Mitchells & Butlers FY13 Profit Rises, Stock Up

(RTTNews) - Shares of Mitchells & Butlers Plc (MAB.L, MLB) climbed more than 6 percent in the morning trade after the operator of managed restaurants and pubs reported Tuesday that its fiscal 2014 pre-tax profit nearly doubled mainly reflecting lower charges and higher like-for-like sales. In the first eight weeks of fiscal 2014, the company reported that like-for-like sales edged up 0.1 percent.

Looking ahead, the company said that it is cautious about the strength of the economic recovery over the next year and expect ongoing variation by geography and consumer group.

Chief Executive Alistair Darby said, "We have worked hard this year to deliver our transformation plan and position Mitchells & Butlers for future growth. We are proud that, through the measures we have taken, we have been able to grow sales and build our margins in a challenging and competitive consumer environment, leading to EPS growth of 17 percent."

For the year, profit before tax surged to 150 million pounds from 83 million pounds last year. The latest results included exceptional charges of 34 million pounds, while last year's charges were 83 million pounds. Adjusted profit before tax, which excluded items, was 184 million pounds, compared to 166 million pounds a year ago.

Profit for the period increased to 135 million pounds from the previous year's 70 million pounds, with earnings per ordinary share improving to 32.7 pence from 17 pence last year. Adjusted earnings per ordinary share for the year grew to 34.7 pence from 30.2 pence in the prior year.

Total annual revenues for the 52-week period were 1.895 billion pounds, compared to 1.889 billion pounds for last year's 53-week period. On a 52-week basis, revenues increased 2.2 percent.

The company attributed the growth in revenues to food sales growth of 3.3 percent, with drink sales growth of 1 percent. The company noted that food sales now account for more than half of total sales, reflecting the business's strategy to generate long term growth from this market.

Like-for-like sales growth of 0.4 percent included like-for-like food sales growth of 0.8 percent, partly offset by like-for-like drink sales decline of 0.2 percent. The comparable sales were driven by increases in price and spend, despite lower volumes in both categories.

Food sales growth was weighted towards the first half of the year, with a number of the year's key calendar events, while the second half saw stronger drink sales growth, mainly reflecting the impact of good weather.

Operating margin increased 0.5 percentage points to 16.5 percent on a 52-week basis with good progress across all priority areas.

At the end of the year, the business comprised 1,589 managed sites and 60 leased or franchised sites, in the UK and Germany.

In London, Mitchells & Butlers shares are currently trading at 414.40 pence, up 23.40 pence or 5.98 percent.