Mitchells & Butlers FY lower as snow, football take toll

Adjusted profit before tax fell to £178m from £180m on a 52 week basis. Adjusted operating profits slipped to £303m from £308m.

Profit before tax increased to £130m from £77m, reflecting one-off items. The company said like-for-like sales in the first seven weeks of the new financial year were up by 2.2%.

Revenue fell slightly to £2.15bn from £2.18bn as total sales grew 0.5% on a 52 week basis. The previous year was a 53 week period. Full-year like-for-like sales growth was 1.3%.

Basic earnings per share were 24.5p against 15.1p last year. Adjusted earnings per share were 34.1p from 34.4p and no final dividend was declared.

The company also warned of the impact of Brexit on its operations.

“Aside from macro-economic consequences, the specific areas of material impact for our business are increases in costs and reduction of availability of goods, and implications of restrictions on the free movement of labour,” Mitchells & Butlers said.

“Currently across our business, 13% of staff are non-British EU nationals, with the proportion fluctuating by geographic region. We remain close to these issues whilst we await further details.”

The company said market trends indicated customers were eating out less but spending more when they did. It added that Brexit and stagnant growth in real wages were hitting consumer confidence.

“The eating out industry has faced a number of challenges over recent years. The number of restaurants in the UK increased by 11% over the past five years, outstripping demand growth and resulting in pressure on sales per site across the sector,” Mitchells said.

“In the 12 months to September 2018, the number of restaurants in operation in the UK fell by 1% reflecting the competitive pressure in this highly fragmented sector.”