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14/05/2015

Half Year Results 2015

(For the 28 weeks ended 11 April 2015)

Strong food volume growth drives sales progress

Financial performance

  • Total revenue £1,113m, up 9.5%
  • H1 2015 like-for-like sales growth 1.7%a
  • Adjusted operating profit £153m, up 4.1%b
  • Adjusted earnings per share 14.4p, up 5.9%b
  • Net cash flow £47m (H1 2014 £43m)c

Balance sheet and cash flow

  • Capital expenditure up to £94m (H1 2014: £86m), 9 new site openings and 23 conversions
  • Net debt reduced from year end to £1.9bn representing 4.4 times EBITDAd

Operational performance

  • Like-for-like food volume growth strengthens to +2.9% (H1 2014 +0.2%)
  • Operating margin 13.7% (H1 2014 14.5%)e reflects Orchid and volume-driven sales growth
  • Staff turnover at historical low of 77% (FY 2014 78%); net promoter scoref up to 65% (FY 2014 63%)
  • New EPOS systems live across whole estate
  • Orchid integration on track: office closed, synergies created, conversions performing strongly

Alistair Darby, Chief Executive, commented:

"We have made good progress in the first half with continued strong food volume growth driving improved sales. Our Orchid integration plan is being successfully executed; the office is now closed and the first sites have been converted to our brands with encouraging sales uplifts.

The market in which we operate remains challenging despite growing consumer confidence. However, we are confident that our business is well placed to capitalise on opportunities in the market and deliver future shareholder value."

Definitions

a – Like-for-like sales growth includes the sales performance against the comparable period in the prior year of all UK managed pubs, bars and restaurants that were trading in the two periods being compared. For the 28 weeks to 11 April 2015, 96% of the UK managed estate (excluding Orchid) is included in this measure.

b – Adjusted items are quoted before exceptional items, there were no exceptional adjustments in the first half of FY 2015 but £3m of exceptional charges after tax in the first half of FY 2014.

c – Net cash flow excludes £30m mandatory bond amortisation (H1 2014 £28m) and £120m transferred from cash to other cash deposits (H1 2014 £nil) and, in H1 2014 only, £148m which the Group was obliged to draw down from a liquidity facility under the terms of the securitisation. Net cash flow is detailed within the financial review.

d – Adjusted EBITDA for the 52 weeks to 11 April 2015.

e – Operating margin in H1 2014 is taken before exceptional items.

f – Net promoter score is defined as the percentage of responses where we score 9 or 10 out of 10 ('brand promoters') less the percentage of responses where we score 0 to 6 ('brand detractors') to the statement "I am likely to recommend this pub to a friend and / or relative". Responses scoring 7 or 8 ('passives') are ignored in the calculation.

There will be a presentation for analysts and investors at 9.30am at Nomura International plc, 1 Angel Lane, London, EC4R 3AB. 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 28 May on 0121 260 4861 replay access pin 0725582#.

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
James Cooper – Investor Relations+44 (0)121 498 4525
James Murgatroyd (Finsbury)+44 (0)207 251 3801

Notes for editors:

  • Mitchells & Butlers is the UK's largest operator of managed restaurants and pubs. Its portfolio of brands and formats includes Harvester, Toby Carvery, Country Pubs, Sizzling Pubs, Crown Carveries, Oak Tree Pubs, All Bar One, Browns, Miller & Carter, Castle, Alex, Nicholson's, O'Neill's and Ember Inns. Further details are available at www.mbplc.com and supporting photography can be downloaded at www.mbplc.com/imagelibrary.
  • Mitchells & Butlers serves around 135 million meals and 435 million drinks each year and is one of the largest operators within the UK's £78 billion eating and drinking out market.

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