UK: Strong Christmas boosts Mitchells & Butlers

By just-drinks.com editorial team | 29 January 2009

A strong Christmas trading period has lifted revenue by 1% at Mitchells & Butlers, but there is no end in sight for falling beer sales, the UK pub group has said.

Like-for-like sales rose by 1% for the 17 weeks ended 24 January, lifted by a strong Christmas fortnight, Mitchells & Butlers announced today (29 January).

It said its performance remained in-line with expectations in a market where 39 pubs are closing down every week and beer sales are lower than at any point in the last 70 years.

The market situation is likely to get worse rather than better, the group warned today.

"Recessionary pressures are intensifying and as a result, we expect continued sizeable declines in on-trade beer volumes and a significant contraction in the eating out market," it said.

Cost pressures, including rising food and regulatory costs, have also eroded profit margins, said the firm.

Last year, the group cancelled its dividend for the 12 months to end of September in order to meet debt repayments.

Mitchells has so far received GBP20m of GBP52m-worth of disposals on pubs and non-core assets in its current financial year. Its debt facility drops from GBP550m to GBP400m in December this year, it said, adding that it has drawn below GBP460m in the year-to-date.

Sectors: Beer & cider