• Revenues up 1.1% to GBP1,980m
  • Pre-tax profits surge 26%
  • EPS falls to loss 
Mitchell & Butlers has reported a 26% rise in pre-tax profits

Mitchell & Butlers has reported a 26% rise in pre-tax profits

UK pub group Mitchell & Butlers has reported a 26% rise in pre-tax profits today (23 November), but warned that the outlook for consumer spending in the UK remained uncertain in the light of public sector spending cuts.

The company said that sales for the year were up 1.1% to GBP1.98bn (US$3.15bn), with operating profits up 7.3% to GBP322m. However, the company fell to a loss in full year earnings per share after exceptional items of 20.6p, compared to earnings per share of 1.0p last year.

Profit before tax reached GBP169m.

"We have delivered a very good set of results in challenging economic conditions with earnings per share up 26%," said Adam Fowle, chief executive. "Excellent progress has been made against our strategic goal to turn Mitchells & Butlers into a food-led business by concentrating our industry leading brands on the informal eating-out market.

"This strategy continues to prove effective with 7% like-for-like food sales growth in the first eight weeks driven by customers trading up the menu. The company now has a strong balance sheet which, coupled with our brands and resilient trading platform, underpins our confidence in the future," he added.

Total company food sales increased by 4.5% whilst drink sales were down 0.7%, held back as a result of the disposal of drinks-led pubs during the year, the group said.

As indicated in May, the company said that its board is committed to a resumption of dividend payments.

"The board will closely monitor the level of operating cash flow generation and capital investment opportunities for the business during 2011 before taking a decision on the timing and quantum of the resumption of dividend payments," it said.

Looking ahead the group said: "The outlook for consumer spending remains uncertain in light of government spending cuts and the VAT increase in January. However, the strength of Mitchells & Butlers' brands, the effectiveness of its marketing platform, its operational capabilities and strong capex returns underpin the board's confidence in the company's prospects."

For full details on the company's results, click here