Mitchells and Butlers has reported on trading for the 17 weeks ended 24 January 2015.
Year to date total sales have increased by 9.1%, with like-for-like sales growth of 1.7%. The festive period saw a good trading performance, with like-for-like sales growth of 4.8% in the two weeks of Christmas and New Year. Trading was especially strong on key dates, and in particular Christmas Day, which saw like-for-like sales growth of 7.1% and more than 200,000 meals sold.
Alistair Darby, Chief Executive, commented:
“We are pleased to have delivered a good trading performance over the important festive season. As we now move into the more difficult winter trading period we continue our focus on growing our business through increased volumes, upgrading infrastructure and further improving staff turnover and net promoter scores. The Orchid integration plan is on track and we are encouraged by the early trading performance of the converted sites.”
Douglas Jack of Numis commented on the latest trading:
“M&B’s shares are fairly valued, in our view, but there is plenty of growth potential to drive the shares. We are forecasting 32% earnings growth over the next three years; consensus 41%. Any further recovery in LFL sales or reduction in the pension deficit would be an added bonus.”
Operating performance
| Like-for-like sales | FY 2014 52 weeks to 27 September 2014 |
FY 2015 17 weeks to 24 January 2015 |
| Total | 0.6% | 1.7% |
| Food | 0.7% | 2.8% |
| Drink | 0.5% | 0.4% |
The higher level of sales is supported by growth in food volumes. Margins continue to be weaker than last year due to a number of factors including the planned integration of the Orchid business and the careful approach which has been adopted to pricing in a demanding consumer environment.
Investments
M&B have acquired 4 sites and converted 15 in the financial year to date, including the first 6 conversions of Orchid sites to existing brands and formats. They remain on track with the integration of the Orchid business.
The investment into the EPOS system is progressing on schedule, with more than 1,400 pubs now live and the project due to complete this financial year.
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