Merrymaking pubgoers lift M&B's Xmas sales

By This Is Money
Updated: 11:22 EDT, 27 January 2011

Christmas takings jumped at Mitchells & Butlers pubs as the company shrugged off the impact of the snowfall earlier in December.

Bumper trading: Customers flocked to M&B pubs over festive period

Like-for-like sales rose 6.7% in the key festive trading period of December 23 to January 3.

This softened the impact of the harsh weather, resulting in like-for-like sales growth of 2.5% in the nine weeks to January 22.

Shares in the pub group lifted 5%, or 16.8p, to 359.6p in trading today.

M&B said the improvement in business continued to be driven by demand for food, with like-for-like sales up 5.5% compared with just 0.5% for drinks in the nine-week period.

The group has rolled out a strategy to focus on food sales as part of an overhaul announced in March to invest in its six mid-market eatery chains, including Harvester, Toby Carvery, Crown Carveries and Sizzling Pub Co.

Food now accounts for around 47% of the company's sales and Mitchells estimates that around two thirds of total sales relate to a food occasion.

Looking ahead, M&B said: 'The business continues to perform well, although we are cautious on possible future trends in customer discretionary income and input cost increases in the year ahead.'

M&B is on track to open around 50 new sites across its brands in the current year, in addition to 70 conversions from the existing estate.

Initial results from the first two Harvester sites opened on retail parks were encouraging, it said.

The 2.5% sales growth figure bettered the 1.5% forecast beforehand by analysts at Panmure Gordon and the 1% pencilled in by the market as a whole.

Douglas Jack of broker Numis Securities described the update as impressive and said his forecast for profits in the year to September could rise to £182m if like-for-like sales stayed in the region of 3%.

His current forecast is for £165m, against £175m reported in the year before.