Mitchells & Butlers profits fall 24pc despite growth in sales

Nov 27 2009 by Jon Griffin, Birmingham Mail

BIRMINGHAM pub group Mitchells & Butlers has seen profits plunge by 24 per cent as the recession takes its toll on nights out for hard-pressed customers.

The group warned of “uncertain” prospects ahead – but revealed that like-for-like sales had grown by 3.2 per cent over the past two months.

M&B warned: “In particular the outlook for disposable income and consumer confidence could be dampened if VAT and other taxes were to rise.”

The firm posted a fall in pre-tax profits to £134 million for the year to September 26 – when it was hit by rising wages, alcohol duty and energy costs, as well as the onset of recession.

But M&B said it was outperforming both the eating-out and drinking markets.

Cost pressures are so far “more stable and less severe” than the previous year, with energy bills around £10 million lower.

The group also hopes to make £20 million in cost savings during the year.

The company has focused on boosting its food offering after the introduction of the smoking ban more than two years ago. Like-for-like food sales are 5.9 per cent higher so far in the new financial year, compared with a 2 per cent growth in drinks sales.