M&B profit fed by food sales

PUBS and restaurants group Mitchells & Butlers yesterday reported a surge in food sales in recent weeks and said it was looking to make acquisitions as it re-shapes itself into a food-led business.

M&B, which has over 2,000 pubs and restaurants and whose brands include Harvester, All Bar One and Toby Carvery, reported a 4.4 per cent increase in sales at outlets open for more than a year in the nine weeks to 18 September, with food sales rising by 7.1 per cent and drink sales up 2.2 per cent.

“This is a very encouraging performance, particularly given the present consumer economy, and underlines the strength of the Mitchells & Butlers business,” said chief executive Adam Fowle.

The switch towards higher-margin food sales has enabled the company to improve its operating margin which it expects will have risen by 1.2 percentage points to 16.5 per cent in the year to 25 September.

M&B, whose chains also include the Sizzling Pub company, O’Neills and Ember Inns, said it was planning to invest about £200m next year on acquisitions of single sites and small packages of sites, as well as maintenance and conversions of existing pubs.

Fowle said the group planned to spend £90m on expansion with £110m being invested in maintenance and conversions. Fowle said the company will spend about £50m purchasing single sites, small groups of pubs and new build sites in retail parks and town centres.

He added: “We’re keeping our options open although we feel no pressure to do larger transactions.”

Clapham House and Carluccio’s have recently received bids. In Carluccio’s case the offer came form the Middle East.