UK: Mitchells & Butlers sees losses continue in FY as sales steady

Mitchells & Butlers has posted a loss for its full-year as sales inched up slightly.

The UK brewer and pub chain operator said today (26 November) that losses before tax for the year to the end of September came in at GBP10m (US$16.5m) after exceptional items and other adjustments. The losses compare favourably to the year earlier, however, when they totalled GBP238m.

Sales for the 12-month period rose by 2.6% to GBP1.96bn, while operating profits dipped by 12.5% to GBP300m.

Interest rate swaps, retained in 2008 following the proposed property joint venture as an intended hedge against cash flows arising from part of the group's unsecured debt, were closed out in May, crystallising a loss of GBP95m.

"Mitchells & Butlers has produced a robust operational performance in challenging conditions," said chief executive Adam Fowle.

"The second-half trend in net profit margin recovery continues," Fowle continued. "The first eight weeks of the new financial year have started well and the strength of the group's brands, locations, operational skills and cost management mean that we are well positioned for the year ahead."

The company also said today that its chairman, Drummond Hall, will step down "s part of reducing his business commitments". A process has been initiated to fill this role.

Like last year, Mitchells & Butlers said that it will not resume dividend payments to shareholders as its board is "targeting the group's cash flow generation on reducing debt levels, thereby increasing capital appreciation for shareholders". Dividends will not resume "until the borrowings on our unsecured facility are comfortably below GBP300m".

Mitchells & Butlers owns and operates around 2,000 pubs nationwide.