Mitchells & Butlers PLC (LSE:MAB)’s “outstanding” interim financial results posted last week have caused analysts at Shore Capital Markets to raise their profit and cash-flow estimates for the London-listed hospitality group.
The results suggested the All Bar One and Harvester owner was the hospo stock of choice for “bigger profit, bigger value”, according to Shore Cap’s gushing take on the results.
Profits before tax (PBT) reached £108 million in the 28 weeks to April 13, a marked improvement compared to the £40 million achieved in 2023.
As a result, Shore Cap upgraded its full-year PBT forecast by £18 million to £187 million, while net debt to EBITDA is expected to fall to 3x this year and down to 2x the following year
“Importantly, cash flow is now broadly covering mandatory bond repayments, bringing increasing optionality to the investment case,” analysts added.
Rising property values and falling debt should positively impact M&B’s net asset value while the share price discount should continue to narrow, the broker added.
Shore Cap has a buy rating on the stock, which is currently trading at 305p.