Mitchells & Butlers reports drop in third quarter sales

Pub operator Mitchells & Butlers reported on Wednesday a 0.7% drop in total like-for-like (LFL) sales in the third quarter, blaming wet weather in June and the Euro 2016.

The owner of O'Neill's and All Bar One pubs said food LFL sales declined 1.5% in the 15 weeks to 23 June, while drink LFL sales rose just 0.2%.

Total LFL sales in the first 43 weeks of the financial year fell by 1.3%, including a 1.8% decrease in food sales and a 0.9% dip in drink sales.

However, the group expects to see an improving trend, supported by recent investments in opening new sites and renovating old ones. Mitchells & Butlers has opened five new sites and remodelled 232 sites so far this financial year. It expects to complete about 250 conversions and remodels in the full year.

"Underlying trading has improved in recent months, particularly when taking into account the negative impact of Euro 2016 and the wet weather seen in June,” said chief executive Phil Urban.

“This reflects the good progress we are making across our three priority areas: to rebalance the business, to instil a commercial culture and to increase the pace of execution and innovation.”

Urban noted the economic uncertainty following the UK’s vote to leave the European Union on 24 June, saying there could be potential implications for consumer demand. “We are monitoring developments closely, but remain confident that our previously outlined strategy, based on a strong freehold estate and brand portfolio, remains appropriate to deliver long-term sustainable shareholder value."

Shares fell 0.57% to 244.60p at 0913 BST.