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17/05/2017

Half Year Results 2017

(For the 28 weeks ended 8 April 2017)

  • Continued like-for-like sales momentum
  • Ongoing focus on mitigating inflationary cost headwinds
  • Strong progress on all three strategic priorities

Financial performance

  • Like-for-like salesa up 1.6% at the half year and up 1.9%a in first 33 weeks of year
  • Results impacted by movement of Easter into second half
  • Adjusted operating profit of £149mb (H1 2016 £156m)
  • Adjusted earnings per share of 15.2pb (H1 2016 15.7p)
  • Interim dividend of 2.5p (H1 2016 2.5p)

Strategic progress

  • Completed 178 return generating capital projects with focus on premiumisation of the estate
  • Improved interaction with social media; guest satisfaction score up 2.4%

Reported results

  • Total revenue of £1,123m (H1 2016 £1,096m)
  • Operating profit of £145m (H1 2016 £157m)
  • Profit before tax of £75m (H1 2016 £83m)
  • Basic earnings per share of 13.7p (H1 2016 18.4p)

Balance sheet and cash flow

  • Capital expenditure of £93m (H1 2016 £88m), including 6 new site openings and 172 conversions and remodels
  • Free cash flow of £24mc (H1 2016: £34m)
  • Net debt of £1.83bn (H1 2016 £1.86bn) representing 4.3 times adjusted EBITDAd (H1 2016 4.2 times)

Phil Urban, Chief Executive, commented:

"During the half year we have generated sustained sales growth, whilst consistently out-performing the market. This comes from the good progress we have made in our three priority areas: building a more balanced business; instilling a more commercial culture; and driving an innovation agenda.

As previously announced, margins have been adversely impacted by increased costs, most notably from wage inflation, property costs and exchange rate movements. In order to partially mitigate these costs we have been working hard to encourage our guests to trade up and increase spend per head for a more premium experience whilst challenging our General Managers to run their businesses as cost effectively as possible.

Overall, we are pleased with the turnaround in our sales trajectory and relative performance against the market. In a challenging cost and consumer environment we will continue to focus on our three priority areas."

Definitions

a – Like-for-like sales growth reflects the sales performance against the comparable period in the prior year of UK managed pubs, bars and restaurants that were trading in the two periods being compared, unless marketed for disposal. Like-for-like sales are measured against relevant accounting weeks in the prior year.

b – Adjusted earnings are quoted before separately disclosed items as set out in the Group Income Statement and detailed in note 3 of the accounts.

c – Free cash flow excludes £4m dividend payment (HY 2016 £21m); £38m mandatory bond amortisation (H1 2016 £32m) and net £6m drawn from unsecured revolving facilities (H1 2016 £8m).

d – Annualised EBITDA before separately disclosed items is used to calculate debt service coverage ratio.

There will be a presentation today for analysts and investors at 8.45am at the London Stock Exchange, 10 Paternoster Square, London, EC4M 7LS. A live webcast of the presentation will be available at www.mbplc.com. The conference will also be accessible by phone: 020 3059 8125 and quote "Mitchells & Butlers". The replay will be available until 24 May 2017 on 0121 260 4861 replay access pin 6014173#.

All disclosed documents relating to these results are available on the Group's website at www.mbplc.com

For further information, please contact:

Tim Jones – Finance Director+44(0)121 498 6112
Amy De Marsac – Investor Relations+44(0) 7712 538660
James Murgatroyd (Finsbury)+44(0)20 7251 3801

Notes to editors:

  • Mitchells & Butlers is a leading operator of managed restaurants and pubs. Its strong portfolio of brands and formats includes Harvester, Toby Carvery, All Bar One, Miller & Carter, Premium Country Pubs, Sizzling Pubs, Crown Carveries, Stonehouse, Vintage Inns, Browns, Castle, Nicholson's, O'Neill's and Ember Inns. In addition, it operates Innkeeper's Lodge hotels in the UK and Alex restaurants and bars in Germany. Further details are available at www.mbplc.com and supporting photography can be downloaded at www.mbplc.com/imagelibrary.

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Sally Ellson External Communications Manager +44 (0) 121 498 4395

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