22nd May 2024 13:02
(Alliance News) - Mitchells & Butlers PLC on Wednesday reported bullish half-year trade and a decent start to the second half, with the pub and restaurant firm's brands "resonating" with the UK consumer.
Shares in the company jumped 10% to 293.00 pence each in London on Wednesday afternoon.
The firm, which owns offerings such as Harvester and All Bar One, said revenue in the half year ended April 13 rose 8.9% to GBP1.40 billion from GBP1.28 billion a year prior.
Pretax profit jumped to GBP108 million from GBP40 million.
Mitchells said: "Our capital programme continues to deliver significant value by improving the competitive position of our pubs and restaurants within their local markets. Over the first half, we have completed 85 investment projects comprising 78 remodels, 4 conversions and 3 acquisitions. We are continuing to see strong performances from our investment projects and remain focused on re-establishing the target 7-year investment cycle which was interrupted by Covid-19."
Like-for-like sales grew 7.0% in the first-half. Growth has since slowed to 5.3% over the past four weeks.
The firm expects an annual outcome at the "top end of consensus". But it is a forecast that Shore believes could be on the cautious side.
Shore Capital Markets analysts added: "The outlook statement points to profit being at the top-end of consensus expectations, with Factset having at GBP290 million, versus our current estimates of GBP275 million. This would imply the second half being flat year-on-year, despite LFL sales now tracking above cost inflation, suggesting forecasts will remain conservative heading into the key summer trading period."
AJ Bell analyst Russ Mould believes Mitchells could be shaking off its less than stellar pre-Covid reputation.
"Mitchells & Butlers was a constant disappointment for years pre-pandemic, struggling to compete against the rise of the craft breweries and deluge of casual dining chains with modern offerings. With the hospitality industry shaken to its core by Covid, countless operators have now either shrunk their estate or collapsed, creating an opportunity for others to step in and grab market share," Mould said.
"Mitchells & Butlers finally seems to be getting its act together and for all the criticism that its brands like Harvester and O'Neill's are tired, they seem to be resonating with the cash-strapped public in the current environment."
By Eric Cunha, Alliance News news editor
Comments and questions to [email protected]
Copyright 2024 Alliance News Ltd. All Rights Reserved.
Related Shares:
Mitchells & Butlers