Mitchells & Butlers reports like-for-likes down 1.6%, to grow Miller & Carter to 100 sites, plans to shrink Harvester: Mitchells & Butlers has reported like-for-like sales fell 1.6%in the 28 weeks to 9 April. Sales in invested sites rose by more than 10%, offset by declines in uninvested sites. Adjusted operating profit rose by 2% to £156m and pre-tax profit was £83m (H1 2015: £75m). Chief executive Phil Urban said: “In the first half we increased our adjusted earnings by 9.0%c. However, in order to accelerate the trading performance of the group there is much to do in our three priority areas: building a more balanced business; instilling a more commercial culture; and increasing the pace of execution and innovation. During the last six months we have completed a review of our strategic options. I am very clear that our best route for delivering sustainable returns for our shareholders is through the acceleration of organic growth: to maximise the return on the high-quality assets we own. Our plan, to reshape the estate and innovate in both existing and new offers for our guests, is now well under way and I have every confidence in its success.” The company added: “We believe that we have the best estate in the industry, with an outstanding array of outlets across the country. However, we recognise that elements of this estate have been under-invested in recent years, with capital expenditure having been directed towards necessary back-of-house investment in technology and kitchens, rather than guest-facing areas which would drive sales growth. This under-investment is manifest in the disparity between the strong sales performance in sites where we have recently invested as against declines where we have not. We also need to ensure that we make best use of our strong brands, by matching them individually to the right sites. We have completed a full review of the estate, with a plan for every individual site to be achieved by 2020. This plan is aimed at building a more premium estate, by converting sites where appropriate into growth concepts, and with a small number of selected disposals. A key feature to the estate plan is the level of investment. In order to remain competitive in this environment, and to fully leverage the power of our brands, we must invest in improving and maintaining amenity levels across the estate. As such we have accelerated our investment in remodels and conversions. We will aim for 300 to 350 sites per year, equivalent to a five to six year investment cycle compared to the cycle of over ten years on which we have been operating. This acceleration has begun already, with 142 remodels completed in the first half of this year, compared with 97 in the same period last year. Our estate plan will result in us taking action across the premium, mid-market and value areas of our estate, three significant examples are described below: At the premium end of our estate, we will look to grow the Miller & Carter brand towards 100 sites by 2018, from a current level of 43. This is a brand with a clear and attractive offer to guests, and one which consistently delivers strong like-for-like sales and volume growth. We completed three Harvester to Miller & Carter conversions in the first half, all of which are trading very well in their first few months with Ebitda returns well in excess of the targeted 30%. Following these early successes and given the strength of the Miller & Carter brand proposition, we have identified a number of further sites which are suitable for conversion to the brand. Within the mid-market, Harvester is an example of a fantastic brand with high-taking sites and great consumer resonance, but which has had some challenges in recent years. Harvester has been competing in a market which has seen significant new openings, with competitor offerings often being well-invested. By contrast, too many of our 233 Harvester sites have been under-invested in guest-facing areas in recent years, making it difficult to remain competitive in their local markets. Over time we are looking to reduce the scale of the Harvester estate to a core, all of which will be remodelled within the next 18 months, offering a consistent proposition and a level of amenity to truly leverage the brand’s strength. Within our value-led sites we are rolling out our successful Pizza & Carvery format, of which there are currently 14 sites that previously traded as Crown Carveries. These sites have been trading well, generating Ebitda returns of around 25%. We will convert around 20 more by the end of FY 2016, with plans for a total of more than 80 by 2018. The format offers a compelling conversion opportunity for a number of our Crown Carveries sites, and selected sites from the unconverted Orchid estate. Our plans in this area are already well under way. In the current year we have accelerated our capital programme and anticipate delivering around 260 remodels and conversions plus ten new site openings, at a total capital cost of around £180m. Next year we anticipate delivering around 300 remodels and conversions, supplemented by around 15 new site openings, at a total capital cost of around £200m.”

Freehold of Brighton pub let to Greene King sells at auction for £4.1m: The freehold of a Brighton pub let to Greene King has sold at auction for £4.1m, which means the buyer earns a 7% yield on their investment. The grade II-listed building, which trades as The King & Queen, was sold at an Allsop auction. Greene King holds the lease until 2034 and pays an annual rent of £307,971 per annum, rising to a minimum of £366,084 by 2023. The pub, which at 21,762 square feet is Brighton’s largest according to its website, is located within a conservation area situated on the west side of Marlborough Place and is accessed by the A23. It overlooks Victoria Gardens, just to the north of the Royal Pavilion. The pub was the highest value lot sold at the auction, which raised more than £114m. It was the largest Allsop May auction held since 2006 with 167 lots sold, 30 of which being at or in excess of £1m and nine being more than £2m. Duncan Moir, partner and auctioneer comments: “We were delighted to secure many significant results for our clients and the strong prices achieved are a good reflection of the current demand for commercial and mixed-use property. There was a notable increase in the number of new buyers since our March auction, many of whom were motivated by the more favourable Stamp Duty Land Tax rates, when compared with the buy-to-let sector, and the wide range of properties and returns available. Concerns surrounding the outcome of the imminent European referendum would appear to be having little effect.”

Young’s reports 5.3% increase in managed like-for-likes since year-end: London pub retailer Young’s has reported a 5.3% increase in like-for-likes and up 8.1% in total in its managed estate in the first seven weeks since the year-end. For the year ending 28 March 2016 managed like-for-likes increased 5.6%. Sales rose 8.3% to £245.9m and adjusted operating profit was up 9.6% to £41.0m. Total sales in managed houses were up 8.7% and up 5.6% like-for-like, third consecutive year of like-for-like growth in excess of 5%; adjusted operating profit up 6.4% to £53.3m. Profit before tax was down 7.8% to £33.3m. There was further growth in hotels with accommodation sales up 11.6% at £10.4m. The Ram Pub Company (its tenanted business) saw revenues up 1.6% and up 1.0% like-for-like; operating profit up 4.7% to £4.5m reflecting improved operating efficiency. There was investment of £45.1m, including eight new managed houses and upgrades to its existing estate and hotel developments. Patrick Dardis will succeed Stephen Goodyear as chief executive with effect from July, as previously announced with Goodyear remaining on the board as a non-executive director. Goodyear said: “This has been yet another excellent year for Young’s, with strong like-for-like revenue performance once again, converting into a double-digit increase in underlying profits, and record cash generation which has enabled a continued high level of investment in our estate. In turn, this has translated into healthy returns to shareholders with the proposed final dividend making nineteen unbroken years of dividend growth. Trading in the current year has started well and, in the months ahead, we will benefit from recent acquisitions including two since the year-end, and from summer events such as the Queen’s 90th birthday celebrations and the European football championships. We are well positioned at the premium end of the market, have the financial resources to invest in further growth, and are therefore well set for another successful year. After 13 years of doing so, this is the last time that I will be reporting on our results as chief executive. Young’s is a wonderful company, not least because of the energy and enthusiasm of our people throughout the business. No one exemplifies these qualities better than Patrick Dardis, who has been an integral part of our success in recent years. I have every confidence that we will continue to thrive under his leadership.” The company stated: “Our estate comprises 251 pubs, breaking through the 250 milestone for the first time. Of these, our managed division runs over two-thirds, 171 pubs (including 22 hotels), whilst 80 are run under our tenanted division, the Ram Pub Company. We have added eight new pubs this year, all within our managed house division. Our strong performance is the result of good execution of our strategy, recent investments in our existing estate and through carefully selected acquisitions, which complement and enhance our proposition. Over recent years we have delivered consistently robust growth from our existing estate. This is the result of effective operating disciplines, the dedication of our teams across the business and a number of transformative developments, including the expansion of our premium hotel offer. Over the past year we have invested £44.5m on acquisitions and in our existing estate. In the first half of the year we opened three pubs acquired in earlier years following refurbishments: the Bull and Gate (Kentish Town), the Nine Elms Tavern and the Trafalgar Arms (Tooting). Also, in the first half we acquired the Canonbury (Islington) and the Grocer (Spitalfields Market), whilst in the second half we opened the Guard House (Woolwich Arsenal) and the Leman Street Tavern (Aldgate), and in late February, we acquired the historic Old Brewery (Greenwich), set within the grounds of the Old Royal Naval College. This charming and characterful building features an extensive outdoor terrace and is in an excellent location; the perfect spot for a refreshing summer drink and a bite to eat. The majority of these pubs can be found in north or east London, areas we have targeted in order to increase our customer reach. We have continued to expand in the new financial year. We have purchased the Woolpack (Bermondsey) and exchanged contracts on the Blue Boar (Chipping Norton), our second Cotswolds pub.”

Intertain acquires new Coventry site, ‘The Establishment’: Walkabout operator Intertain has completed on a lease for a new venue in Coventry, “The Establishment Bar & Grill”. The bar, which is set in an historic building dating to the 1700s, housed Coventry’s main court house until the mid-1980s and features numerous restored original features, including the judge’s bench, the crown crest, viewing gallery, and dock. The original cells have been transformed into a unique dining area with a contemporary “gastro” feel. Intertain intends to continue to run the venue, which has a high focus on food and a reputation as one of the best places in Coventry to meet for cocktails, post-work drinks and sets from the best DJs, in its current format. John Leslie, chief executive of Intertain, said: “The Establishment is a fantastic venue, with a stunning outdoor area, located in the heart of Coventry. It has a strong reputation in the city for food, drink and great service. It is our intention to not only maintain that reputation but also expand the bar’s appeal, building its name for sport and brilliant party nights in the great city of Coventry.”

Restaurant Group hires Graham Clemett as non-executive director: The Restaurant Group has hired Graham Clemett as a non-executive director and chairman of the Audit Committee. He joins the Board on 1 June 2016. Clemett is an experienced finance director of listed businesses. He is currently the chief financial officer of Workspace Group PLC, a FTSE 250 Property Company and has held that role since 2007. He has previously held senior finance roles in Royal Bank of Scotland and Reuters Holdings and trained with KPMG. Debbie Hewitt, chairman, said: “I am pleased to welcome Graham to the company. As well as his strong technical credentials and his broad strategic insight, he brings a wealth of experience as a listed company director. I am sure that he will add considerable value to our board and we look forward to working with him.”