Mitchells & Butlers Reports Improved Sales Growth

LONDON -- Mitchells & Butlers (ISE: MAB.L) released a generally positive pre-close trading update this morning, but the share price remained basically unaffected, currently up a mere 0.17%.

There's been improved like-for-like sales growth, which is up to 3% in the nine weeks to Sept. 15 and up to 2.1% for the 51 weeks to date. However, as with so many other companies, there was no noticeable benefit to overall sales from the Olympic and Paralympic Games. And while operating margins are reported to be showing progress, full-year margins are still forecast to be a little down on last year.

Bob Ivell, executive chairman, commented:

Trading has held up well over the summer despite the generally adverse weather. Our business transformation program remains on track, driving a sharp focus on enhanced guest service and increased cost efficiency. We look forward to welcoming Alistair Darby next month as Chief Executive and working with him to continue to grow the business, while seeking to further strengthen the Board with the appointment of independent Non-Executive Directors.

Alistair Darby, who joins from his role as chief operating officer at Midlands-based rivals Marstons, faces a considerable task in improving M&B's share price, which languishes at much the same level as three years ago. That said, with M&B's price-to-earnings ratio at just less than nine and its price-to-book value only 1.07, there could be some significant gains to be made if he can revitalize the company.

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