- Return to full-year profit
- Sales back above pre-Covid levels
- Cost inflation of 10-12% expected in current year
Pubs, bars and restaurants group Mitchells & Butlers (MAB) achieved a significant milestone with its latest full year results showing sales back above pre-Covid levels.
The market was certainly impressed by the numbers, and by news that like-for-like sales were up 6.5% in the first 10 weeks of the current financial year, as the shares were marked 5.7% higher to 150.1p.
The owner of the All Bar One chain returned to profit in the 12 months to 24 September as revenue more than doubled from £1.07 billion to £2.21 billion.
Pre-tax profit came in at £8 million, from a prior-year loss of £42 million, although margins were squeezed by higher operating costs which jumped from £885 million to £1.84 billion. For the current financial year Mitchells & Butlers expects cost inflation of between 10% and 12%.
‘FOG OF THE BALANCE SHEET STRUCTURE BEGINNING TO LIFT’
Without the impact of higher utility bills, the company noted it profit would have broadly recovered to levels seen before the pandemic.
‘Combined with our diverse portfolio of well-known brands, value proposition, strong estate locations and talented people, we are well positioned to face both the challenges and opportunities ahead,’ said chief executive Phil Urban.
Shore Capital analyst Greg Johnson commented: ‘Given the cost pressures, we had expected downward pressure to our financial year 2023 EBIT (earnings before interest and tax) estimate of £214 million, although the strength of current trading and the better-than-expected outturn in financial year 2022, should provide some support.
‘Net debt was also better than we had forecast, down £10 million to £1.68 billion (including leases), with the fog of the balance sheet structure, including the pension, beginning to lift.’
