LONDON -- The shares of Mitchells & Butlers stumbled 4%, to 392 pence, early this afternoon after the bar and pub chain failed to meet market expectations, despite reporting a 5% improvement in adjusted half-year profits.
The company's revenues increased only marginally, by 2%, to reach 1 billion pounds, while sales were flat on a like-for-like basis. Profits for the period jumped 72%, to 72 million pounds, from 48 million pounds last year.
Mitchells & Butlers -- which owns the Toby Carvery and All Bar One chains -- blamed its difficult trading performance in January and March on the snowy weather. However, the pub chain claimed this was offset by strong sales during key Christmas, Valentine's, and Easter holidays.
The company said it had benefited from cost savings made through last year's major restructuring plans. Chief executive Alistair Darby said:
Having now delivered our restructuring cost savings in full, we have identified specific market segments where we can grow successfully and we have outlined clear operational priorities. By focusing on these areas, I believe that we will provide great experiences for our guests and sustainable returns for our shareholders.
With a market cap of 1.6 billion pounds, Mitchells & Butlers is valued at 12 times its latest earnings, and offers a prospective dividend yield of 2%.
Of course, whether that valuation, today's results and the prospects for the pub industry combine to make Mitchells & Butlers a buy is something only you can decide.
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