Mitchells & Butlers cheers profits leap after feasting on restaurant closures

Toby Carvery and All Bar One owner Mitchells & Butlers on Wednesday toasted higher sales and said it has “undoubtedly” benefited from a wave of struggling restaurant chains closing sites.

The FTSE 250 firm, which is also behind the Nicholson’s and Harvester brands, said revenues rose 3.9% to £2.3 billion in the year to September 28. Comparable sales were up 3.5%.

Pre-tax profits were 36% higher at £177 million, and comparable sales increased 1.4% in the first seven weeks of the current financial year.

Shares in M&B, which has been investing into its estate, leapt 34.5p, or more than 7%, to 480.5p.

The company has seen a number of casual dining competitors, such as Carluccio’s and Giraffe, do controversial company voluntary arrangements. Those are restructure models that allow firms to close shops or get rent cuts.

Many restaurants are grappling with higher business rates and wage bills.

M&B’s boss Phil Urban said he doesn’t like to see rivals get rent reductions, but thinks “CVAs are just a stay of execution.”

Urban added: “In the medium term closures undoubtedly help those who are left behind.”

Analysts have speculated M&B could be the pub sector’s next takeover target following a series of deals this year, including Stonegate swooping to buy Ei.