Mitchells & Butlers expands family brands after profit surge

Mitchells & Butlers, the bar and restaurant group, is stepping up expansion of its family brands Harvester and Toby Carvery after growing pre-tax profits by 81pc last year.

Alistair Darby, who took the helm of M&B in October 2012, ending the group’s 18-month search for a permanent chief executive, unveiled pre-tax profits of £150m for the 12 months to September 28, up from £83m the year before.

However like-for-like sales underperformed the wider market, edging up just 0.4pc, after the company reined in promotional activity and focused on growing profit margins through initiatives such as striking better deals with food suppliers.

Like-for-like sales have grown by just 0.1pc in the first eight weeks of M&B’s new financial year - a figure analysts at Barclays said would likely “frustrate” investors.

But Mr Darby insisted the group, which had to fend off a takeover in 2011 from its largest shareholder, billionaire currency trader Joe Lewis, is making progress with its transformation plans.

The company is trying to improve customer experiences, reduce staff turnover, improve its working practices and grow profit margins.

“At this stage of our transformation I am reasonably comfortable with our position,” said Mr Darby. “We don’t want that to persist for any length of time but this is kind of where we expected to be.”

Mr Darby said the company will push through further initiatives such as spending £33m on new tills - a measure it hopes will speed up the amount of time customers have to wait for their bills.

M&B also hopes to open more if its family and “upmarket” brands this year, which include Harvester, Toby Carvery, Miller & Carter and All Bar One. Only 13 new sites were opened under those brands in the last 12 months but this will increase to 30 this year and will rise to 50 a year by 2016 at the latest.

M&B hasn’t paid a dividend since 2008 and Mr Darby said the group won’t consider resuming payments to shareholders until talks over the company’s problematic pension deficit are resolved by June.