M&B sees surge in profits

Mitchells & Butlers, the West Midlands-based pub and restaurant group, today announced a surge in both profits and revenue as it reaffirmed moves to turn the business into a food-led operation.

The group, with its HQ in Birmingham, said pre-tax profits for the six months to April 10 rose more than 55 per cent to £73 million on revenue up 1.3 per cent to £1,037,000. It said like-for-like sales rose 1.9 per cent in the nine weeks since the first half - an upturn on a difficult and tough second quarter.

Trading was hit by wintry weather and the rise in VAT.

Chief executive Adam Fowle said results underpinned confidence in investing in mid-market eateries including Harvester, Toby Carvery, Crown Carveries and Sizzling Pub Co.

"The business continues to trade well and we are pleased with the progress made in the first half with improved sales and margins leading to an increase in operating profits and profit before tax," he said

In the second quarter food and drink sales were up 4.3 per cent and 0.3 per cent respectively against overall declines in pub industry food sales of 5.2 per cent and in the on-trade drinks market of 4.9 per cent.

Food sales were driven by successful campaigns such as Toby Carvery's 'Great British Roast Debate'. The group owns and operates about 2,000 pubs and restaurants including All Bar One, O'Neills and Nicholson's.

It plans to boost customer spending through menu changes but says market conditions are difficult.

M&B had a boardroom row that saw shareholder Joe Lewis succeed in ousting most of the firm's leaders at the start of the year.

The board has since approved accelerating moves towards its food-led business, while pulling out of more price sensitive drinks-based operations. It plans to open outlets in leisure parks and other high traffic locations such as retail parks.