May 20 (Bloomberg) -- Mitchells & Butlers Plc said first-half profit dropped 29 percent as revenue declined and the company incurred one-off costs. Shares of the U.K. owner of Harvester and Toby Carvery pubs and restaurants fell.
Net income declined to 37 million pounds ($60 million), or 9 pence per share, for the 28 weeks ended April 9, from 52 million pounds, or 12.7 pence a share, a year earlier, the Birmingham, England-based company said in a statement today. Revenue decreased 8.8 percent to 946 million pounds.
Mitchell’s & Butlers shares fell as much as 26.6 pence, or 7.9 percent, to 309.8 pence, in London trading, marking the biggest intraday decline since May 2009. The shares traded down 6.7 percent at 314 pence as of 8:23 a.m.
The U.K. is coping with its worst recession since World War II amid rising inflation and unemployment concerns that have deterred consumers from spending. Cheap alcohol at supermarkets including Tesco Plc has also hurt pub profits and Mitchells & Butlers is promoting food to counter the trend.
“Our growth strategy is on track,” interim chief executive officer Jeremy Blood said in today’s statement. “We have successfully positioned Mitchells & Butlers more firmly within the eating-out market with nearly three quarters of our revenue now generated around eating out.”
The company nonetheless added that “notwithstanding the current robust trading, we believe that challenges lie ahead in respect of input cost inflation from food and energy.”
Exceptional items reduced profits before tax by 20 million pounds and included a 4 million pounds pension finance charge, a 13 million pound cost relating to a pension benefit scheme and a 3 million pound loss on property disposals, the company said.
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