24th Nov 2015 08:46
LONDON (Alliance News) - Mitchells & Butlers PLC on Tuesday said its pretax profit edged higher in its recently-ended financial year thanks to solid revenue and like-for-like sales growth, as it reinstated its dividend and outlined actions it will take to offset wage pressures in the UK.
The FTSE 250-listed pubs and restaurants company, which owns brands including Harvester, Toby Carvery, All Bar One and O'Neill's, said its pretax profit for the 52 weeks to September 26 rose to GBP126.0 million from GBP123.0 million a year earlier.
Revenue for the year to rose to GBP2.10 billion, up 6.6% year-on-year, as like-for-like sales increased 0.8%. Like-for-like sales did soften in the fourth quarter, however, as the company said the poor weather conditions over the summer hit customer desire to fill its beer gardens. This weakness has continued into the first weeks of the current financial year, it added, though it said it is addressing these issues. Mitchells & Butlers said total sales were down 1.3% in the first eight weeks of the new financial year and down 1.6% on a like-for-like basis.
Mitchells & Butlers also said it will have to take actions to mitigate the impact of the introduction next year of the UK National Living Wage, an effective minimum wage for over-25s. It said it considers the new wage an "impactful cost headwind", but also a potential opportunity as it may put more money in the pockets of some of its customers. As a result, it will seek to increase guest spend per head as part of its measures to offset the hit it will take.
The company also said it would reinstate its dividend, having not made a payout last year, by paying a 5.0 pence per share final dividend to shareholders. It said it will pursue a progressive dividend policy going forward.
"The market remains highly competitive but I have identified our key priorities to realise that potential. We will build a more balanced business; instil a more commercial culture; and increase the pace of execution and innovation. We are confident that with this approach we will drive sustained profit growth and enhanced shareholder returns," said Chief Executive Phil Urban.
Shares in Mitchells & Butlers were up 1.9% to 354.50p early Tuesday, one of the best performers in the FTSE 250.
By Sam Unsted; [email protected]; @SamUAtAlliance
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