Mitchells & Butlers has spent heavily on opening new sites and converting 172 of its outlets since the start of 2017 in an effort to turn around its sales trajectory. But its growth remained modest as anticipated cost pressures bit.
The group’s latest financial results for H1 reveal that it spent £93m on opening new sites, £5m more than in H1 2016. It opened six new sites and plans to open around 15 in the full year, mostly in All Bar One, Alex and Miller & Carter. But it is also expects to sell 78 sites by the end of this year.
Total revenue was £1.12bn, up on last year but operating profits before tax were £149m, £7m less than in H1 2016. Meanwhile like-for-like sales were up 1.9% – a “turnaround in sales trajectory”, according to Mitchells & Butlers.
Margins have been impacted heavily by increased costs, notably from wage inflation, property costs and exchange rate movements, the group admitted.
Mitchells & Butlers, which owns Harvester, Toby Carvery and Miller & Carter, has now converted 72 of its sites into its Pizza & Carvery format while the Harvester Feel Good Dining concept is now in 55 sites.
“In order to partially mitigate these costs we have been working hard to encourage our guests to trade up and increase spend per head for a more premium experience whilst challenging our general managers to run their businesses as cost effectively as possible,” explained chief executive Phil Urban.
“During the half year we have generated sustained sales growth, whilst consistently out-performing the market. This comes from the good progress we have made in our three priority areas: building a more balanced business; instilling a more commercial culture; and driving an innovation agenda. In a challenging cost and consumer environment we will continue to focus on our three priority areas.”
Mitchells & Butlers‘ portfolio of brands includes Harvester, Toby Carvery, All Bar One, Miller & Carter, Premium Country Pubs, Sizzling Pubs, Crown Carveries, Stonehouse, Vintage Inns, Browns, Castle, Nicholson’s, O’Neill’s and Ember Inns.