M&B pubs cheered by 7.7pc rise
Published 20/05/2010 | 05:00
UK PUB group Mitchells & Butlers, in which Irish horse racing tycoons John Magnier and JP McManus have a 17.6pc stake, posted a 7.7pc rise in pre-exceptional earnings to £225m (€262.7m) in the first half of its financial year as revenue climbed 1.3pc to almost £1.04bn (€1.2bn).
The solid performance during the period ended April 10 is a rare piece of good news for shareholders in the chain, which has been beset by a lengthy boardroom battle involving its single biggest shareholder. It shook the company and was only recently resolved. The revamped board now includes Superquinn boss Simon Burke as a non-executive director.
Pre-tax, pre-exception profit at the group, which owns pubs such as O'Neill's and All Bar One, jumped 55.3pc to £77m (€89.8m) as sales of food helped to boost the bottom line. Bad weather and a return to the regular VAT rate in the UK after an emergency cut adversely affected sales in the second quarter, according to M&B.
Chief executive Adam Fowle said that the results underpinned the group's strategy of increasing shareholder value by focusing on its food brands. The company has also indicated that it might start paying a dividend again at the year-end. The group is also seeking to dispose of about 300 of its 2,000 outlets.
M&B had been caught up in an ugly corporate affray since last year, with Bahamas-based billionaire Joe Lewis, the group's biggest shareholder, pushing for board changes. The group's chairman was ultimately ousted as were non-executive directors including former finance minister and EU commissioner Ray MacSharry amid allegations that some parties were acting in concert.
But those allegations were totally unfounded, according to the UK's Takeover Panel. Last week, the board of M&B publicly apologised to Mr MacSharry for the manner in which he was ejected from the board and paid him undisclosed personal and legal expenses.
Shares in M&B had risen 3pc by lunchtime in London to £3.12, valuing the joint McManus-Magnier stake at £228m (€266m). That's significantly less than the cost of acquiring the shareholding.