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Mitchells & Butler half-year results - no dividend

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daveh
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Mitchells & Butler half-year results - no dividend

#223866

Postby daveh » May 23rd, 2019, 9:02 am

Dividends

The Board is not declaring an interim dividend. As previously set out and in making this assessment the Board is mindful of its fixed charge obligations (notably debt service and pension payments) and considers the need to continue investment to maintain the condition and competitiveness of the estate to be of primary importance for the long-term health of the business.




- Adjusted operating profit and margin growth
- Continued market outperformance
-Momentum growing from fresh initiatives

Trading results
-Like-for-like sales growth of 4.1% in the first half
-Adjusted operating profit growth of £10m to £151m (H1 2018 £141m)
-Adjusted earnings per share growth of 15.8% to 16.1p (H1 2018 13.9p)


Operational highlights
-Strong first half with market outperformance and return to profit growth
-Improved returns from capital programme with 208 projects completed
-Sales focused initiatives driving improved performance across the portfolio
-Efficiencies resulted in increased operating margin of 12.7% (H1 2018 12.5%)

Reported results

-Total revenue of £1,186m (H1 2018 £1,130m)
-Operating profit of £140m (H1 2018 £137m)
-Profit before tax of £75m (H1 2018 £69m)
-Basic earnings per share of 14.3p (H1 2018 13.0p)

Balance sheet and cash flow
-Capital expenditure of £90m (H1 2018 £104m), including 2 new site openings and 206 conversions and remodels (H1 2018 220)
-Adjusted free cash flowa of £23m (H1 2018 £(3)m)
-Net debt reduced to £1.63bn (H1 2018 £1.72bn) representing 3.8 times adjusted EBITDAa (H1 2018 4.1 times)


So other than the lack of dividend the results look pretty good with profits up and debts down.

Not a share I'd buy for my HYP now as it has no dividend, but is a hold over from a purchase of Six Continents (or perhaps even Bass brewing) as my very early records in my spreadsheet were added after the event - I have it recorded as a purchase of SXC in February 2001 which split into MAB and IHG and the latter has been much the better performer.


Why am I hanging onto MAB? Well it is a very small holding so I'd not considered it worth the dealing fee selling. I was tempted to sell recently, but, for the first time last year I actually used some of the 20% off vouchers share holders are given (for our work Christmas meal which was at All Bar One) and saved more than the shareholding is worth. So I've decided it worth keeping just for the shareholder perks.

Bouleversee
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Re: Mitchells & Butler half-year results - no dividend

#223934

Postby Bouleversee » May 23rd, 2019, 11:40 am

I acquired mine the same way (Six Continents) and performance has been unimpressive. I haven't tried any of their restaurants. Are they any good? I am expecting a house guest soon and will want to eat out for a change (Bucks.)

Gengulphus
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Re: Mitchells & Butler half-year results - no dividend

#224111

Postby Gengulphus » May 23rd, 2019, 10:48 pm

HYP1 also owns Mitchells & Butlers, and Intercontinental Hotels as well, having acquired both as Bass in its initial purchases, then seen it renamed to Six Continents, then demerged into the two companies. The subsequent history reveals Mitchells & Butlers as the 'poor relation' in that demerger: HYP1's Intercontinental Hotels holding was about 50% larger than its Mitchells & Butlers holding immediately after demerging, but by last year's annual review, it had become about 10 times larger than it on both capital and income - and the Intercontinental Hotels holding has thrown off numerous returns of capital for several years now that HYP1 has reinvested elsewhere due to its low yield, while AFAIAA Mitchells & Butlers haven't done anything similar since pre-financial-crisis days (when both companies did various returns of capital that HYP1 reinvested into the holding that generated them, basically reversing the effect of returning the capital apart from a small loss due to trading costs).

Not certain whether there's any lesson to be learned from that, other than possibly that foreseeing how a company will develop is hard!

Gengulphus

daveh
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Re: Mitchells & Butler half-year results - no dividend

#224146

Postby daveh » May 24th, 2019, 8:49 am

Bouleversee wrote:I acquired mine the same way (Six Continents) and performance has been unimpressive. I haven't tried any of their restaurants. Are they any good? I am expecting a house guest soon and will want to eat out for a change (Bucks.)



We ate out at All Bar One for our Xmas party and it was fine for that. I recently took my Mum to a Miller and Carter Steakhouse and it was a decent meal. Both were in Aberdeen though, so rather a long way from Bucks.

So no reason to worry about M&B from my very small sample of their pubs/restaurants.

Bouleversee
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Re: Mitchells & Butler half-year results - no dividend

#224166

Postby Bouleversee » May 24th, 2019, 9:45 am

Thanks. I may give them a whirl and after all the recent share disasters the discount will be welcome, as was yesterday's surprising rise in the M&B s.p. Hopefully, that augurs well for the future.

As has been said, IHG has done incomparably better and I was impressed by the kind assistance I received from the receptionist at one of their hotels where I pulled in after the heat shield on my car came adrift on the way back from the station after an outing without taking my AA card.


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