22nd Nov 2016 08:01
LONDON (Alliance News) - Mitchells & Butlers PLC on Tuesday reported a fall in profit in its recently-ended financial year but noted an improved sales performance since the year end, although it warned on the increased costs it will face as a result of the UK's vote to leave the European Union.
The pub and restaurant company, which owns brands including Crown Carveries and Miller & Carter, said pretax profit in the year ended September 24 fell to GBP94.0 million from GBP126.0 million the year before, as revenue decreased to GBP2.09 billion from GBP2.10 billion, and like-for-like sales declined by 0.8%.
Despite the sales decline, Mitchells & Butlers said its performance improved during the course of the year, with second-half like-for-likes improving to 0.2% growth from a 1.6% fall in the first half. It said this was driven by an increased level of capital investment in the estate and an improvement in the performance of its sites yet to have shared in its recent investments.
Mitchells & Butlers said the positive sales momentum has continued into the new year, with like-for-like sales in the first eight weeks rising by 0.5% year-on-year.
Mitchells & Butlers will pay a final dividend of 5.0 pence, taking the total dividend to 7.5p.
"In the next year, as previously announced, we face external cost headwinds, notably from further wage inflation, the recent business rates review and exchange rate movements. We are working hard to mitigate these headwinds wherever possible, both through building on our sales momentum and active management of our cost base," Chief Executive Phil Urban said in a statement.
Mitchells & Butlers added that the UK's vote to leave the EU may affect the company in the medium to long term due to changes in consumer confidence, changes to employment and immigration laws, and changes to input costs.
While the first two issues are "largely unknown at present", Mitchells & Butlers said the net effect of weaker sterling will be profit dilutive to the food and drink purchased in foreign currency, although it said this will be partially mitigated in the current financial year by existing contracts.
By Karolina Kaminska; [email protected] @KarolinaAllNews
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