Mitchells & Butlers has seen a jump in like-for-like sales of 1.8% for the first half of 2010, boosted by strong food sales.
The company said that like-for-like food sales were up 4.3% over the period, whereas drink sales rose just 0.3%. M&B said that the second quarter was hit by the January VAT increase, bad weather, and lower promotion activity. But like-for-like sales in the most recent nine-week period were up 1.9%.
Revenue was also up by around 1.3% to just over £1b, while pre-tax profit shot up 55.3% to £73m for the period.
The company also managed to reduce its net debt pile to £2.5b after paying down £87m over the past six months. And it signalled that it would deliver cost savings of £25m over the year - £5m more than previously expected.
The strong food sales appear to vindicate a decision by the business to concentrate on the eating-out market, as it looks to expand the food-led brands in its 2,000-strong pub estate.
The company said that it wants to increase the number of its pubs with a strong food brand to 1,900, with active expansion planned for:
Crown Carveries (111 pubs)
Harvester (170 pubs)
Premium Country Dining Group (63 pubs)
Sizzling Pub Co (198 pubs)
Toby Carvery (133 pubs)
Vintage Inns (222 pubs)
It is also planning what it termed ‘selective' expansion at All Bar One, Browns, Metro-Professionals, Miller & Cater, Nicholson's and O'Neill's.
M&B has based its plans on research which shows that food accounts for £42b of the £71b UK market for eating and drinking. The drink market is worth £29b but has not grown since 2004.
By Neil Gerrard
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