Overall ranking: 13 (new entry)
Pub and bar operator ranking: 3 (new entry)
Two years after Phil Urban stepped into the hot seat as chief executive at pub and restaurant operator Mitchells & Butlers (M&B), it's fair to say that the business remains in a state of transition. With more than 1,750 sites, M&B operates more than a dozen of the UK's best-known brands, including Harvester, Toby Carvery, All Bar One, Miller & Carter and O'Neill's, as well as the Innkeeper's Lodge hotel brand. In the 53 weeks to 30 September 2017, the group reported a dip in operating profits of £208m (2016: £231m) on turnover of £2,180m (2016: £2,086m). Like-for-like sales were up 1.8% on the preceding year.
What we think
On paper, M&B ought to be one of the best-performing businesses in the sector. As the inheritor of the much admired Bass-managed pub estate, it operates leading pub and restaurant brands trading in sought-after locations, with around 80% of its sites freehold. However, both the business and its share price have been widely seen in the City as underperforming, in part due to a long-running internal disagreement on strategy between the M&B board and major shareholder Joe Lewis.
Phil Urban joined M&B in January 2015, initially as chief operating officer, before taking on the chief executive role in September 2015. A qualified accountant, Urban had previously held managing director roles with Whitbread and Scottish & Newcastle Retail's pub-restaurants; prior to joining M&B he was MD of Grosvenor Casinos.
Over the past two years, Urban's priorities have been rebalancing the business and instilling a more commercial culture. In the past year, 13 new sites have been opened and 252 existing sites converted and remodelled. On the other side of the coin, 79 sites not seen as offering growth potential were sold - one reason given for the dip in profits in M&B's last full year was increased provision for underperforming short-lease sites in retail and leisure parks.
The brand mix continues to be refreshed. For example, the venerable value-for-money Crown Carveries format is being supplanted by Sizzling Pizza & Carvery, and the 173 former Orchid Group pubs, acquired in 2014, continue to be integrated into M&B's brands.
Urban has overseen M&B's return to sales growth and points outs that it consistently outperforms the market. However, he also says that the economic climate "presents us with an unprecedented level of challenge and uncertainty" as operators' costs increase and consumers remain cautious. With his focus being to keep the estate competitive and the balance sheet strong, he may yet earn M&B the respect it deserves.
You need to be a premium member to view this. Subscribe from just 99p per week.
Already subscribed? Log In