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Mitchells & Butlers froths up to 4yr high as stays ahead of peers

In the 12 months to 28 September, LFL sales grew by 3.5% to £2bn, with average spend per item up 3.4% on food and 4.5% on drink

Mitchells & Butlers - pub
The pub company said average spend was up 3.4% on food and 4.5% on drink

Mitchells & Butlers PLC’s (LON:MAB) shares frothed up to a four-year high after the pubs group performed ahead of the market in the past quarter, defying the low UK consumer spending and bad weather.

Alongside full-year results to 28 September, the FTSE 250 group said over the subsequent five weeks, like-for-like (LFL) sales have risen 1.4% compared to the same period last year, which were better than its peers but lower than growth in the past year.

READ: Mitchells & Butlers continues to outperform the market as Brits are driven to drink

In the preceding 12 months, LFL sales grew 3.5% to £2bn, with average spend per item up 3.4% on food and 4.5% on drink, reflecting price rises and efforts to showcase the quality of the offer.

Adjusted underlying earnings (EBITDA) were 3% higher at £436mln, while statutory profit before tax jumped 26% to £177mln. Free cash flow swung from a loss of £19mln to £11mln.

No final dividend was proposed as part of the firm’s strategy to strengthen the business and knock off debt, which was reduced by 7% to £1.5bn.

According to broker Peel Hunt, which forecasts LFL growth to be up between 2% and 2.5% in the current year, the debt reduction paired with the uptick in EBITDA created 25% growth in equity value.

Shares were up 4% to 465.5p on Wednesday morning, reaching levels not seen since summer 2015

Quick facts: Mitchells & Butlers

Price: 405.5 GBX

Market: LSE
Market Cap: £1.74 billion

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