Mitchells & Butlers full year profits up 26%

23/11/2010

Sharecast reports this morning that Mitchells & Butlers’ debt reduction programme has cut the pub group’s interest bill, helping boost full-year profit by 26%.

The All Bar One and Harvester owner reported profit before tax and exceptional items up to £169m for the year ended 25 September from £134m a year ago. Revenue rose 1.1% to £1.98bn.

Like for like sales growth of 2% was mostly driven by food, up 4.5%, with drink 0.5% higher over the period. Based on the retained estate – after disposals – like for like sales were up 2.8%. Food was up 4.7% and drink 1.4%,

Despite the challenging economic conditions, like-for-like food sales for the first eight weeks of the new financial year are up 6.9% as customers “trade up the menu”. Drink is up 1.4%, making a total of 3.7%.

Net interest paid of £147m was £13m lower than last year as the company slashed net debt by almost £300m to £2.3bn.

“The company now has a strong balance sheet which, coupled with our brands and resilient trading platform, underpins our confidence in the future,” chief executive Adam Fowle said.

But there are concerns about the outlook for consumer spending, which remains uncertain in light of government spending cuts and the VAT increase in January.

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