19 December 2013


Annual Report 2013

In compliance with Listing Rule 9.6.1, Mitchells & Butlers plc has today submitted copies of the following documents to the National Storage Mechanism:

Company Annual Report and Accounts 2013
Notice of Annual General Meeting

These documents will shortly be available for inspection at

The Company's Annual General Meeting will be held at The International Convention Centre, Broad Street, Birmingham B1 2EA on Thursday 30 January 2014 at 11.30am.

Risks and uncertainties

The principal risks that affect the Company, together with the key mitigating activities in place to manage those risks are set out below. This does not represent a comprehensive list of all of the risks that the Company faces, butfocuses on those that are currently considered to be of most concern.

The processes that are used to identify and manage risks are described in the Internal control and risk management statement onpages 45 and 46 of the 2013 Annual report.

Mitigating activities
Market Risk : Consumer taste and brand management
Social and demographic changes are driving the long-term growth in eating-out while at the same time leading to a steady decline in the sales of on-trade drinks without food. These changes, together with other developments in consumer taste may reduce the appeal of Mitchells & Butlers' brands to its customers, especially if the Company fails to anticipate and identify these changes and respond to them adequately and promptly.
Market risk : Pricing and market changes
External influences, such as changes in the general economic climate or competitor activity, could have a detrimental effect on customers' spending patterns and therefore the Company's revenue, profitability and consequently the value of its assets.
Mitchells & Butlers' business is focused on the long-term potential of the eating-out market. The Company owns sites across the UK with a wide spectrum of customer offers targeted at different consumer groups and leisure occasions. This range allows the Company to respond to changes in consumer expenditure either by flexing our offerings or by substituting a different brand at a particular location. This activity is supported by dedicated Sales and Margin Managers and Asset Planning teams which analyse and evaluate a range of information including that in respect of competitors.
Operational risk : Cost of goods price increases (including energy price increases)
Increases in the price of goods for resale and utilities costs as a result of increases in global demand and uncertainty of supply in producing nations can have a significant impact on the cost base consequently impacting margins.
Operational risk : People planning and development
Mitchells & Butlers' business has a strong customer focus, and as such it is important that it is able to attract, retain, develop and motivate the best people with the right capabilities throughout the organisation.
Operational risk : Business continuity and crisis management
Mitchells & Butlers relies on its food and drink supply chain and the key IT systems underlying the business to serve its customers efficiently and effectively. Supply chain interruption, IT system failure or crises such as terrorist activity or the threat of disease pandemic might restrict sales or reduce operational effectiveness.
The Company has in place crisis and continuity plans that are tested and refreshed regularly.
Finance risk : Borrowing covenants
The Company maintains headroom against these risks. The finance team conducts daily cash forecasting with periodic reviews at the Treasury Committee, the roles of which include ensuring that the Board Treasury Policy is adhered to, monitoring its operation and agreeing appropriate strategies for recommendation to the Board. In addition, regular forecasting and testing of covenant compliance is performed and frequent communication is maintained with the Securitisation Trustee.
Finance risk : Pension fund deficit
There is a risk that the pension fund deficit increases because of poor investment performance, lower long-term bond yields or increased life expectancy, leading to unexpected increases in funding requirements on the Company. The triennial actuarial valuation carried out at 31 March 2010 resulted in a deficit of £400m. The 2013 valuation is currently ongoing.
Mitchells & Butlers maintains a close dialogue with the Trustees of the pension schemes and three of the 12 Trustees are appointed by the Company. The Company has made significant additional contributions to reduce the funding deficit.
Regulatory risk : Failure to operate safely and legally
A major health and safety failure could lead to illness, injury or loss of life or significant damage to the Company's or a brand's reputation.
Mitchells & Butlers maintains a robust programme of health and safety checks both within its restaurants and pubs and throughout the supply chain. The dedicated Safety Assurance team uses a number of technical partners including food technologists, microbiologists and allergen specialists to ensure that our food procedures are safe. Regular independent audits of trading sites are performed to ensure that procedures are followed and that appropriate standards are maintained. Food suppliers are required to meet the British Retail Consortium Global Standard for Food Safety and are subject to regular safety and quality audits. Comprehensive health and safety training programmes are in place.

For further information, please contact:

Investor Relations

Stephen Hopson

0121 498 4895


James Murgatroyd (RLMFinsbury)

020 7251 3801