All Bar One proprietor hit by summer time riot disruption

Mitchells & Butlers’ city centre hospitality venues saw revenues impacted by disruption related to the riots across England and Northern Ireland in August.

The All Bar One owner told investors on Thursday the summer riots had combined with ‘unseasonably cool and wet’ weather to cause a slowdown in sales during the final three months of its financial year.

The group, which also owns Harvester and Toby Carvery, saw revenue growth slow to 2.5 per cent over the period, maintaining a deceleration from growth of 7.7, 6.1 and 3.4 per cent in quarters one, two and three, respectively.

The All Bar One owner’s city centre venues faced disruption related to the August riots  

But the pub group said it remains ahead of the market, with sales growth of 5.2 per cent in the year-to-date, and it now expects full-year results to be at the upper end of consensus forecasts.

Net cost headwinds have also fallen to £55million this year despite a sharp rise in labour costs, which have been ‘substantially mitigated by deflation in our energy costs… slowing food cost inflation and strong cost control at site level’.

Phil Urban, chief executive, said: ‘We enter the new financial year armed with a fresh wave of initiatives under our Ignite programme and a full capital investment programme planned to deliver cost efficiencies, increased sales and to further drive market out-performance and increasing profitability.’

Mitchells & Butlers shares were up 3.5 per cent to 307.5p by late morning. 

Adam Vettese, market analyst eToro, said: ‘Whilst growth has slowed, it is relative to the industry as a whole, and it seems the company has a firm handle on controlling costs whilst inflation easing off also helps with this.

‘Investors will hope this helps shares tick up further this year and build on the 10 per cent they have gained so far. 

‘They would need to gain some 50 per cent in order to reach their pre-Covid highs.’

Mitchells & Butlers also told shareholders it continues to invest in its estate, with 185 conversions and remodels in the year to date and six new sites opened.

‘[This is] in addition to the continued rollout of a number of initiatives to reduce energy usage, such as solar panels and sensors,’ it added.

Derren Nathan, head of equity research at Hargreaves Lansdown, said: ‘The group has been consistently outperforming the market and it’s not taking its eye off the ball, continuing to prioritise investment in the estate when it comes to the use of cash.

‘With 50 pubs a month closing in the first half of 2024 in England and Wales, solid operators like Mitchells & Butlers are well placed to keep mopping up market share.’