Conclusion

Mtichells and Butlers have certainly seen a better financial year of 2011 compared to that of

2010 and this is clearly represented by the analysis of the financial ratios.

In all the key aspects, the firm has done better. The firm had a higher gearing ratio in 2010, with

 a very weak Acid ratio of 0.62, which posed great risks for the firm, but this year the firms

liquidity issues have been sorted and the acid ratio is around the ideal figure of 1 and the firm

 has reduced financial leverage. The ROCE has marginally improved and that is in part due to

 the increase of the gross profit margin of M and B. However if the firm wants to continue

developing and deliver even stronger financial results, it will have to strive to improve the

profitability figures. This can be done due to increased production efficiencies. All in all, the

year of 2011 was one of success which would have certainly raised the market's expectations

of the firm, thereby resulting in a rise in stock price of M and B.

Brands people love (2011) Annual report [Online]. Available at: http://www.mbplc.com/investors/annualreport/ (Accessed: 20 May 2012).

                                           Mitchells and Butlers Ratio Analysis 2010 & 2011

Acid Test Ratio:

                                2010                                                                                                                       2011

                                349 – 25                                                                                                                451 – 25

                                525  = 0.62:1                                                                                                       408 = 1.04:1

The ratio has improved from 2010 to 2011. The ideal for this liquidity ratio is 1:1.

Gross Profit Margin

                                449                                                                                                                         404

                                1980 x 100 = 22.68%                                                                        1796 x 100 = 22.49%

The gross profit margin figure has decreased from 2010. It tells us something about the businesses ability to consistently control its production costs or manage the margins on products it buys and sells.

ROCE

                                (127)                                                                                                                      132

                                4077 x 100 = (3.12%)                                                                                       4008 x 100 = 3.29%

The primary ratio has improved for 2011. This ratio tells us what returns management has made on the resources made available to them before making any distribution of those returns.

Gearing

                                3392                                                                                                                       2916

                                997 = 3.40                                                                                                            1092 = 2.67

This ratio measures the proportion of assets invested in a business that are financed by borrowing.

Operating Profit Margin

                                33                                                                                                                           275

                                1980 x 100 = 1.67%                                                                           1796 x 100 = 15.31%

The operating profit margin tells us something about a company’s ability to control its other operating costs or overheads.

Trade Debtor Days

                                40                                                                                                                           70

                                1980 x 365 = 7.37 days                                                                1796 x 365 = 14.23 days

Gives an idea of how long it takes for debtors to be recovered and whether or not debtors are being allowed excessive credit.

 

Mitchells & Butlers PEST Analysis

According to Mind Tools (2012) a “PEST Analysis is a simple but important and widely-used 

tool that helps you understand the big picture of the Political, Economic, Socio-Cultural and 

Technological environment you are operating in. PEST is used by business leaders worldwide

to build their vision of the future”. The PEST analysis of Mitchell and Butlers is as follows:

Political:

    Smoking Ban law introduced in 2007. A political factor for MAB, as it is very important

 as it affects all the pubs and restaurants and can be a deterrent for smoking customers

 because they cannot smoke inside of their premises anymore (UKessays, 2012).

Economic:

With the recession there is a risk of unemployment in the UK and all over the world 

which is affecting companies; as a result they try to cut costs by lowering the number of 

staff.

Taxes increased in January 2010 which will cause consumer spending to slow down.

Inflation increases.  The rise of inflation makes it harder for people to borrow from the banks.

Social:

Social Responsibility - As the leading operator of managed pubs and pub restaurants 

in the UK, Mitchells and Butlers has a commitment to give the responsible retailing of 

alcohol. Mitchells and Butlers established a policy for retailing alcohol in a responsible 

manner. This ensures that all of their licensed premises are operated responsibly.

Under-age Drinking - Mitchells and Butlers launched the “Challenge 21” which means 

every time a under-age person comes in any premises in the UK they will be asking for 

proof of identity. This will prevent the sales of alcohol under-age persons.              

Minimum Wage - The National Minimum wage was introduced 10 years ago and has 

increased 5.5% per year. Mitchells and Butlers must comply with the minimum pay levels for

each age group to comply with the law.

Health and Safety at Work act 1974 - The Act is the primary piece of legislation 

covering occupational health and safety in the United Kingdom. (hse.gov.uk, 2009) 

Mitchells and Butlers must ensure that they enforce the health and safety of both their 

workforce and their customers.

Environmental

Weather - Due to the varying weather conditions throughout the whole year, Mitchells 

and Butlers should be constantly aware of the effects good and bad weather can have on 

their outlets.

Recycling - Due to raised awareness of pollution in the environment and the effects of 

waste Mitchells and Butlers have to show their commitment in creating as little waste as 

possible, and where possible recycle as much of their waste. They also have a commitment 

to reducing their carbon footprint.

Bibliography

Mind Tools (2012). Understanding "Big Picture" Forces of ChangeAlso PESTLE, PESTEL, PESTLIED, STEEPLE & SLEPT. Available at:http://www.mindtools.com/pages/article/newTMC_09.htm (Accessed: 28 May 2012).

UKessay (2012). Highlighting mitchells and butlers strategic. Available at:http://www.ukessays.com/essays/data-analysis/highlighting-mitchells-and-butlers-strategic.php (Accessed:28 May 2012).

 Heatley, C.(2012). Mitchells & Butlers Has Two CEO Candidates, Chairman Says. Availible at : http://www.bloomberg.com/news/2012-05-18/mitchells-butlers-has-two-ceo-candidates-chairman-says-1-.html#disqus_thread (Accessed: 28 May 2012). 

Share Price Information for Mitchells & Butlers (MAB)

Share Price: 266.00	Bid: 266.00	Ask: 266.10	Change: 0.00 (+0.30%)
Spread: 0.10 Spread as %: 0.04% Open: 265.10 High: 267.70 Low: 263.30 Yesterday’s Close: 266.00

 

 

Share Price Information for Mitchells & Butlers (MAB)

Share Price: 276.60	Bid: 276.30	Ask: 276.90	Change: -3.00 (-1.07%)
Spread: 0.60 Spread as %: 0.22% Open: 278.30 High: 278.83 Low: 273.50 Yesterday’s Close: 279.60      http://www.lse.co.uk/SharePrice.asp?shareprice=MAB

FTSE 100 Index

FTSE 100 Index UKX:IND 5,885.79 GBP 1.70 0.03% As of 05:16:26 ET on 12/03/2012. http://www.bloomberg.com/quote/UKX:IND

Share Charts for Mitchells & Butlers (MAB)

Share Price: 262.80	Bid: 262.70	Ask: 263.30	Change: -5.10 (-1.90%)
Spread: 0.60 Spread as %: 0.23% Open: 266.90 High: 267.00 Low: 261.10 Yesterday’s Close: 267.90 http://www.lse.co.uk/SharePrice.asp?shareprice=MAB

3 Month Mitchells & Butlers Share Graph

http://www.lse.co.uk/SharePrice.asp?shareprice=MAB

Share Price Information for Mitchells & Butlers (MAB) From 20/02/2012

Share Price: 276.80	Bid: 276.60	Ask: 276.90	Change: 3.20 (+1.17%)
Spread: 0.30 Spread as %: 0.11% Open: 272.80 High: 277.00 Low: 272.50 Yesterday’s Close: 273.60 http://www.lse.co.uk/SharePrice.asp?shareprice=MAB These below are some of the factors of M&B. http://www.ft.com/cms/s/0/60fdcfda-5ca8-11e1-ac80-00144feabdc0.html#axzz1sQTgZJ6V M&B figure it out, the three candidates to be chief executive after the job was rejecting by three high-profile industry executives amid concerns at the influence the results by the pub group’s dominant shareholder, Joe Lewis.  In addition M&B denied it had ever approached Mr Emeny and Mr Tye to be chief executive. Both men declined to comment.Mr Ivell mentioned that he was going to find a new chief executive, after he was appointed in October 2012. Interestingly, Simon Emeny who is managing director of Fuller Smith & Turner, and Mike Tye, chief executive of Spirit Pub Co, both rejected informal approaches by M&B potentially to became chief executive.   Also a third candidate, Steve Richards, who is a chief executive operator, that runs Novus, which is a private bar and club, also turned down an approach, according to a person familiar with the situation.  M&B owns All Bar One and Carvey Toby, was fighting to find a permanent chief executive, after the living of Adam Fowle in March 2011. After that the company went through more than 30 changing in the last 3 years, and  the uncertainty helped contribute to a 23% share price dropped in 2011.However, since January shares have risen about 15%, in part because of stronger Christmas sales. M&B shares closed down 2.3% at 270.2p on 21/02/2012.

The closing price at MAB this week

Share Price Information for Mitchells & Butlers (MAB)

Share Price: 273.60	Bid: 273.60	Ask: 273.70	Change: 0.00 (+0.18%)
Spread: 0.10 Spread as %: 0.04% Open: 273.90 High: 275.20 Low: 272.30 Yesterday’s Close: 273.60 http://www.lse.co.uk/SharePrice.asp?shareprice=MAB

 The closing Price at MAB this week

Share Price Information for Mitchells & Butlers (MAB)

Share Price: 275.00	Bid: 275.50	Ask: 276.90	Change: 1.90 (+0.70%)
Spread: 1.40 Spread as %: 0.51% Open: 273.90 High: 275.00 Low: 273.00 Yesterday’s Close: 273.10 http://www.lse.co.uk/SharePrice.asp?shareprice=MAB

Weekly Share Price of M&B

 Share Price Information for Mitchells & Butlers (MAB) week 6 12/02/12

Share Price: 270.60	Bid: 270.60	Ask: 270.80	Change: 0.00 (-1.38%)
Spread: 0.20 Spread as %: 0.07% Open: 273.40 High: 276.30 Low: 269.22 Yesterday’s Close: 270.60

Last 3 months

According to the chart above in the last 9 weeks up to 21st  January 2012 the share of MAB were up 6.5%  assisted the improved weather over this year's Christamas period.

 http://www.lse.co.uk/SharePrice.asp?shareprice=MAB&share=MITCHELLS_&%20BUT

 

The figures in December were successful because of the Christmas sales. Also the weather helped, and encouraged the customers dining at MAB more often during the day. MAB thought that would be a good idea to re-focus the operations and improve the guest experience as it is highly demanded in these days. As result this will help to gain more ability to achieve successfully, develop and grow the business in the year ahead. 

http://www.lse.co.uk/SharePrice.asp?shareprice=MAB

Mitchells & Butlers

The company I have chosen is Mitchells & Butlers. http://www.mbplc.com/

Mitchells & Butlers is the  leading restaurant and pub company in the UK. It started in 1898 and has now become a highly successful company with over 1,600 businesses trading under 13 key brands. The 13 brands include: Sizzling Pubs, Vintage Inn's, Harvester, Ember, Toby Carvery, Crown Carveries, Metro Professionals, Nicholson's, Premium Country Dining Group, O'Neill's, Alex and All Bar One. On average each businesses revenue is over £21,000/week making an operating profit of £180,000/year. M&B is currently worth £70 billion and employs around 40,000 members of staff.

M&B's success is due to their business strategy and vision. Their vision is "To be the first choice for anyone looking to go out for a relaxed, casual meal or drink, whatever the occasion." Their strategy is to ensure customers keep returning and to keep their brands fresh and to maintain and build on their reputation for quality, choice, service and value. 

They continue to use the strength of their brands to expand their business and develop more sites. This results in more customers and an increase in their purchasing and marketing thus increasing the companies return on investment. 

M&B has positioned itself in the marketplace to take advantage of the increased demand for eating out in the UK. They have become a food-led business opening new sites where there is a high demand for eating out. Food is now M&B's largest selling product growing 30% over the last four years. Nearly three quarters of their sales to customers using their business for eating purposes. 

Mitchells & Butlers Pub