27th Jan 12
Mitchells & Butlers sales boosted by mild winter
by Katie Naylor
Glass half full: chain's sales up higher than expected
Glass half full: chain's sales up higher than expected
Restaurants and pubs group Mitchells & Butler reported a better-than-anticipated rise in first quarter sales, benefitting from milder weather during the festive period and high demand for casual dining.
The group, whose chains include Toby Carvery, All Bar One and Harvester, said it was confident that growth would continue in the coming year. M&B said in its trading update that sales at pubs and restaurants open for more than a year increased by 4.4 per cent during the 17 weeks ending 21 January.
Market forecasts had predicted the company would achieve growth between two per cent and 3.5 per cent, with the average forecast being at 2.6 per cent, revealed a poll of five analysts by Reuters. The company said there had been an increase of 6.5 per cent in like-for-like sales in the nine weeks leading up to 21 January.
M&B, which runs roughly 1,600 restaurants and pubs in the UK, said that January’s trading had been more subdued although remained in line with the underlying like-for-like sales trend initially noted in July 2011 of about one per cent growth.
The company had two bid approaches rejected from its biggest shareholder Joe Lewis, the billionaire currency trader, last year. Lewis, who has a stake in excess of 25 per cent, aborted a share offer of 230p a share, valuing the business at about £940m in October. Takeover regulations prohibit him from making a renewed approach until April.
M&B has also experienced boardroom upheaval, having had six chairmen in the space of just two years and hasn’t had a permanent chief executive since the departure of Adam Fowle last March. Bob Ivell, the industry veteran and former managing director of the Scottish and Newcastle’s managed pubs division, is now the acting executive chairman and heading the search for a full-time chief executive.
The company said that progress was being made in the search for a new CEO as well as to strengthen the board with more none-executive directors. But the Association of British Insurers (ABI), which represents roughly 20 per cent of M&B’s stakeholders, has issued a warning about governance concerns, pointing out that it is the sole company on the FTSE-350 which has no independent non-executive directors at present.
PIRC, the British corporate governance which advises institutional investors, has urged its members not to vote for the re-election of non-executives Douglas McMahon and Doug Evans, representatives of Lewis, who, in addition, owns Premier League football club Tottenham Hotspur.
M&B shares increased by 0.8 per cent to 260.8p in early trading on Thursday.
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