UK's Mitchells & Butlers posts higher sales during festive season (updated)
15/01/2025 08:13
(Adds details and background throughout, adds shares in
paragraph 13)
Jan 15 (Reuters) - British restaurant and pub operator
Mitchells & Butlers MAB.L reported a rise in like-for-like
quarterly sales on Wednesday due to strong demand during the
Christmas season but said it witnessed a slowdown amid cold
weather during the last couple of weeks.
WHY IT'S IMPORTANT
UK pub groups, which saw a higher footfall during the
year-end festive season, are bracing for challenging times ahead
due to a steep rise in payroll taxes and escalating costs,
particularly related to labour.
The London-listed pub operator's cautious stance on rising
expenses comes at a time when many UK businesses have flagged
higher costs due to the increase in employer social security
contributions introduced in the UK budget.
BY THE NUMBERS
The owner of brands such as Toby Carvery, Harvester and All
Bar One said its like-for-like sales during the 15 weeks to Jan.
11 were up 3.9% year-on-year but grew at a slower pace compared
to the year-ago 7.7% growth.
Mitchells said that sales growth was strong during the key
festive days, with record sales on Christmas.
Its peer Fuller Smith & Turner FSTA.L on Wednesday posted
a 5.9% increase in like-for-like sales for the 41-week period to
Jan. 11.
QUOTE
"Cold and stormy weather over recent weeks has subsequently
had a material adverse impact on trading but we remain confident
in the strength of underlying sales growth," CEO Phil Urban said
in a statement.
MARKET REACTION
Analysts at Jefferies said that Mitchells & Butlers is
poised to increase market share in a cost-intensive sector, but
warned that concerns over post-UK budget consumer behaviour
could impact the short-term share price of this favored pub
sector player.
Shares in the FTSE 250 index .FTMC pub operator opened up
5% at 240 pence, while the index was 0.24% higher.
(Reporting by Anandita Mehrotra and Radhika Anilkumar in
Bengaluru; Editing by Sonia Cheema and Mrigank Dhaniwala)
((Anandita.Mehrotra@thomsonreuters.com;))