All Bar One owner Mitchells & Butlers posted a fall in full-year profits today but impressed the City with a fast start to its new financial year.
The UK's biggest managed pubs group said its pre-tax profits fell 13.4% to £123 million in the year to September 27 as like-for like sales edged up 0.6% and total revenues rose 4% to £2 billion.
The business, which runs around 1,650 pubs and restaurants, said customer spending was starting to improve as the UK economy recovers.
However it also warned: "The careful spending behaviour developed during the recession is now the norm."
It said its range of offers - from £3.99 Toby Carvery unlimited breakfasts to its All Bar One menu aimed at professionals - targeted a wide cross-section of the growing £78 billion eating and drinking out market.
It added that like-for-like food sales rose to 0.9% in the period against a decline of 4.3% a year ago, while total like-for-like sales for the first eight weeks of the year jumped to 2.4%. Shares rose more than 5%.
The group bought 173 outlets for £266 million from rival Orchid Group in June and will convert the majority of them to its own brands, which also include Harvester and Toby Carvery.
It said that capital spending in the year rose 26.7% to £162 million, and included the opening of 23 new sites and eight conversions.
Chief executive Alistair Darby said: "In the last year we have made significant progress, investing in the business for future growth."
Peel Hunt analyst Nick Bartram said: "The underlying performance of the business in 2014 was in line with expectations and the current year has got off to a good start - albeit against a weak comparative."
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