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Mitchells & Butlers PLC on Thursday said it was ‘confident’ its full-year results will be at the upper end of market consensus, following fourth-quarter sales growth ‘ahead of the market’ despite a challenging sales environment. The Birmingham, England-based company is an operator of restaurants and pubs, owning chains such as Harvester, All Bar One and O’Neill’s. It announced a 5.2% like-for-like sales growth in the 51 weeks to September 21, as total sales in the year to date have reportedly increased by 5.9%. Food sales were up 5.3% for the year to date whilst drink sales were up 4.9%. Fourth quarter growth of 2.5% was ‘ahead of the market’, and reflected ‘a progressive easing of the inflationary environment, as well as an unseasonally cool and wet summer period and the disruption caused by riots in city centres during August’. By comparison, the company’s first-quarter saw a 7.7% sales growth, its second quarter reported a 6.1% sales growth and sales in the third quarter grew by 3.4%. The company said net cost headwinds will reduce to circa £55 million for the full-year, with increases in labour costs ‘substantially mitigated’ by energy cost deflation, slowing food cost inflation and strong cost control at site level. In the year to date, Mitchells & Butlers have completed 185 conversions and remodels, and opened six new sites. It has also rolled out initiatives targeting energy usage, such as introducing the use of solar panels and sensors in existing sites. It remains ‘confident’ in delivering full-year results at the upper end of consensus expectations. Broker Shore Capital has forecasted revenue of £2.74 billion and adjusted pretax profit of £198.9 million for financial 2024. Chief Executive Phil Urban said: ‘Sales growth has continued to normalise as inflationary cost pressures ease whilst our diverse portfolio of established brands and advantaged estate locations underpin our outperformance against the market. We enter the new financial year armed with a fresh wave of initiatives under our Ignite programme and a full capital investment programme planned to deliver cost efficiencies, increased sales and to further drive market out-performance and increasing profitability.’ Mitchells & Butler’s financial year-end is on September 28, and the company is due to release its annual results on November 20. Shares in Mitchells & Butlers were up 3.0% at 306.00 pence each in London late Thursday morning. Copyright 2024 Alliance News Ltd. All Rights Reserved.
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