- M&B sales up 10.4% over core festive period
- Fuller’s sales up 10.2% over last five weeks
- Both groups express caution on costs
Shares in Mitchells & Butlers (MAB) were up over 4% to 238.50p in morning trading as the All Bar One owner said the business traded ‘very strongly’ across the festive season with like-for-like growth of 10.4% over the core three-week period.
Across the first quarter, Mitchells like-for-like sales remained well ahead of the market growing by 3.9% despite the ‘very cold and stormy weather’ over the last couple of weeks.
The company signaled a note of caution for this financial year due to increased costs after the changes announced in the Autumn Budget.
Mitchells said however it was ‘confident in our ability to tackle the circa £100 million year-on-year cost headwinds.’
MORE FESTIVE CHEER FOR FULLER, SMITH & TURNER
There was also positive news from pubs operator Fuller, Smith & Turner (FSTA), which like Mitchells & Butler benefited from strong momentum over the Christmas and New Year period with a 10.2% increase in like-for-like sales.
On the whole, trading was strong for the pubs operator for the 41 weeks to 11 January 2025 sending Fuller's shares marginally higher at in morning trading.
The company said it was keen to offer long-term value to shareholders with its ongoing share buyback programme with 5.7 million of the planned 6.5 million repurchased.
‘We also continue to invest in our estate – with a number of major projects planned for the final quarter of the current financial year, including a £4 million investment at the Chamberlain Hotel in the City of London, which is already underway,’ said Fuller’s CEO Simon Emeny.
On the downside, the pubs operator noted ‘fresh cost challenges’ in the new financial year due to increases in employers’ national insurance contributions, national living wage and business rates.
EXPERT VIEW
Russ Mould, investment director at AJ Bell said: ‘Both delivered strong like-for-like growth over the Christmas and New Year period, suggesting that after a difficult time the hospitality sector might finally be staggering back to its feet.
‘These businesses are reaping the rewards of investing in their respective estates – making their venues more attractive places for people to frequent. That investment looks set to continue despite the cost pressures from increased employer National Insurance contributions and an increase in the National Living Wage.
‘The longer-term challenge posed by shifting drinking habits among younger people is still something for the sector to consider but the latest updates from Mitchells & Butlers and Fuller’s show there is still a thirst for socialising over a few drinks.’
DISCLAIMER: Financial services company AJ Bell referenced in this article owns Shares magazine. The author of this article (Sabuhi Gard) and the editor (Ian Conway) own shares in AJ Bell.
