REG - Mitchells & Butlers - Third Quarter Trading Update

Mitchells & ButlersAnnouncement

27/07/2023 07:15

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RNS Number : 3242H  Mitchells & Butlers PLC  27 July 2023

27 July 2023

 

Mitchells & Butlers plc

LEI no. 213800JHYNDNB1NS2W10

 

Third Quarter Trading Update

 

Trading statement covering the 43 weeks ended 22 July 2023.

 

Sales

Sales comparisons, unless otherwise stated, are to the same period in FY 2022.

 

Continued strong trading through the third quarter has increased like-for-like
sales in the year to date to 8.9%, with total sales growth now of 10.5%.

 

Like-for-like sales:

        W1-15  W16-28  W1-28  W29-43  W1-43

        Q1     Q2      H1     Q3      YTD

 Food   6.4%   5.2%    5.8%   11.6%   7.9%
 Drink  15.5%  9.9%    12.8%  7.4%    10.7%

 Total  10.4%  6.4%    8.5%   9.7%    8.9%

 

Like-for-like sales in the third quarter increased by 9.7%, as we continued to
out-perform the market(a) and with both food and drink volumes in growth. We
achieved a record-breaking Father's Day in June and sales performance across
the quarter was relatively consistent outside of weeks impacted by industrial
action on national transport systems.

 

Against FY 2019, year-to-date like-for-like sales are up 10.0%, with growth
driven by spend-per-head.

 

Investments

We continue to focus on investment in the estate and in the year to date we
have completed 116 conversions and remodels and opened 4 new sites.

 

In June 2023 we completed the acquisition of the remaining 60% in 3Sixty
Restaurants Limited, owners of Ego Restaurants. Ego is a collection of
Mediterranean inspired pubs and restaurants where guests can enjoy freshly
cooked food, cocktails, cask ales and wine from across the Continent. It
currently has 26 sites, including 16 that are leased from Mitchells &
Butlers.

 

Banking Facilities

We have successfully refinanced our unsecured debt facilities which were due
to expire in February 2024. The new Revolving Credit Facility ('RCF') has been
increased in size to £200m based on a wider banking group, including the
continued support of all existing banks, and extends for a further three years
to July 2026. The RCF remains unsecured, with a negative pledge in favour of
participating banks, and is based on two main financial covenants - net debt
to ebitda to not exceed 3.0 times (as before) and ebitdar to rent plus
interest of not less than 1.25 times (reduced from 1.5 times). The facility is
undrawn at the current time.

 

 

Pensions

We are delighted to announce that the trustees of the M&B Main Pension
Plan, working closely with the Company, have now successfully completed a full
scheme buy-in with Standard Life. This transaction follows on from the
completion of the buy-in of the Executive Plan announced last year and
eliminates substantially all remaining pensions risk in the group.

 

Committed contributions are all being made into blocked escrow accounts and,
after many years, will cease altogether in September this year.

 

Outlook

There are indications that cost inflation is now starting to abate such that
the current year cost headwind should be at the bottom end of the 10-12% range
previously identified. We are working hard to mitigate these pressures as far
as we are able, both through driving sales growth and implementing
efficiencies, which should allow margins to start to rebuild towards pre-covid
levels from next year.

 

Whilst we remain mindful of the challenging macroeconomic environment, and
pressures on the consumer in particular, an improving cost outlook and
continued strong trading through the third quarter give us confidence that the
current year outturn will be at the top end of consensus expectations, with
continued momentum into FY 2024.

 

The current financial year will be a 53-week accounting year to 30 September
2023.

 

Phil Urban, Chief Executive, commented:

 

"We are very pleased to report continued strong like-for-like sales growth
through the quarter based on out-performance against the market (a) and
underpinned by volume growth in both food and drink.

 

We remain focused on our Ignite programme of initiatives and our successful
capital investment programme, driving cost efficiencies and increased sales.
Combined with our diverse portfolio of established brands, value proposition
and enviable estate locations, we believe this leaves us well positioned to
continue to outperform the sector(a) and deliver a strong full year
performance."

 

 

Definitions

a - As measured by the Coffer CGA Business Tracker

 

For further information, please contact:

 

 Tim Jones - Chief Financial Officer  +44 (0)121 498 6112
 Amy de Marsac - Investor Relations   +44 (0)121 498 6514
 James Murgatroyd (Finsbury)          +44 (0)20 7251 3801

 

Note for editors

Mitchells & Butlers is a leading operator of managed restaurants and pubs.
Its portfolio of brands and formats includes Harvester, Toby Carvery, All Bar
One, Miller & Carter, Premium Country Pubs, Sizzling Pubs, Stonehouse,
Vintage Inns, Browns, Castle, Nicholson's, O'Neill's, Ember Inns and Ego
Restaurants. In addition, it operates Innkeeper's Collection hotels in the UK
and Alex restaurants and bars in Germany. Further details are available at
www.mbplc.com and supporting photography can be downloaded at
www.mbplc.com/imagelibrary (http://www.mbplc.com/imagelibrary) .

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