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

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