Mitchells and Butlers' growth slows

Mitchells and Butlers, the restaurant and pub chain made a profit before tax of £132m in the full year to the 24 September, compared to a loss of £127m in the previous year.

The company, which owns the Toby Carvery and O'Neills brands saw revenue from the retained estate (like-for-like) climb 4.9% to £1,762m with earnings before interest, tax, depreciation and amortisation up 1.8% at £398m.

The like-for-like (LFL) comparison is crucial to understanding Mitchells as the firm sold many of its outlets in the preceding year. The pubs and restaurants that it still owns and that have been operating for over a year give a clear picture of the performance of the group.

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Within the retained estate, LFL sales rose 2.6%, with LFL food sales up 4.8% and LFL drink sales rose 1%.

Total group sales however, which include the impact from disposals, fell 9.3% from £1,980m to £1,796m.

The Executive Chairman of M&B, Bob Ivell said of the numbers: "This is a resilient set of results despite a challenging year with a difficult consumer environment, board changes and a takeover approach."

Altium Securities said the numbers were in line with expectations, but noted that "trading continued to soften over the final 10 weeks of the year with food and drink growth slowing to 0.6% and 0.2% respectively."

The broker, which makes a market in the stock, rate the shares as no more than a "hold".

"We fail to see a positive near term catalyst for the shares and maintain our Hold recommendation. Our preferred stocks in the licensed retail sector remains Spirit and Marston's given their strong growth opportunity and very attractive yield," the broker said.

Mitchells and Butlers shares had risen 5% by 8.41am

BS