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Half Year Results 2016

(For the 28 weeks ended 9 April 2016)

  • Strong earnings growth; focus on driving profitable sales
  • Review of strategic options completed – focus on accelerating organic growth
  • Clear operational plan in place and already under way

Financial performance

  • Total revenue of £1,096m, down 1.5%
  • Sales uplifts from invested sitesa in excess of 10% in first year offset by decline in uninvested estate to give overall like-for-like sales decline of 1.6%b
  • Adjusted operating profit of £156mc, up 2.0%
  • Adjusted operating margin 14.2%c (H1 2015: 13.7%)
  • Adjusted earnings per share of 15.7pc, up 9.0%
  • Interim dividend of 2.5p approved

Reported results

  • Profit before tax: £83m (H1 2015 £75m)
  • Basic earnings per share: 18.4p (H1 2015 14.4p)

Balance sheet and cash flow

  • Capital expenditure £88m (H1 2015: £94m), including 4 new site openings and 22 conversions
  • Free cash flow before exceptional items of £34md (H1 2015: £50m)
  • Net debt of £1.86bn representing 4.2 times annualised adjusted EBITDAe (H1 2015 4.4 times)

Phil Urban, Chief Executive, commented:

"In the first half we increased our adjusted earnings by 9.0%c. However, in order to accelerate the trading performance of the group there is much to do in our three priority areas: building a more balanced business; instilling a more commercial culture; and increasing the pace of execution and innovation.

During the last six months we have completed a review of our strategic options. I am very clear that our best route for delivering sustainable returns for our shareholders is through the acceleration of organic growth: to maximise the return on the high-quality assets we own. Our plan, to reshape the estate and innovate in both existing and new offers for our guests, is now well under way and I have every confidence in its success."


a – Invested estate comprises 294 sites that have been remodelled or converted in either FY 2015 or H1 2016.

b – Like-for-like sales growth includes 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. Like-for-like sales are measured against relevant accounting weeks in the prior year.

c – Adjusted items are quoted before exceptional items. These comprised a £10m deferred tax credit and £1m profit on property disposals in H1 2016. There were no exceptional adjustments in H1 2015.

d – Free cash flow before exceptional items excludes £21m dividend payment (H1 2015 £nil); £32m (H1 2015 £30m) mandatory bond amortisation; £8m drawn from an unsecured revolving facility (H1 2015 £nil) and, in the prior year, £120m transferred from cash to other cash deposits.

e – Adjusted EBITDA for the 52 weeks to 9 April 2016.

There will be a presentation today for analysts and investors at 9.00am 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: 0203 059 8125 and quote "Mitchells & Butlers". The replay will be available until 25 May 2016 on 0121 260 4861 replay access pin 3236934#.

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)20 7251 3801

Notes for 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, 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.
  • Mitchells & Butlers serves around 140 million meals and 430 million drinks each year and is one of the largest operators within the UK's £80 billion eating and drinking out market.

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