Wednesday 12 December 2018

World Cup helps boost Irish-backed UK pub firm

M&B backers JP McManus and John Magnier. Photo: SPORTSFILE
M&B backers JP McManus and John Magnier. Photo: SPORTSFILE
John Mulligan

John Mulligan

Mitchells & Butlers, the UK pub chain in which Irish horseracing tycoons JP McManus and John Magnier own a more than 23pc stake, said that England's performance in the World Cup and hot weather helped its drinks sales.

It said food sales came under pressure but have since recovered.

The company, with a £1bn (€1.1bn) market capitalisation, has more than 1,700 pubs and restaurants.

They operate under a number of brands, such as Harvester, O'Neill's, Toby Carvery and Sizzling Pubs. It serves about 400 million drinks and 130 million meals every year.

The two Irish businessmen have owned a combined stake in the FTSE-250 pub group for more than a decade. Their Elpida vehicle, via which they own their shares, is the second-largest shareholder in the chain.

The largest, with just under 27pc, is Bahamas-based British billionaire Joe Lewis.

Mitchells & Butlers said that its like-for-like sales in the quarter to July 28 grew 0.9pc, with a "very strong" performance in its drinks categories being offset by more challenging conditions in its food-led business, reflecting the impact of the World Cup and sustained sunny weather.

England made it as far as the semi-finals in this summer's tournament in Russia, before being knocked out by Croatia.

Like-for-like sales in the drinks category were 3.9pc higher in the 11 weeks to July 28, while food sales were down 1.8pc.

In the financial year to date, total like-for-like sales were up 1.3pc, with food sales 0.3pc higher and drink sales up 2.5pc.

The group noted that cost headwinds remain largely unchanged and are expected to lead to margins being lower than last year.

"Trading was polarised across the company, with the wet-led part of the business delivering very strong growth, but some of the more food-led formats, particularly the carvery businesses, were negatively impacted," said CEO Phil Urban.

"However, we have been encouraged to see sales recover now that the World Cup has finished and as we continue on our longer-term journey."

He added that the company remains confident of delivery a full-year performance in line with the board's expectations.

"The second wave of transformation activity is beginning to bear fruit and momentum behind this programme of work continues to grow," he said.

Mitchells & Butlers opened five new sites and completed 228 conversions and remodels in the financial year to date.

Irish Independent

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