Profit boost for UK pub group

Mitchells & Butlers, the UK pub group whose brands include Harvester, All Bar One and O’Neill’s, has announced that “resisting the temptation of unfocused promotions” has boosted its profits.

The group said like-for-like sales were 0.4% higher over the last year, due to rising prices and increased customer spend. Last year the group launched a “turnaround plan” which saw it focus on improving standards in its pubs, in order to attract revisits and recommendations.

With revenue up 2.2% to £1.89 billion and operating profits 5.1% higher at £312 million in the year to September 28, the company said its strategy remains on track and that its sales currently account for 3% of the £75bn a year currently spent on eating and drinking out in the UK.

In a statement the pub group said: “Our largest brand by sales, Harvester, has just 210 outlets in the UK compared to around 125,000 eating and drinking out venues in total.

“The opportunity for scale operators to grow by taking market share with leading brands is significant in a market of this size.”

In the first eight weeks of the new financial year, Mitchells said like-for-like sales were 0.1% higher on the same period one year ago.

However, it added: “We are cautious about the strength of the economic recovery over the next year and expect ongoing variation by geography and consumer group.”

The company said that it expects to accelerate new openings across its trading segments, over the medium term, to up to 50 a year.