%.

The company added: "The acquired sites conversion programme has been rapidly implemented and is nearing completion with 196 sites converted to our brands and formats. Taking into account conversions to our franchise model and disposals, there remain only seven sites to be converted.

"Initial, post-conversion average weekly sales uplifts are running at 19% above the levels at which the sites were acquired. We will be continuing to develop the trading performance of these high-quality sites in order to deliver our three-year target of 30% sales uplifts by the end of the 2009 financial year."