Mitchell & Butler warns of gloomy outlook for 2010

Managed pub operator Mitchells & Butlers has unveiled better- than-expected results so far this year but warns of a gloomy outlook for 2010.

The All Bar One and O’Neill’s operator announced like-for-like sales growth of 2.6% over the summer (in the 10 weeks to 19 September 2009), mainly reflecting the 5.8% growth in food sales.

“As a consequence of improved sales performance the Board expects earnings for the current year to be slightly above current market consensus estimates,” said M&B in its pre-close trading statement.

For the 51 weeks up to September, like-for-like sales growth was 1.6% and total retail sales were up by 3.4% for the group which currently operates around 2,000 pubs.

In the residential estate, which accounts for 77% of total sales, same outlet like-for-like sales were up 3.8% in the 10 weeks but dropped by 0.4% in the high street, which the group said reflected a slowing in growth rates in London and other high street pubs.

Year-end debt is expected to be slightly below the half-year figure of £2.64bn as the business continues to generate cash supported by disposals this year of £74m.

Money drawn from its £500m unsecured medium term loan facility is below £400m, well within the required step down to £475m by the end of the year.

M&B said the outlook for consumer expenditure remains “uncertain” due to the continued rise in unemployment and the hoist in VAT next January but added that its “strong sites, brands, operational skills and cost management leaves the business well positioned in the face of challenging market conditions”.

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By Emma White

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