Birmingham-based pub group Mitchells & Butlers is continuing to improve its market share in increasingly toughtrading conditions after posting better- than- expected interim results.
The Fleet Street group, which operates more than 2,000 managed outlets, yesterday saw a seven per cent rise in its share price after reporting a 4.9 per cent rise in first-half profit.
The group sparked hopes for a recovery in the leisure sector with much stronger sales figures for the 28 weeks to April 9.
M&B, headed by chief executive Tim Clarke, said like-for-like sales also rose 5.1 per cent in the eight weeks to May 7.
The group, created in April 2003 when the old Six Continents empire was split up, said that pre-exceptional pretax profits for the 28 weeks to April 9 rose to £86 million, on sales ahead five per cent to £864 million.
Earnings per share - helped by M&B's share buy-back programme - rose 20.4 per cent to 11.2 pence, while the interim dividend goes up by 12.3 per cent to 3.2 pence a share.
The group, which bought back £52 million worth of stock in the first half of 2004-05, intends to complete the total £100 million buyback programme before September.
Mr Clarke said M&B was continuing to attract new customers.
"Things weren't looking quite so good in February and early March when the poor weather was holding back sales, but we introduced new menus and extended the range and quality of our drink offerings and trading picked-up.
"We had an excellent Easter and the momentum continued through April and into the May Day Bank Holiday weekend."
M& B's pub- restaurant division, which includes Vintage Inns, Harvester, Toby and All Bar One, saw same outlet like-for-like sales rise by 7.4 per cent in the first half, while operating profits rose by 17.8 per cent to £53 million.
In the pubs and bars division, like-for-like sales were 3.1 per cent ahead, but operating profits were down 2.3 per cent to £86 million as good performances from the branded pubs were offset by the unbranded local and high street outlets, hit by a lower mix of food sales and the more competitive trading conditions.
The results were still in stark contrast to those from Whitbread, whose Beefeater and Brewers Fayre chain recently reported a downturn in underlying sales.
"We're taking market share from our rivals and we'll continue to pursue our volume-led sales strategy," Mr Clarke added.
"We are making substantial market share gains. Our focus on operational performance is generating strong cashflow which we will continue to redeploy in the best interest of shareholders, through reinvestment for high returns, value creative acquisitions or return by way of dividend and share buy-back.
"The long-term repositioning of the business is increasingly orientating Mitchells & Butlers towards the highergrowth segments of the pub and pub-restaurant market."
