Mitchells & Butlers scraps dividend

26-11-2008

Mitchells & Butlers scraps dividend
Pub operator Mitchells & Butlers has scrapped its year-end dividend and has suspended future investor payouts until it can reduce its £2.7 billion debt.

The group said it would resume paying dividends once a "comfortable level of headroom" has been reached, which M&B predicts will be in 2010.

Profit for the year fell 13.5 per cent to £179 million, while like-for-like sales grew slightly, by one per cent.

M&B, which owns the Harvester and O'Neill's chains, also said it is abandoning plans to convert to REIT status, a way of saving tax, after the government changed the rules.

The group said it is "highly cautious" on the outlook for consumer spending in 2009 as the UK economy slides into recession.

"As a result, we expect continued significant declines in on-trade beer volumes and a contraction in the eating-out market in line with decreases in disposable incomes," M&B said.

However, the pub operator said it will remain resilient in the face of challenging conditions by keeping prices competitive.

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