Mitchells & Butlers plc is a member of the FTSE 250 and runs some of the UK's best-loved restaurant and pub brands including All Bar One, Browns, Harvester, Miller & Carter, Nicholson's, Sizzling Pubs, Toby Carvery and Vintage Inns.
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Mitchells & Butlers is a leading operator of managed restaurants and pubs in the UK. It listed on the London Stock Exchange in April 2003 and is a member of the FTSE 250. Its restaurants and pubs have some of the highest average sales and profits per site in the industry and it operates the best portfolio of brands in the UK.
The total eating and drinking out markets have a combined value of around £80bn. Mitchells & Butlers operates c.1,800 predominantly UK managed freehold pubs, 3.5% of the total 51,000 pubs in the UK.
We have a clear operational strategy built around 3 strategic priorities:
- Building a balanced business
- Instilling a commercial culture
- Driving an innovation agenda
Sales were challenging in the first half of the year, falling by 1.6% on a like-for-like basis. In the second half of the year our sales performance improved, such that like-for-like sales grew by 0.2%. This was in part driven by an increased level of capital investment in our sites but also through improvement in the performance of our sites which have not seen recent investment. Over this period, we have moved from sales performance lagging the market, to having outperformed consistently in recent months.
Our adjusted earnings per share fell by 2.2% to 34.9p, reflecting the lower total sales but also a weaker margin in the second half of the year. The National Living Wage was introduced from April 2016, and saw a 7.5% increase in the minimum rate of pay for those aged 25 and over, in addition to the National Minimum Wage which increased by 3.1% in October 2015. Our profits were also impacted by the acceleration in investment in our businesses, as we incur a greater number of closure weeks and pre-opening costs.
The Board is responsible for ensuring compliance with the Combined Code and recognises the importance of good corporate governance in creating a sustainable, successful and profitable business. This includes reviewing internal controls, ensuring that there is an appropriate balance of skills and experience represented on the Board and maintaining relations with shareholders.