Mitchells & Butlers spends £7m to fend of unwanted attention

Mitchells & Butlers spent almost £7m last year fending off the unwanted attentions of property magnate Robert Tchenguiz, who launched a failed bid for the pub company in May.

The cost, which also includes the refinancing of some of its securitised bonds, is recorded as an exceptional item in its full-year results, which are out today.

In a statement to the City, M&B said it expected to have around 100 of the 239 pubs it acquired from Whitbread this summer reopened under its own brands by next Easter.

To date, 25 have reopened as M&B branded pubs and the company expects to achieve a target of 50 by Christmas.

The company has now changed 200 of its pubs in England and Wales to non-smoking status with a less than 1% impact on their sales growth.

It said its experience so far in Scotland, which represents about 4% of its 2,200-plus outlets, was that larger sites with big food volumes would benefit from the impending smoking ban in England and Wales.

M&B predicts it is small, wet-led pubs that will be hardest hit but reiterates its previous assertion that the impact of a ban in England and Wales will be to reduce sales growth in the first year with a strong acceleration thereafter.

Around 80% of the company’s estate has outside areas. Same outlet food sales in the full year were up 7.3% and now contribute 35% of the company’s retail sales.

Results for the year ended 30 September 2006

Turnover: 5.5% up at £1.72b (2005: £1.63b)
Earnings before interest, depreciation and amortisation: up 6.7% at £430m (2005: £403m)
Pre tax profit: 10.1% up at £208m (2005: £189m)

Same outlet like-for-like sales up 4.1%
Same outlet food sales up 7.3%, drink 3.2%
Average weekly sales per managed pub up 6% to £17.5m

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 By Chris Druce

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