Mitchells & Butlers expects to complete around 300 remodels and conversions in its current financial year, its chief executive this morning.
The company has opened one new site and completed 69 conversions and remodels in the fiscal year to date, but will ramp that up over the coming months.
M&B, which operates more than 1,700 pubs and restaurants, told the market that trading over the festive period was “particularly strong” across all brands, with like-for-like sales growth of 4.7% for the four weeks to 7 January 2017.
Like-for-like sales growth for the year-to-date, meanwhile, has increased to 1.7%.
Chief executive, Phil Urban, said: “This is an encouraging performance, building on positive momentum from earlier in the year. We are starting to benefit from the many initiatives we continue to put in place, which gives us confidence in successfully delivering our strategic priorities going into the new year and a performance in line with the board’s expectations.”
Food sales and drink sales have both risen at the same pace over the past four weeks, however the company warned that “increased cost pressure” is expected to lead to margins being lower than last year.
Mitchells & Butlers Q1, Edison view: “A good start, although we expect the company will need to average 2-3% like-for-like growth through the year to counteract cost pressures and meet earnings expectations.
Paul Hickman, analyst at Edison Investment Research, said: “Like-for-like sales were relatively strong, albeit within a limited range, with the seven weeks to 7 January growing by 2.9% compared with 0.5% for the eight weeks before that. This was with the benefit of better weather than at Christmas 2015, and the four weeks to 7 January showed more pronounced growth of 4.7%.
“Mitchells and Butlers is progressing with its re-investment programme, with 69 remodels and conversions in the first quarter, roughly in line with its target of 300 for the year. It’s a good start, although we expect the company will need to average 2-3% like-for-like growth through the year to counteract cost pressures and meet earnings expectations.”