Mitchells & Butlers' sales up
Thursday, 27 Sep 2007 09:45
The Harvester pub chain is part of the group
Pub group Mitchells & Butlers has said it expects its earnings for the year to be at the upper end of expectations, amid rising sales.
In a pre-close trading update, the owner of the Harvester and O'Neill's pub chains said that its like-for-like sales increased by 2.6 per cent in the 18 weeks to September 15th.
Mitchells said that the rise represented a "resilient performance" in the face of a period of bad weather and the introduction of the smoking ban in England, coupled with strong comparatives against sales recorded between July and September last year.
In the 11 weeks since the introduction of the smoking ban same outlet like-for-like sales across the group's English pubs, excluding those previously converted into non-smoking premises, increased by 2.2 per cent.
The company said the result was in line with its expectations about the initial impact of the ban before the onset of winter and stressed that it believed the non-smoking rule would prove beneficial to the business in the long-term.
Figures show that Mitchells' performance over the past year has been driven by rising food sales. In the 50 weeks to September 15th same outlet like-for-like sales increased by 3.2 per cent, with drink sales up by 2.5 per cent and food sales up 5.3 per cent.
The group also confirmed that discussions were continuing to release "substantial value" to shareholders through the creation of a dedicated property company structure. Mitchells is hoping to form a property joint venture with activist shareholder Robert Tchenguiz's R20 vehicle and said that talks were ongoing with a view to completing a transaction on "acceptable financing terms once the debt markets have stabilised".
Mitchells also said it is confident that it can mitigate the impact of an estimated £12 million of additional regulatory costs next year.
"Despite the uncertain outlook for consumer spending, Mitchells & Butlers is competitively well placed to make further market share gains in the year ahead," the company stressed.
"Margin reinvestment in the quality and value of our food offers is being actively pursued to generate further volume increases," the pub group added.