It’s all gone a bit flat at Mitchells & Butlers PLC (LON:MAB) reckons Numis, which suggests it’s time for investors to get their coats.
Profits were below estimates, albeit slightly at £181mln, while like-for-like sales growth of 0.5% was disappointing.
Given the cost increases, this level of like-for-like (lfl) sales growth will imply downgrades to market forecasts for results in 2017 suggests the broker.
“We are cautious on the outlook for M&B as we do not expect lfl sales to cover mounting cost headwinds and see a risk of the majority of FCF [free cah flow] being required for the pension deficit recovery plan to be announced in 2017.”
'Reduce' is the view with a 255p target price. Shares eased 5% to 259p.