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22/11/2018

Full Year Results 2018

(For the 52 weeks ended 29 September 2018)

  • Adjusted operating profita growth in the second half
  • Like-for-like salesa growth maintained
  • Momentum gathering from second wave of initiatives

"Focus on our three priority areas of building a more balanced business; instilling a more commercial culture; and driving an innovation agenda has continued to move the business forward over the financial year. The implementation of the second wave of initiatives from our transformation programme has resulted in sustained like-for-like sales growth, continued market out-performanceb and a return to profit growth in the second half despite Easter moving into the first half.

We continue to work hard on driving efficiency gains and profitable sales growth through the ongoing roll out of initiatives to mitigate the cost headwinds impacting the industry.

Overall, the Company is positioned well to continue creating shareholder value in the long term."

Phil Urban, Chief Executive

Financial performance

  • Full year like-for-like salesa up 1.3% and up 2.2%a in recent 7 weeks
  • Adjusted operating profita of £303ma, down 1.6% on a 52 week basis
  • Adjusted operating profita growth in second half of £3m
  • Adjusted earnings per sharea of 34.1pa, down 0.9% on a 52 week basis

Strategic progress

  • Sustained like-for-like salesa growth remains ahead of the market
  • £28m of savings achieved to mitigate continuing inflationary cost headwinds
  • Completed 232 return generating projects with focus on premiumisation or amenity enhancement
  • Improved guest care and responsiveness; 93% of online reviews responded to, up 10ppts
  • Improved employee engagement; pub management turnover reduced 2.6ppts

Reported results

  • Total revenue of £2,152m (FY 2017 £2,180m)
  • Operating profit of £255m (FY 2017 £208m)
  • Profit before tax of £130m (FY 2017 £77m)
  • Basic earnings per share 24.5p (FY 2017 15.1p)

Balance sheet and cash flow

  • Capital expenditure of £171m (FY 2017 £169m), including 7 openings of new sites and 232 conversions and remodels (FY 2017 13 new sites and 252 conversions and remodels)
  • Adjusted free cash flowa of £(19)ma (FY 2017 £14m)
  • Net debt of £1.69bn (FY 2017 £1.75bn) representing 4.0 times adjusted EBITDAa (FY 2017 4.2 times)
  • Prioritising estate investment and de-leverage against a challenging back drop as previously outlined, no final dividend declared

Definitions

a – The Directors use a number of alternative performance measures (APMs) that are considered critical to aid the understanding of the Group's performance. Key measures are explained later in this announcement.

b – As measured by the Coffer Peach business tracker.

There will be a presentation today for analysts and investors at 8.30am at the Glazier's Hall, 9 Montague Close, London, SE1 9DD. A live webcast of the presentation will be available at www.mbplc.com. The conference will also be accessible by phone: 020 3936 2999 access pin 537637. The replay will be available until 29 November 2018 on 020 3936 3001 replay access pin 286942.

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 for editors:

  • Mitchells & Butlers is a leading operator of managed restaurants and pubs. Its portfolio of brands and formats includes Harvester, Toby Carvery, All Bar One, Miller & Carter, Premium Country Pubs, Sizzling Pubs, 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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