Mitchells & Butlers (MAB) returns to profitability
By Rob Griffin
09:15, 25 November 2021
UK pub operator Mitchells & Butlers has announced a return to profitability since Covid-19 restrictions were lifted but warned the trading environment remains challenging.
The All Bar One owner said pre-tax losses had narrowed to £42m ($56m) for the 52 weeks ending 25 September 2021 from £123m last year.
It also reported that like-for-like sales were up 2.7% for the eight weeks since the end of the financial year, compared to the 2019 full year.
In a statement, the company blamed the enforced closures to stop the pandemic’s spread for full-year like-for-like revenue falling 28% to £1.06bn from £1.47bn last year.
It also pointed out that second-half sales of £846m were more than double the £436m achieved last year, which demonstrated “strong recovery on re-opening” as restrictions were eased.
However, the results announcement was enough to push the company’s stock price up 2.5% to 241.4p by late morning on the London markets.
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The company noted in its statement that sales growth was achieved in August and September, with the performance stronger in suburban locations as much of the workforce continued to work from home.
While footfall in major cities was well below pre-pandemic levels, this has been slowly increasing and is expected to continue.
“We believe that the desire to socialise in pubs and restaurants, and to share experiences which cannot easily be replicated at home, remains strong and that there is pent-up demand which has built during closure,” it stated.
CEO Phil Urban believes that Mitchells & Butlers is well-positioned, despite the challenging trading environment and cost headwinds putting pressure on the sector.
“We have strengthened our balance sheet and returned to profitability and cash generation, allowing us to resume our capital plan and Ignite programme which will deliver sales and efficiency improvements to help combat these challenges,” he said.
Urban insisted demand for the company’s “well-loved brands” had been demonstrated by an encouraging return to sustained like-for-like sales growth since restrictions were lifted.
“We are confident in our ability to continue our recovery as a market-leading operator,” he said.