Mitchells & Butlers profits rise on cost savings

Mitchells & Butlers saw half year pre-tax profits rise 71.4 per cent as the UK operator of pubs, bars and restaurants delivered cost savings following a major restructuring.

Mitchells & Butlers saw half year pre-tax profits rise 71.4 per cent as the UK operator of pubs, bars and restaurants delivered cost savings following a major restructuring.

Pre-tax profit for the six months to April 13th came to £72m, compared to £42m a year earlier, helped by the group cutting expenses by £10m.

The firm said it benefited from its transformation programme, which began last year. The first stage of the plan included restructuring central functions and modernising core IT infrastructure.

"Having now delivered our restructuring cost savings in full, we have identified specific market segments where we can grow successfully and we have outlined clear operational priorities," said Chief Executive Officer, Alistair Darby.

"By focusing on these areas, I believe that we will provide great experiences for our guests and sustainable returns for our shareholders."

During the period, revenues rose a modest 2.0% to £991m as like-for-like sales from restaurants and pubs grew 0.3%.

Revenue was driven mainly by a like-for-like 1.4% increase in food sales offset by a 1.2% drop in like-for-like drink sales.

Adjusted operating profit of £145m was 5.1% higher than last year following investments in improving services and amenities with labour and repairs.

Operating margins in the first half were 40 basis points up from last year at 14.6%, boosted by the restructuring, menu management and lower new site opening costs.

It mitigated the impact of alcohol duty increases last year a rise in the national minimum wage, food inflation and higher business rates.

Looking ahead, the group expects growth in sales as its build on its brand portfolio and reaps the benefits of its transformation of operations.

Shares fell 1.86% to 400.90p at 10:41 Thursday.

RD

Recommended

Broker safety – your questions answered
Investment strategy

Broker safety – your questions answered

Cris Sholto Heaton answers more of your questions about the safety of stockbroker accounts
25 Mar 2020
How demographics affects stock valuations
Investment strategy

How demographics affects stock valuations

New research suggests that stock and bond valuations are driven by the age of the population – at least in the US.
24 Feb 2020
Do you own shares in Sirius Minerals? Here’s what you need to do now
Stocks and shares

Do you own shares in Sirius Minerals? Here’s what you need to do now

Mining giant Anglo American has proposed a cash takeover of Yorkshire-based minnow Sirius Minerals. Unhappy shareholders must decide whether to accept…
20 Feb 2020

Most Popular

Why we won’t see a house-price crash in 2021
House prices

Why we won’t see a house-price crash in 2021

Lockdown sent house prices berserk as cooped up home-workers fled for bigger properties in the country. And while they won’t rise quite as much this y…
18 Jan 2021
The world’s fund managers are getting very bullish – be careful out there
Stockmarkets

The world’s fund managers are getting very bullish – be careful out there

The latest survey of fund managers shows them to be extremely bullish on all the same things. And that, says John Stepek, means the market is in dange…
21 Jan 2021
Inflation is the easiest way out of this – just don’t expect politicians to admit it
Inflation

Inflation is the easiest way out of this – just don’t expect politicians to admit it

The UK government borrowed £34.1bn in December, a record amount for that month. Britain's debt pile now amounts to 100% of GDP. How are we going to pa…
22 Jan 2021