All Bar One owner Mitchells & Butler (MAB) pleased the market with its final update for the year to 23 Sept which showed sales up over 10% on a total basis thanks to a strong second half.

The shares gained as much as 3.7% in early trading to 222.6p before settling back to 218.2p for a gain of 1.7%, while shares in rival pub group JD Wetherspoon (JDW) eased 0.2% to 676p.

STRONG COMPARABLE SALES GROWTH

Total sales for the year were up 10.5%, driven by like-for-like growth of 9.1% after a marked acceleration in food and drink volumes in the March to September period, and stood 10.5% above 2019 levels.

The group, which includes among its brands Ember Inns, Harvester, O’Neill’s and Toby Carvery, posted 9.7% like-for like growth in revenue in the final three months of the period while at the same time keeping a lid on costs which it said were ‘abating and remain at the bottom end of the range’.

According to CGA’s Business Tracker, the whole managed restaurant, pub and bar sector has performed well over the summer with on-premise like-for-like sales up more than 5% in August and staying positive in September despite the mini ‘heat wave’ coming to an end.

In the week to 16 September sales were up 7% on last year following a 16% jump the previous week as temperatures soared, according to CGA.

Investors chase Mitchells & Butlers shares higher as consumers return to pubs

Sales of cider have been particularly strong, with beer sales also recording double-digit growth, although spirits sales have struggled.

POSITIVE OUTLOOK

The firm said that while it remains ‘remain mindful of the challenging macroeconomic environment and pressures on the consumer however, as trading continues to be strong, we have confidence that the current year outturn will be at the top end of consensus expectations, with momentum into FY 2024’.

This chimes with the most recent CGA business confidence survey which showed optimism rising for a third consecutive quarter, with 62% of hospitality firms feeling positive about the outlook for their business over the next 12 months and 45% saying they are confident about the market in general.

‘The figures are a welcome vote of confidence in Britain’s hospitality sector and follow solid trading in 2023 despite pressure on consumers’ disposable income. More than four in five (84%) leaders say they operated at a profit in the second quarter of the year, and 37% did so at a higher margin than in the same period last year’, added the group.

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