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Mitchells & Butlers sees flat half year profits but food volume growth

Published:  22 May, 2014

Bar and restaurant chain Mitchells & Butlers has seen a sluggish first half, with pre-tax profits flat at £68 million and like for like sales up 1.1%.

Bar and restaurant chain Mitchells & Butlers has seen a sluggish first half, with pre-tax profits flat at £68 million and like for like sales up 1.1%.

The group's revenues for the 28 weeks ended April 12, 2014 grew by 2.5% to £1.016 billion thanks to an improvement in volumes and operating profit was up by 2.1% to £147 million.

Mitchells & ButlersAll Bar OneMitchells and Butlers first half of the year was relatively sluggish compared to some of its rivals, although lfls were up 1.1%.

The group, which operates around 1,600 sites across brands including All Bar One, Browns and Toby Carvery, said a turnaround in volume performance on food and drink accounted for the changes. Like-for-like food volume growth moved to +0.2% in H1 2014 from -4.7% in H1 2013. Drink volumes stabilised to -0.3% in H1 2014 from -6% in H1 2013.

Chief executive Alistair Darby, said: "We are pleased with our trading performance in this first half, particularly the turnaround in volumes, alongside which we have made good progress against our key priorities, and continued to position Mitchells & Butlers for sustainable long-term future growth.

"Successful resolution of the recent triennial pensions valuation, which we are announcing today, provides greater visibility and certainty over future funding and cash flow, at an affordable level.

"Our business transformation is gaining momentum. Through our clearly laid-out strategy, we are well-placed to take advantage of the economic recovery across the UK."

Mark Brumby, managing director of analyst firm Langton Capital, said: "Despite something of a rally yesterday, M&B's shares have slipped considerably since hitting their recent highs of around 490p towards the end of Q1 this year.

"The recent underperformance has been partly because, with most operators out-performing the Peach Tracker, there had to be some underperformers and, as M&B is the largest contributor to the survey, that honour fell to them."

Brumby added that "the operator is well-run and, though it may lack a bit of pizzazz, it is hard to put one's finger on just what it should be doing differently".