Insider Media Limited

The West Midlands pub industry showed few signs of improvement this morning (22 November 2011) as two of the major players, Mitchells & Butlers and Enterprise Inns, reported their year-end results. Solihull-based Enterprise posted lower sales and a total pre-tax loss of £14m. The company said the value of its estate fell £173m over the year.

Total revenue at Birmingham's Mitchells & Butlers fell more than 9 per cent, from £1.9bn in its full-year 2010 accounts to £1.79bn this year.

However, pre-tax profits for the year to 24 September stood at £132m, compared with a £127m loss last year.

For the year ending 24 September, group operating profit slipped 8.7 per cent to £294m. After exceptional items were discounted, the pubco said total revenue was up 4.9 per cent which included a boost from food sales - up 7.8 per cent on last year.

Industry-wide cost rises were partly blamed for the sliding sales and profits. Issues such as increases in energy, alcohol duty, National Minimum Wage and business rates costs were noted by the Birmingham company.

Exceptional items over the year included pension scheme costs, a £4m loss on the disposal of properties and a £2m charge relating to the valuation of the property portfolio and impairment review.

Mitchells & Butlers said it spent £8m on infrastructure projects in addition to £82m on maintaining and enhancing its pubs.

Bob Ivell, executive chairman, described the results as "resilient" after a year which involved numerous board changes and a takeover approach.

He added: "Mitchells & Butlers is a good business and our ambition is to make it a great business. We have a number of initiatives in place to do this including the simplification of our central support functions to enhance business performance. Overall, this gives us confidence in successfully growing the business in the year ahead."

At Enterprise Inns, the company managed to recover its total loses of £31m in 2010 by more than half – but still posted a £14m deficit for the year ending 30 September. Exceptional items were listed as costing the company £171m during the period.

The value of the estate has fallen by £173m over the year to £4.6bn, said Enterprise. Of this write-down, £117m has been charged to the income statement as an exceptional item, which accounts for the large sum incurred in the year-end statement.

Revenues fell from £758m in 2010 to £711m at its latest year-end. Cash generation from disposals helped reduced net debt at the company by £302m to £3bn.

Chief executive Ted Tuppen said: "Whilst trading conditions are likely to remain challenging, we expect that the quality of our pub estate and the resilience of our publicans will ensure that the like-for-like performance in the substantive estate continues to improve.

"As we return the business towards growth, we remain committed to our initiatives and our strategy and confident that in the medium term we will be in a good position to deliver positive returns to shareholders."