Mitchells and Butlers
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Mitchells & Butlers plc Mitchells & Butlers online Mitchells & Butlers’ comprehensive website gives you fast, direct access to a wide range of Company information. brands • Downloadable Annual report and accounts people • Latest investor news and press releases • Brand news and offers • Responsibility policies and Annual report and accounts 2010 Annual review love • Find a local pub and restaurant • Sign up for latest news Visit www.mbplc.com for more information. Our brands All of our popular brands have their own websites, helping our customers to fi nd the information they need straight away. Latest food and drink menus, news and offers, email newsletters and details of new openings are all available. Annual report and accounts 2010 Harvester Vintage Inns Toby Carvery www.harvester.co.uk www.vintageinn.co.uk www.tobycarvery.co.uk Premium Country Dining Group Sizzling Pub Co. Crown Carveries A collection of attractive individual www.sizzlingpubs.co.uk www.crowncarveries.co.uk pubs each with their own website, for example www.saxonmill.co.uk Mitchells & Butlers plc 27 Fleet Street Birmingham B3 1JP Tel: +44 (0) 870 609 3000 Fax: +44 (0) 121 233 2246 www.mbplc.com Overview Excellent progress Glossary brands has been made against our strategic goal to people turn Mitchells & Butlers into a food-led business. Operating and fi nancial review Operating and fi Amenity On-trade Design, décor, furniture and facilities that contribute Any retail outlet which has a licence to sell alcohol for love to the environment and atmosphere of a pub. consumption on the premises (e.g. pubs, restaurants, nightclubs, clubs). AWT (Average Weekly Take) The average sales per pub per week, calculated as total Operating profi t sales divided by the average number of pubs trading Earnings before interest and tax. during the period divided by the number of weeks in the period. Outlet employment ratio Pub employment costs divided by Retail Sales, Cash fl ow from operations expressed as a percentage. For more information Net cash fl ow resulting directly from regular operations. go to www.mbplc.com Productivity EBITDA Sales less hourly paid wages divided by the number Earnings before interest, tax, depreciation, amortisation. of hours worked. External costs Refi nancing Costs infl uenced by outside factors, e.g. regulatory The repayment of an existing loan with the proceeds and infl ationary costs. from a new loan. Gross margin Retail operating profi t Gross profi t divided by sales, expressed as The operating profi t of the Group excluding the a percentage. operating profi t generated by SCPD. Governance Gross profi t Retail sales Sales less cost of goods sold. The sales of the Group excluding the sales generated by SCPD. HMRC Her Majesty’s Revenue and Customs. Retail margin Retail operating profi t divided by retail sales, expressed Incremental pre-tax returns as a percentage. Growth in annual pre-tax operating profi t expressed Retained Estate as a percentage of the associated capital investment. Retained Estate excludes the major disposals of For sites which do not have 12 months post-investment 333 non core pubs, Lodges and Hollywood Bowl trading, incremental return is estimated based on and a £4m non-recurring onerous lease provision. an annualisation of actual post-investment trading. Same outlet like-for-like sales growth National Minimum Wage The increase in sales performance of all managed statements Financial The minimum amount an employer must pay its pubs that were trading for the two periods employees as defi ned by law. being compared, expressed as a percentage. Off-trade SCPD Any retail outlet which has a licence to sell alcohol Standard Commercial Property Developments for consumption off the premises. Limited, a Group company which holds a small ONS residual land bank. Offi ce for National Statistics. Securitisation A means of raising fi nance secured on a particular group of assets and the associated cash fl ows derived from those assets. Shareholder information Harvester Family-friendly restaurants serving freshly prepared grills, spit-roasts and fi sh dishes and the famous salad cart included with every meal Overview Governance Financial statements 02 Chairman’s statement 27 Directors’ report 55 Group income statement 31 Corporate governance statement 56 Group statement of comprehensive income Operating and fi nancial review 38 Audit Committee report 57 Group balance sheet 05 Chief Executive’s review of the market and strategy 40 Report on Directors’ remuneration 58 Group cash fl ow statement 12 Corporate social responsibility 54 Independent auditors’ 59 Group statement of changes in equity 16 Financial review report to the members of 60 Notes to the fi nancial statements 19 Key performance indicators Mitchells & Butlers plc 99 Five year review 20 Risks and uncertainties 102 Mitchells & Butlers plc – 24 Board of Directors and Executive Committee parent company balance sheet Mitchells & Butlers has delivered a good set of results in Overview challenging economic conditions with earnings per share up 26%. Excellent progress has been made against our strategic goal to turn Mitchells & Butlers into a food-led business by concentrating our industry leading brands on the informal eating-out market. The Company now has a strong balance sheet which, coupled with our brands and resilient trading platform, underpins our confi dence nancial review Operating and fi in the future. Financial highlights Revenue up 1.1% Profit before tax1,2 up 26.1% (£m) (£m) FY 2010 1,980 FY 2010 169 FY 2009 1,958 FY 2009 134 EBITDA1 up 4.9% Adjusted earnings per share3 up 25.8% (£m) (p) FY 2010 449 FY 2010 29.7 Governance FY 2009 428 FY 2009 23.6 Operating profit1 up 7.3% 1 EBITDA, operating profi t and profi t before tax are all (£m) stated before exceptional items and other adjustments 2 After exceptional items and other adjustments, the loss FY 2010 322 before tax was £127m (FY 2009 £10m) 3 Adjusted earnings per share is stated as profi t after FY 2009 300 tax before exceptional items and other adjustments, divided by the weighted average number of ordinary shares in issue Financial statementsFinancial Shareholder information Business highlights Company Retained Estate* Operating profi t up 7.3% to £322m Like-for-like sales up 3.7% in fi rst 8 weeks of new fi nancial year* Profi t before tax up 26.1% to £169m Like-for-like food sales up 6.9% Net cash infl ow of £303m in the year in fi rst 8 weeks* Retained Estate* * Retained Estate refl ects the ongoing business and is stated after exceptional items and other adjustments. This excludes the major disposals of Like-for-like sales up 2.8% in the year* 333 non-core pubs (completed in FY 2011), lodges, Hollywood Bowl and a £4m non-recurring onerous Like-for-like food and drink sales lease provision up 4.7% and 1.4% respectively* Operating profi t of £285m up 14% with margin up 1.9 percentage points to 17.0%* 103 Independent auditors’ report to the members of Mitchells & Butlers plc 104 Notes to the parent company fi nancial statements Shareholder information 111 Shareholder information IBC Glossary Mitchells & Butlers plc 01 Annual report and accounts 2010 Chairman’s This is my fi rst Chairman’s statement. My appointment statement arose after a very diffi cult period for the Company. I hope as shareholders review the progress made in reshaping the portfolio and in sharpening performance in the last year that they will be reassured we are now heading in the right direction. The full focus is now on the business today We have dramatically reduced the number and not on history. Our recent performance, of brands. We have focused resources on our ability to recruit and retain talent and our core high performing brands, such as the heartening investor reaction suggests Harvester, Toby and Sizzling Pub Co., and this is starting to pay off. are building our high potential brands, such as Miller & Carter, Browns and All Bar One. The prospects and fi nancial standing of your In addition, we are evolving our brands and business have been transformed in 2010. menus incorporating our well conceived We now have a Company with an agreed and delivered marketing campaigns. John Lovering strategy, with energised management and Food is now approaching 50% of our Chairman a strong business model, and a substantial ongoing turnover. cash balance of almost £300m in the bank. Our net debt is now down to nearly 50% We have reviewed and made signifi cant of our property valuation and is around fi ve changes to our operational structure. We times EBITDA. are redesigning some of our buying and supply arrangements where we expect Our trading performance has been very to save over £10m on an annualised basis. gratifying. EBITDA was £449m, up 4.9%, Our commercial team have re-examined and our operating profi t was £322m, up our £1bn non-labour related costs and 7.3%. We have moved operating margins are fi nding ways to save money without up by one percentage point and grown impacting on our business. A similar adjusted earnings per share by 26%. We exercise is under way to ensure we get have shown that even in diffi cult economic maximum value from our capital budget. times, consumers want top quality products We will save 15% on comparable projects offering great value not just low prices. in real terms in 2011. Customer satisfaction and market share are at high and improving levels. Mitchells We will ensure our people continue to have & Butlers is regaining its position as the the tools to do the job. We have committed most admired operator of licensed to renew our IT platform in the restaurants catering outlets in the United Kingdom.