All Bar One
All Bar One-owner Mitchells & Butlers said overall cost pressures are ‘abating’ / Image source: Adobe
  • Robust trading continued in Q1
  • Record Christmas day sales
  • PBT to be towards top end of expectations

All Bar One-to-Toby Carvery owner Mitchells & Butlers (MAB) expects pre-tax profits for the year to September 2024 will come in towards the top end of consensus estimates after sales picked up over Christmas with a boost from the return of work parties and festive gatherings.

The pubs company, whose brands also include Harvester and O'Neill’s, said that notwithstanding the upcoming increase in the National Living Wage, overall cost pressures are ‘abating’.

This will help rebuild margins and the FTSE 250 firm remains confident of growing its profitability and market share in the year ahead.

Yet despite the latest upgrade, Mitchells & Butlers’ shares softened 1% to 253p in a classic case of ‘better to travel than to arrive’, having already rallied more than 50% over the past year.


Mitchells & Butlers reported like-for-like sales growth of 7.7% for the 15 weeks to 13 January 2024, an acceleration on the 7.2% seen over the 8 weeks to 25 November 2023, with food sales modestly outperforming drink sales in the company’s first quarter.

Like-for-like sales were up a tasty 10.1% over the five key festive days as consumers treated themselves to an affordable pub visit and the hospitality industry benefited from lower levels of rail strikes versus the previous year.

Mitchells & Butlers continues to focus on investment into its estate, having already completed 34 conversions and remodels in the financial year-to-date, and said it remains ‘encouraged’ by the returns being generated.

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CEO Phil Urban said he was ‘delighted’ by the strong trading performance over the festive season, ‘with very strong performances across our brands portfolio thanks to the hard work of our teams. Growth was particularly strong on key dates, with record sales for Christmas day based on 229,000 meals served, supported by strong trading in the run up to Christmas, with the return of work parties and festive gatherings driving sales.’

Liberum Capital reiterated its ‘buy’ rating following the update. ‘Costs pressures are abating, and the company now expects a full year outturn towards the top end of expectations,’ said the broker.

‘We are already there with EBIT of £276.2 million for FY24E (consensus range £255 million to £290 million), so leave our numbers unchanged today but margin upside remains.’

Despite the impressive festive showing, Shore Capital has a ‘hold’ rating on Mitchells & Butlers, the broker’s key concern being the group’s ‘cash conversion and ability to meet mandatory bond repayments out of internal cash generation. A better profit outturn would be expected to see cash flow improve demonstrably and getting closer to covering repayments out of cash generation, freeing up cash flow for shareholders. Reaching such a milestone could see us turn more positive on the investment case.’


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Issue Date: 17 Jan 2024