14th May 2015 08:35
LONDON (Alliance News) - Mitchells & Butlers PLC Thursday reported growth in profit in the first half of its financial year, boosted by the fact that its comparative in the prior year included an exceptional charge, as sales grew but operating margin shrank.
The pubs company reported a pretax profit of GBP75 million in the 28 weeks to April 11, up from GBP68 million in the same period the year before, as revenue grew 8.8% to GBP1.11 billion from GBP1.02 billion.
Mitchells & Butlers said that profit was boosted on the year before as it had no exceptional adjustments, compared with a GBP4 million charge the prior year.
Like-for-like sales grew 1.7%, Mitchells & Butlers said. Food sales growth was primarily driven by volume growth of 2.9%, with only a small increase in average spend per head, whereas drink sales growth resulted from higher average spend growth of 2.7%, partially offset by a volume decline of 2.2%.
Food sales growth being driven by volume rather than spend per head contributed to a decline in operating margin by 0.8 points to 13.7% from 14.5%, the company said.
Mitchells & Butlers acquired the Orchid pub business last year and said its integration in the first half led to the opening of 14 conversions, which are "performing strongly".
"We have made good progress in the first half with continued strong food volume growth driving improved sales. Our Orchid integration plan is being successfully executed; the office is now closed and the first sites have been converted to our brands with encouraging sales uplifts," Chief Executive Alistair Darby said in a statement.
"The market in which we operate remains challenging despite growing consumer confidence. However, we are confident that our business is well placed to capitalise on opportunities in the market and deliver future shareholder value," he added.
Mitchells & Butlers said it will continue to monitor anticipated net cash flow generation before taking a decision on the resumption of dividend payments.
Shares in Mitchells & Butlers were trading down 1.2% at 442.44 pence Thursday morning.
By Karolina Kaminska; [email protected] @KarolinaAllNews
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