Interactive Investor

ii view: not all bad news for pub group Mitchells & Butlers

16th December 2022 11:33

Keith Bowman from interactive investor

Shares in this FTSE 250 hospitality company have almost halved in 2022. Buy, sell, or hold? 

Full-year results to 24 September

  • Revenue up 107% to £2.21 billion
  • Operating profit up 53% to £124 million
  • Net debt down 6% to £1.68 billion

Chief executive Phil Urban said:

"The trading environment remains highly challenging, with cost inflation continuing to put pressure on margins and we are ever mindful of the pressures that the UK consumer is facing.  However, we are encouraged by the strength of sales growth at the end of last financial year which has improved further into the early weeks of this year.”

ii round-up:

Tracing its roots back to 1898, today Mitchells & Butlers (LSE:MAB) operates just over 1,700 pubs and restaurants.

Its brands include All Bar One, Nicholson’s, Ember Inns, and Toby Carvery. 

For a round-up of these latest results announced on 7 December, please click here

ii view:

The Birmingham headquartered company employs around 46,000 people. It usually serves about 130 million meals and 400 million drinks every year. Other brands include O'Neill's, Sizzling Pubs, Stonehouse, Vintage Inns and Browns. Along with its UK hospitality outlets, it also operates the Innkeeper's Collection of hotels in the UK. Overseas, its Alex restaurants and bars in Germany account for just under 5% of overall sales.  

For investors, the challenging backdrop of rising interest rates and a cost-of-living crisis cannot be ignored. Rising costs across all areas of its business from energy to food and wages now offer a firm headwind, while pandemic related government assistance is over. The weather remains an influence on demand and the dividend remains suspended as M&B concentrates on strengthening its balance sheet.  

On the upside, a recovery in trading from the pandemic remains evident, initiatives including a focus on costs are ongoing, there's a diverse bunch of brands and a focus lowering debt continues. 

The pubs sector is clearly unloved and has been since the pandemic struck. Now it faces a difficult year when the UK will very likely experience a recession and costs will remain high. But Mitchells has outperformed rivals Marston's (LSE:MARS) and Wetherspoon (J D) (LSE:JDW) over the past one- and five-year periods. When a sustainable recovery does begin, Mitchells & Butlers will be one to follow closely.


  • Diversity of brands
  • Reducing net debt


  • Uncertain economic outlook
  • Not paying a dividend

The average rating of stock market analysts:


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