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1. Company Snapshot

1.a. Company Description

Mitchells & Butlers plc manages pubs, bars, and restaurants in the United Kingdom and Germany.The company operates its pubs and restaurants under the Alex, All Bar One, Browns, Castle, Ember Inns, Harvester, Innkeeper's Lodge, Miller & Carter, Nicholson's, O'Neill's, Premium Country Pubs, Sizzling Pubs, Stonehouse Pizza & Carvery, Toby Carvery, and Vintage Inns brands and formats.It also engages in the leisure retailing; property leasing, property management, and development; and financing activities, as well as operates as a healthcare trustee.


In addition, the company owns various trademarks.As of September 25, 2021, it operated 1,732 pubs, bars, and restaurants.Mitchells & Butlers plc was founded in 1898 and is headquartered in Birmingham, the United Kingdom.


Mitchells & Butlers plc operates as a subsidiary of Odyzean Limited.

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1.b. Last Insights on MAB

Mitchells & Butlers plc's recent performance has been bolstered by a robust earnings release, with the company reporting a 12.2% increase in like-for-like sales. The group's pubs and restaurants have seen a resurgence in demand, driven by a combination of factors, including a strong festive season and improved trading conditions. Furthermore, the company's share buyback program has been a significant positive, reducing the number of outstanding shares and enhancing earnings per share. Additionally, a recent analyst report has estimated the fair value of the company at £2.34, indicating a potential upside for investors.

1.c. Company Highlights

2. Transcript Summary

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3. NewsRoom

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Surging steak prices deliver cost hit for Toby Carvery owner

Nov -28

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All Bar One owner cautions over £130m cost hit as wage and food bills soar

Nov -28

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Is There Now An Opportunity In Mitchells & Butlers plc (LON:MAB)?

Nov -19

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Schwimmer urges Reeves to unleash £100bn UK stock market boom

Nov -06

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NACFB appoints Ultimate Finance CEO as non-executive patron director

Aug -13

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Returns At Mitchells & Butlers (LON:MAB) Appear To Be Weighed Down

Aug -05

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Toby Carvery owner says sales to hit ‘top end’ of guidance amid hot weather

Jul -25

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At UK£2.85, Is Mitchells & Butlers plc (LON:MAB) Worth Looking At Closely?

Jun -12

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4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (4.38%)

6. Segments

Food

Expected Growth: 4.5%

Mitchells & Butlers plc's 4.5% growth in Food segment is driven by increasing demand for premium casual dining, successful menu innovation, and effective marketing campaigns. Additionally, strategic investments in digital platforms and loyalty programs have enhanced customer experience, leading to increased sales and market share gains.

Drink

Expected Growth: 4.2%

Mitchells & Butlers plc's 4.2% growth is driven by increasing demand for premium drinks, successful brand revamps, and strategic pricing. Additionally, the company's focus on digital transformation, including mobile ordering and loyalty programs, has enhanced customer experience and driven sales. Furthermore, the expansion of its estate and refurbishment programs have also contributed to the growth.

Services

Expected Growth: 4.8%

Mitchells & Butlers plc's 4.8% growth in services is driven by increasing demand for experiential dining, successful brand revamps, and strategic site refurbishments. Additionally, the company's focus on digital transformation, including mobile ordering and online booking systems, has enhanced customer experience and driven sales. Effective cost management and a strong brand portfolio have also contributed to this growth.

Rent Receivable from Unlicensed Properties and Leased Operations

Expected Growth: 4.0%

Mitchells & Butlers plc's 4.0% growth in Rent Receivable from Unlicensed Properties and Leased Operations is driven by strategic portfolio optimization, increasing demand for pubs and restaurants, and effective cost management. Additionally, the company's focus on experiential dining and premium offerings has contributed to higher revenue generation.

Other - Apprenticeship Incentives

Expected Growth: 3.8%

Mitchells & Butlers plc's 3.8% growth in Apprenticeship Incentives is driven by increased government funding for vocational training, rising demand for skilled workers in the hospitality industry, and the company's strategic investments in employee development programs, enhancing its appeal to attract and retain top talent.

7. Detailed Products

All Bar One

A stylish and sophisticated bar chain offering a wide range of drinks and food in a vibrant atmosphere.

Browns

A classic British pub chain serving traditional food and drinks in a warm and welcoming environment.

Castle

A community-focused pub chain offering a range of drinks and traditional pub food in a friendly atmosphere.

Harvester

A family-friendly restaurant chain serving farm-to-table food and unlimited salad bar in a warm and welcoming environment.

Miller & Carter

A premium steakhouse chain offering high-quality steaks and fine wines in an upscale atmosphere.

Nicola

A Italian-inspired restaurant chain serving traditional Italian dishes and fine wines in a cozy atmosphere.

O'Neill's

A lively Irish-themed pub chain offering a range of drinks and traditional pub food in a vibrant atmosphere.

Premium Country Pubs

A collection of premium pubs offering high-quality food and drinks in a sophisticated atmosphere.

Sizzling Pubs

A pub chain offering a range of drinks and traditional pub food at affordable prices in a lively atmosphere.

Toby Carvery

A carvery-style restaurant chain serving a wide range of meats and vegetables in a warm and welcoming environment.

8. Mitchells & Butlers plc's Porter Forces

Forces Ranking

Threat Of Substitutes

Mitchells & Butlers plc operates in the pub and restaurant industry, where substitutes are limited. However, there is a growing trend towards at-home dining and online food delivery, which could pose a threat to the company's sales.

Bargaining Power Of Customers

Mitchells & Butlers plc operates in a competitive industry, but customers have limited bargaining power due to the company's strong brand portfolio and wide range of offerings.

Bargaining Power Of Suppliers

Mitchells & Butlers plc relies on a network of suppliers for food, beverages, and other inputs. While suppliers have some bargaining power, the company's scale and purchasing power mitigate this risk.

Threat Of New Entrants

The pub and restaurant industry has high barriers to entry, including significant capital requirements and regulatory hurdles. This limits the threat of new entrants to Mitchells & Butlers plc.

Intensity Of Rivalry

The pub and restaurant industry is highly competitive, with many established players competing for market share. Mitchells & Butlers plc must continually innovate and invest in its offerings to maintain its market position.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 39.02%
Debt Cost 11.66%
Equity Weight 60.98%
Equity Cost 11.66%
WACC 11.66%
Leverage 63.99%

11. Quality Control: Mitchells & Butlers plc passed 1 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Stock-Card
Brinker

A-Score: 5.3/10

Value: 5.8

Growth: 8.0

Quality: 5.4

Yield: 0.0

Momentum: 8.5

Volatility: 4.3

1-Year Total Return ->

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Stock-Card
Moncler

A-Score: 5.2/10

Value: 3.2

Growth: 7.4

Quality: 8.1

Yield: 3.8

Momentum: 3.5

Volatility: 5.0

1-Year Total Return ->

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Stock-Card
Renault

A-Score: 4.7/10

Value: 9.5

Growth: 5.0

Quality: 2.3

Yield: 4.4

Momentum: 3.0

Volatility: 4.0

1-Year Total Return ->

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Stock-Card
Mitchells & Butlers

A-Score: 4.5/10

Value: 8.5

Growth: 5.1

Quality: 3.8

Yield: 0.0

Momentum: 3.0

Volatility: 6.3

1-Year Total Return ->

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Stock-Card
Marks and Spencer

A-Score: 4.3/10

Value: 5.8

Growth: 4.1

Quality: 4.9

Yield: 0.6

Momentum: 4.0

Volatility: 6.3

1-Year Total Return ->

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Stock-Card
Dometic

A-Score: 3.9/10

Value: 7.8

Growth: 3.9

Quality: 2.0

Yield: 5.0

Momentum: 2.5

Volatility: 2.0

1-Year Total Return ->

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

2.64$

Current Price

2.64$

Potential

-0.00%

Expected Cash-Flows