24th Jul 2014 09:54
LONDON (Alliance News) - Mitchells & Butlers PLC said Thursday that total sales grew in the third quarter on increased like-for-like food volumes despite a weakening of the UK's eating and drinking out market in the UK during May and June, exacerbated by the impact of the football World Cup
In an interim management statement for the third quarter the company said total sales rose 3.8% during the quarter, bringing growth in the first 42 weeks of the year to 2.9%.
When considering like-for-like sales, total sales in the 14 weeks to July 19 were flat, food sales were up 0.6% and drink sales declined 0.5%.
The restaurant, pub and bar operator said that like-for-like food volumes continued to increase in the third quarter, although sales remained flat as it held prices and saw a decrease in food spend per head.
The flat sales reflect a weak eating and drinking out market in the UK during May and June, said Mitchells & Butler, exacerbated for restaurants by the impact of the football World Cup. In the last few weeks the company said it has seen an improvement in demand, particularly for food, from these levels.
In the 42 weeks to July 19, 2014, like-for-like total sales rose 0.7%, as food sales were up 0.8% and drink sales were 0.6% higher.
On a half-year basis - for the 28 weeks to April 12, 2014 - total like-for-like sales were up 1.1% as food and drink sales rose 0.9% and 1.3%, respectively.
Following the acquisition of the Orchid Group earlier in the year, the company has acquired its 173 outlets. Mitchells & Butlers said results from the company are included within total sales for the five weeks following June 14, 2014. "Integration is progressing well and we remain confident that the acquisition will be immediately enhancing to adjusted earnings," said M&B.
The acquisition is in line with the firms' strategy to focus on long-term growth in the eating-out market and provides significant opportunity for sales and margin growth through both the conversion of selected sites to Mitchells & Butlers brands, and through cost synergies from the combination of support functions, it said.
"We remain confident in our well established strategy. We have continued to achieve growth in food volumes, further improvements in staff turnover and strong Net Promoter Score - all key lead indicators of long term success. This is an exciting time for our business as we start the integration of the high quality Orchid estate, which we believe will accelerate our growth and create significant value over the long term. We remain focused on our strategic priorities and are well-placed for future success," said Chief Executive Alistair Darby.
Shares in Mitchells & Butlers were Thursday trading 1.53% lower at 378.9 pence per share.
By Alice Attwood; [email protected]; @AliceAtAlliance
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