November 27, 2012 / 10:36 AM / in 5 years

UPDATE 1-Mitchells & Butlers gets off to muted start

* Like-for-like sales down 0.1 pct for first 8 weeks of 2013

* Shares fall as much as 5 pct

By Karen Rebelo

Nov 27 (Reuters) - British pubs and restaurants group Mitchells & Butlers Plc reported a rise in full-year profit but like-for-like sales in the first eight weeks of the new year were flat, sending its shares down as much as 5 percent.

The owner of All Bar One, Harvester and O’Neills chains said alcohol duty increases and food price inflation remained a concern for business in the new year.

“We clearly feel there will be continued pressure on food costs,” Non-executive Chairman Bob Ivell told Reuters.

“Food costs last year were particularly high, if you look at things like red meat, particularly in the first half.”

British pub and restaurant companies, which also face competition from supermarkets, have had a mixed year. Sales were hit by heavy rain in April and June but rebounded later as Britons celebrated the Queen’s Diamond Jubilee and London hosted the Olympics.

“Current trading looks mellow ... with MAB continuing to underperform its peers,” Shore Capital analyst Greg Johnson said in a research note.

Smaller rival JD Wetherspoon Plc reported a 7 percent increase in first-quarter like-for-like sales earlier this month.

Mitchells & Butlers’ adjusted profit before tax rose to 162 million pounds ($259.6 million) for the 52 weeks to Sept. 22 from 156 million pounds last year.

The company, which also owns the Toby Carvery and Browns chains, said like-for-like sales rose 2.1 percent, led by food.

“The more mid- to upper-market brands continued to do well,” Ivell said. “The value end of the market ... that is where it’s been tougher, because that is where a lot of people are throwing a lot of discounts.”

Shares in Mitchells & Butlers, which is majority owned by billionaire currency trader and Tottenham Hotspur owner Joe Lewis, were down 3.17 percent at 320 pence at 0925 GMT on the London Stock Exchange.

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