Still of the view that the Board should reduce the number of brands. The worst performers should be reviewed in order to release value to shareholders by both capital and income. Without some drastic action, MAB will just crab sideways awaiting the next 'hit' from the Chancellor whether by tax, minimum wage increase or some other unforeseen matter.
""""Trading through the core three week festive season was strong, with LFL sales growth of 3.9%. Christmas Day was a record taking day with like-for-like sales growth of 5.4% and 225,000 meals sold.
Over the full 7 week period since our last update our sales performance has been encouraging, although impacted by the adverse weather particularly in the run up to the festive season. The additional (53rd) week in the previous financial year impacts comparison of sales performance across key dates within this trading season. Adjusting for this to align calendar dates like-for-like sales growth was 1.6% over the previous 7 weeks and 2.2% in the year to date.
On an unadjusted basis, like-for-like sales growth in the year to date was 1.1% and total sales have increased by 0.5%, impacted by the disposals in the prior year."""
"With stockmarkets still close to all-time highs, it's become increasingly tough for income seekers to source stocks at a decent price. In fact, the typical dividend yield paid by a @GB:ASX:FTSE All-Share company now sits at a mediocre 3%.However, ..."
It seems that M&B have in the region of 15 to 20 brands. This is just too many - the overhead duplication must be horrendous. In order to improve shareholder value some consideration ought to be given to selling some of these groupings including the Alex in Germany. Time to whittle down - pick the best and get rid of those performing the worst of all. Sales ought to be above net asset value given the current SP compared with NAV.
"Pub group Mitchells & Butlers was under pressure after Canaccord Genuity downgraded the stock to 'hold' from 'buy' and cut the price target to 285p from 350p.
The brokerage said M&B's reasonable return on invested capital and balance sheet strength rankings are not enough to offset poor free cash flow conversion and earnings growth scores, which result in a bottom quartile ranking on its investment screen.
"Nascent recovery could get blown away by rising headwinds; it is the most food-led of the pubcos which leaves its profit before tax and ambitious capex plans vulnerable to rising costs and competition.
"Accordingly, we move our recommendation to hold."
Canaccord pointed out that M&B is in the first year of a plan to reduce the investment cycle to 6-7 years/pub from the current 10-12 years. It will spend £200m a year refurbishing 300 sites a year."
Well today's announcement is better news. Whilst being slow in coming it does look like a corner has been turned, at long last - my last post was November 2015! Keep up the good work Mr Urban and your team. Happy New Year!!!
Note the possible bid for Punch announced this morning.
A takeover of MAB would be just great too.
New management is needed to achieve a much better return on MAB's assets. SP decline over the past several months has been significant and the current board seem incapable of arresting the decline. Maybe they ought to consider establishing a chain of coffee shops? Not original but there are still gaps in the market.
Come on Mr Urban and Mr Jones. Step up or step aside. New ideas needed and that does not include buying anything more, at least until you have made much more of those already acquired. Please.
If the price closes below 243 then it looks to be 228-231 next. Even that isn't necessarily the bottom. After that the 212 area becomes what would appear to be a strong support. I still have no position.
Haven't held these for a few years, but bought at 259.3 as thought drop was overdone on results, Missed the bottom but good to see SP already beginning to climb back. Only a few days to ex-div will see whether to retain or sell. Will probably bomb now!
"Shares in Mitchells & Butlers gained on Wednesday after HSBC upgraded the stock to 'buy' from 'hold' and raised the target to 340p from 300p.
HSBC said while the company's first half results showed weak trading trends, the new chief executive Phil Urban has a "credible plan for improvement".
Mitchells & Butlers, which owns Harvester, All Bar One and Toby Carvery, reported a 1.5% fall in revenue to £1.1bn although pre-tax profits climbed to £83m from £75m.
CEO Urban announced plans to reduce stores at its Harvester chain to address fierce competition and real wage inflation following the introduction of the National Living Wage.
The group has also boosted investment in the refurbishment of sites to make them more attractive to customers. It follows a review which showed revamped outlets had done better than un-refurbished sites.
"We think that this is the right approach. As we show in this note, M&B has repeatedly underinvested in its sites, so it's hardly surprising that customers have gone elsewhere," HSBC analysts said in a note.
"We calculate the capital expenditure (capex) shortfall could be around £140m over the last five years. The new strategy addresses this; a £20m step up in capex per annum, along with a reduction in new site openings releases much more to be spent on refreshing the existing estate and converting underperforming sites into different brands."
HSBC said the shares have underperformed compared to its peers, trading on a fully adjusted enterprise value/earnings before interest and tax (EV/EBIT) discount of 12% to the wider sector.
The bank added that its sees value in the shares. "If sales begin to recover, as expected, and earnings forecasts stabilise, then the valuation should move back towards the wider sector."
The Frankie & Bennys owner, down 22.7 per cent to 420p, blamed weaker consumer sentiment, lower footfall and no repeat of 2015s strong cinema slate. Analysts saw oversupply in the casual dining sector as a bigger problem, which sent Mitchells & Butlers lower by 7.7 per cent to 267.6p. Cineworld also suffered, sliding 3.2 per cent to 480.4p a day before results.
" Just two-and-a-half trading days long, this is easily the shortest timeframe in our "Share of the week" series. Still, there have been some real standout performers, and competition for top spot was fierce. One share does, however, rise above ..."
"Choosing one of the best AIM performers of 2015 last January in my AIM tips of the year has ensured a strong performance from the portfolio of five companies.Three of the other four have also done well and they have outperformed both the FTSE AIM ..."
"MITCHELLS and BUTLERS PLCÂ (LSE:MAB) starts our week, simply because we notice it was mention on Interactive Investor front page at a moment when we were looking for inspiration.Â It's a share which is almost too obviously dangerous as the ..."
I topped up this morning following the very weak share price; trading at P/E ratio of 13-14 as of this morning. I'm not sure the living wage increase will be as significant & damaing as the markets fear; more money for the consumer to spend with afterall.. all goes around
Visiting my local Toby carvery today which was at capacity and 45 minute wait for a table during which time bar was on hand for a couple of pints.
I wonder how a chain which has such high turnover has been in doldrums for so long. Local
management confided that previous CEO had been a disappointment but with 1700 pubs and
restaurants its going to need someone with immense charisma to gain respect down to the
We had an excellent portion of beef but the manager said he struggled with irregular quality. Recently had to cut slabs of fat from a joint with impacts on his profit and that lodging complaints about poor quality supplies was difficult when there were hundreds of similar outlets.
Will be interesting to watch whether new man can make a difference.
<b>Mitchells & Butlers plc Receives Consensus Recommendation of Buy from Analysts (LON:MAB)
September 9th, 2015</b>
Mitchells & Butlers plc (LON:MAB) has received an average recommendation of Buy from the sixteen research firmsthat are covering the firm, MarketBeat Ratings reports. One investment analyst has rated the stock with a sell recommendation, six have given a hold recommendation and nine have assigned a buy recommendation to the company. The average twelve-month target price among brokers that have issued a report on the stock in the last year is GBX 466.58 ($7.09).
A number of brokerages recently issued reports on MAB. Citigroup Inc. restated a buy rating and set a GBX 495 ($7.52) target price on shares of Mitchells & Butlers plc in a report on Monday. Canaccord Genuity reiterated a buy rating and set a GBX 500 ($7.59) price objective on shares of Mitchells & Butlers plc in a report on Friday, July 24th. Goodbody Stockbrokers Ltd reissued a buy rating on shares of Mitchells & Butlers plc in a research report on Thursday, July 30th. JPMorgan Chase & Co. cut their price target on Mitchells & Butlers plc from GBX 470 ($7.14) to GBX 440 ($6.68) and set a neutral rating on the stock in a research report on Wednesday, July 29th. Finally, Barclays reissued an equal weight rating and set a GBX 500 ($7.59) target price on shares of Mitchells & Butlers plc in a research note on Wednesday, July 22nd.
Shares of Mitchells & Butlers plc (LON:MAB) traded up 1.7782% during mid-day trading on Wednesday, hitting GBX 360.6000. The company had a trading volume of 130,412 shares. Mitchells & Butlers plc has a 1-year low of GBX 316.00 and a 1-year high of GBX 485.10. The companys market capitalization is GBX 1.48 billion. The company has a 50-day moving average price of GBX 374.17 and a 200-day moving average price of GBX 427.60.
Mitchells & Butlers plc is an operator of pubs managed eateries and bars. The Business provides a selection of eating and drinking -out. The Business operates in the UK. The Companys brands include Sizzling Pubs, Vintage Inns, Harvester, Ember Inns, Toby Carvery, Crown Carveries, Fortress, Nicholsons, Premium Country Dining Group, ONeills, Alex, All Bar One, Village Pub & Kitchen, Miller & Carter, Browns, Innkeepers Lodge and Oak Tree. The Organization manages approximately 1,700 restaurants . and pubs
Alot of weakness in the market as of late. However I left this share has fallen to an attractive buy level now, it may have more to fall considering the current market correction. Increased my share holding by 24%.
I do think it's a sector that's not exposed by the main factors that are causing the current correction (Metals/Oil etc).
Deckhard - the Living Wage statement in the budget is the reason for the fall. M&B are going to have to pay their staff a lot more and that will hit their bottom lines as they probably won't be able to pass on all of their rise in costs. However, I think the selling over the past couple of weeks has been overdone.
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