A busy Christmas re-ignited interest in Mitchells & Butlers (MAB), owner of Harvester, Toby Carvery and All Bar One, helping our well-timed buy tip (393p, 31 Oct 2013) serve up a 26 per cent gain in just four months. These half-year numbers met expectations, and clarity on pension funding was welcome. But both that festive cheer and the six-year share-price high are a distant memory. Patience is required.
Like-for-like sales grew just 1.1 per cent, and underlying pre-tax profit was only marginally higher at £77m, held back in part by Easter, which fell outside the period this year. Food volumes, which dropped sharply in 2013, recovered slightly, while drink volumes were little changed after a 6 per cent slump a year ago.
Net debt remains stable at £1.7bn, or 4.1 times annualised cash profits. Moreover, with the triennial pensions valuation now agreed – annual contributions rise from £40m to £45m for the next three years, with RPI-linked increases thereafter – chief executive Alistair Darby can begin thinking about a return to the dividend list, perhaps at the full-year results.
Broker Panmure Gordon expects full-year adjusted pre-tax profit of £186m, giving adjusted EPS of 35.5p (2013: £184m/34.7p).
MITCHELLS & BUTLERS (MAB) | ||||
|---|---|---|---|---|
| ORD PRICE: | 408p | MARKET VALUE: | £ 1.7bn | |
| TOUCH: | 408-409p | 12-MONTH HIGH: | 495p | Low: 346p |
| DIVIDEND YIELD: | NIL | PE RATIO: | 13 | |
| NET ASSET VALUE: | 311p | NET DEBT: | 135% | |
| Half-year to 12 Apr | Turnover (£bn) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2013 | 1.0 | 68.0 | 13.4 | nil |
| 2014 | 1.0 | 68.0 | 12.9 | nil |
| % change | +3 | - | -4 | - |
