Pub group Mitchells & Butlers says new year trading 'strong'
Pub group Mitchells & Butlers, which has endured boardroom intrigue and an investor feud in recent months, has said that trading in its new financial year has "remained strong", with like- for-like sales growth of 3.4pc in the six weeks to January 2.
Irish horseracing tycoons JP McManus and John Magnier own a combined 17.6pc share in Mitchells & Butlers (M&B), via their Elpida investment vehicle.
Superquinn executive chairman Simon Burke has been nominated as a non-executive director to the company amid efforts to quell unrest between the board and its largest single shareholder, British billionaire, Joe Lewis. He owns 22.8pc of the pub group through his Piedmont vehicle. Lazard Bank has nominated Mr Burke to the board on behalf of Mr Lewis.
M&B said yesterday that sales in a 10-day period over Christmas and New Year were 4.9pc higher than the same time in 2008.
Shares in the company soared 9.6pc yesterday to close at £2.74 in London.
The pub group owns and operates about 2,000 outlets across Britain, under names such as O'Neill's, All Bar One and Harvester. It added that the board remains "cautious" on the outlook for consumer spending in the UK, especially in the second half of the year.
In the first 14 weeks of its financial year, like-for-like sales at outlets it has operated for at least a year climbed 3.3pc.
The trading update was roundly welcomed by analysts.
"At last we have signs that some of the margin erosion conceded over the recent years is capable of being reclaimed, with M&B indicating that across the last 14 weeks margins have improved by 150 basis points," said brokerage Charles Stanley yesterday. It lifted its price target for M&B stock to £3.25 from £3. Another brokerage, Altrium, raised its price target to £3.15 from £3.
M&B holds its annual general meeting later this month, when shareholders will be asked to vote on the election of Mr Burke and other non-executives to the M&B board.
Last month, the board of M&B removed four non-executive directors, including former EU Commissioner and Tanaiste Ray MacSharry, after it claimed the directors had not been exercising judgment independently of each other "in the interests of all shareholders".