Mitchells & Butler has reported Full Year Results for the 52 weeks ended 27 September 2014, with Alistair Darby, Chief Executive, commenting:
“In the last year we have made significant progress, investing in the business for future growth. We completed the acquisition of Orchid, accelerated remodel and expansionary capex and have made a substantial investment in our systems. At the same time we have maintained our focus on the delivery of our four key priorities. In the year ahead, we will continue these actions.
“The business is gathering momentum and we have made an encouraging start to the year. We expect to benefit further from these investments during this financial year.”
Douglas Jack of Numis comments:
“With a high quality estate and a double-digit free cash flow yield, M&B’s shares are undervalued, in our view. The catalyst for a re-rating is reliant on improving product range, service and amenity driving up LFL sales, margins and returns. There are early signs of this, with LFL sales up 2.4% during early 2015E.”
Financial performance
- Total revenue of £1,970m, up 4.0%
- FY 2014 like-for-like sales growth of 0.6%
- Like-for-like sales growth of 2.4% in the first eight weeks of FY 2015
- Operating profit before exceptionals of £313m, up 1.0%
- Net pensions finance charge of £10m (FY 2013 £11m) reclassified into underlying profit before exceptionals with restatement
- Earnings per share before exceptionals of 32.6p, up 1.2%
- Net cash outflow of £(199)m
Reported results
- Profit before tax: £123m (FY 2013 £142m)
- Basic earnings per share: 22.6p (FY 2013 31.2p)
Balance sheet and cash flow
- Capital expenditure increased to £162m (FY 2013: £128m), including 23 new site openings and 8 conversions
- £258m cash invested in the acquisition of 173 largely freehold, well-located pubs from the Orchid Group in June
- Net debt of £1.96bn representing 4.5 times annualised EBITDA
Operational highlights
- Strengthening food volume performance: like-for-like food volume growth +0.9% (FY 2013 -4.3%)
- Operating margin 15.9%
- Staff turnover at historical low of 78% and net promoter score growing strongly to 63% (FY 2013 59%)
- Remodel programme generating strong returns
- Executive team strengthened
About Mitchells & Butlers
Mitchells & Butlers is the UK’s largest operator of managed restaurants and pubs, serving around 135 million meals and 435 million drinks each year. It is one of the largest operators within the UK’s £78 billion eating and drinking out market.
Its portfolio of brands and formats includes Harvester, Toby Carvery, Country Pubs, Sizzling Pubs, Crown Carveries, Oak Tree Pubs, All Bar One, Browns, Miller & Carter, Castle, Alex, Nicholson’s, O’Neill’s and Ember Inns.
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