Mitchells & Butlers has completed the acquisition of Pesto Restaurants, an Italian tapas offer with a ten-strong estate.
The consideration for the business will be determined over two payments, and is partly contingent on its future performance, but will be no more than £15m.
As with M&B’s Ego acquisition, the group said it will help it diversify and premiumise its brand portfolio.
The news comes as the group reported strong trading with like-for-like sales growth of 7%, driven by strong performances across all brands and increases in spend per head.
M&B said with inflation easing, sales growth has remained robust and is now ahead of cost inflation, and every brand across the portfolio in like for like sales growth.
Total sales across the period were £1,396m reflecting 8.9% growth on HY 2023.
Operating profit of £164m was a marked recovery from last year (HY 2023 £99m).
M&B said it has continued to consistently outperform the market, as represented by the CGA Business tracker, by over 2% like-for-like sales over the first half.
Over the most recent four weeks, following Easter in both this year and last, like-for-like sales have grown by 5.3%.
Like-for-like sales in the first half comprised an increase in like-for-like food sales of 7.7% and of like-for-like drink sales of 6.0%, driven by strengthening spend per head.
Volumes of food and drink were in marginal decline across the first half following a weaker period after the festive season.
Cost headwinds are anticipated to total c.£55m this financial year, slightly less than previously expected, with increases in labour costs due to the statutory National Living Wage rise mitigated by deflation in energy costs and slowing food cost inflation.
Full year results are expected to be at the “top end” of consensus expectations, with momentum for further progress going forward into FY 2025.
The company said strong and resilient sales growth through the first half, combined with a clear abatement in overall cost inflation, has driven a marked increase in both profitability and margins.
At the end of the period, the total estate comprised 1,716 sites in the UK and Germany of which 1,659 are directly managed.
Phil Urban, chief executive, commented: “Continued like-for-like sales outperformance against the market coupled with easing inflationary costs and focus on efficiencies has resulted in very strong profit recovery for the period.
“We remain focused on our Ignite programme of initiatives and our successful capital investment programme, driving further cost efficiencies and increased sales. We have confidence that continued focus on effective delivery of our strategic priorities will generate further value from our enviable estate portfolio and customer offers, enabling us to build further momentum throughout the year, with a strong foundation for long term outperformance.”
