Mitchells & Butlers plc (MAB) Earnings Call Transcript & Summary

Good morning, ladies and gentlemen. It's now 9:00 a.m., and I'd like to welcome you to this Annual General Meeting, which, for the first time, we are pleased to be holding a hybrid meeting with shareholders being able to participate remotely using the Lumi platform. Before we start, a reminder particularly for you, Greg, if you're attending in person and carrying your mobile phone, can you please make sure it's switched off. And also in the event of an emergency evacuation, please follow the directions of the stewards here on the duty on the fire doors. Just to introduce the Board. So we've got Phil Urban, our Chief Executive; Tim Jones, our Financial Officer; and Jane Moriarty, who's a non-Executive Director for the company. And then remotely, we have Josh Levy, who is a Non-Executive Director; Susan Murray, who's a Non-Executive Director; Dave Coplin, an Independent Non-Executive Director; Keith Browne, Non-Executive Director; and Eddie Irwin, Non-Executive Director. And they hopefully are on the screen. Good morning, everybody. Ladies and gentlemen, before asking you to vote on the resolutions, I should be pleased to answer any questions from members that are related to the company's affairs in general and to the specific business of this Annual General Meeting as set out in the notice. If you intend to ask a question based on the 2021 annual report, it'd be helpful if you could give us a page reference. I will ask if there are any questions from shareholders attending in person first and then ask if there are any questions from shareholders attending remotely. I can confirm that any questions, which were submitted in advance of the meeting, have been replied to and answered already. A copy of the questions and answers will be available on the website. If you have any issues that relate to a particular pub or restaurant but which is not an issue for the affairs of the company as a whole or for the business of this meeting as a whole, you should raise it outside the meeting. Should you wish to ask a question for those attending in person, please raise your white card when called. Please wait for someone to give you a microphone and then speak and give your name and state whether you're a shareholder or a proxy. For those attending remotely [Operator Instructions]

So starting with the audience we have today. We're a bit sparse compared with what we normally are. But -- so any questions? Come on. No?

[ Philip Accord ], ordinary shareholder. The situation with dividends, I haven't seen any information. But can you give me any idea at all, whether we're likely to get a dividend in the near future?

Well, I mean, I think we pretty plainly stated I think in all our documentation that our main focus really is to pay down our debt and invest in the business. And therefore, until we've got further down the line on our strategy on that, we have no intention of paying dividends. So I think we have stated there. I mean, Tim, did you...

Yes. I mean, in the very near term, 18 months, we can't pay dividends because we had to commit not to our banks and our bondholders part of the refinancing package that you're aware of. So best case, we're talking 2 years out. Let's see how our recovery goes as COVID in 2 years' time. But our priorities remain the same, which is meeting our fixed outgoings, pensions of its doses there and debt service and investing in the estate. And we would only pay a dividend from consistent surplus cash over and above that and not having investment needs for it. So definitely not in the very near term. In the medium term, I mean, we'll have the same criteria we've always had.

And I haven't obviously seen an information, but how is the debt going as such? Is it reducing dramatically? Or is it small amounts year-by-year?

It's reducing. I mean, not dramatically because we've had quite a hiatus in the last couple of years, but our debt is actually lower now than when we went into COVID. Now part of that, of course, is we've raised GBP 350 million of equity. It would be about GBP 50 million higher without that. But we -- I can say to you now, we have a stronger balance sheet than we had at the beginning of 2020, which is quite something if you consider what we've had to deal with in the last 2 years. And we're back on the track of reducing our debt.

Was that due to the uptake in the issue of shares?

So for us to purchase shares because I know that the takeout was pretty high, I would imagine.

The take-up is in the high 90s. Even those that weren't taken up, we still got the cash flow because other shareholders sort of plug those gaps, if you like. So we raised GBP 351 million as a result to that.

[ Roger Brown ], private shareholder. A couple of points on a similar note to the gentleman just spoke. Are you considering a rights issue in the near future for extending these shares? And also, I know we're living in rather uncertain times, but you've got quite a spread of companies that fall under the Mitchells & Butlers umbrella, if I could put it that way. Are you perhaps considering shelving off or selling off any parts -- any of those companies that you might consider are not doing as well as expected?

Well, I mean, I think the sort of simple answer is no to both of those questions, to be honest. We have no intention of certainly selling pubs. I mean, we constantly review our estate. And if marketplaces changed and the demographics change, then -- and the pub is no longer appropriate. Then the odd ones get sold. But I think as Tim said, we're continuing to look to invest in our estate. And I think pre-COVID, I mean, a lot of our success was actually investing in our state, which -- and got it into a much better cycle than it had and also moving our offers. So I mean, our Miller & Carter is a good example of where we've gone premium. And we've had phenomenal success with that, and we're constantly looking at what of our brands need to be changed or evolved. But no, so we're not. And rights issue, no. I mean, Tim says, we've obviously strengthened our balance sheet through the GBP 351 million we raised earlier last year. So we -- it's not something we would need to do or even think that.

If I could just...

Yes, do you want to...

Yes, if I could just add to the selling offer. Absolutely, no. I think you have to separate a state review from COVID. It's the wrong time to make those sort of decisions. I think one of the strengths of M&B is we have a broad portfolio in different markets, in different locations. Fair to say that as we've come out of lockdowns, it's been the premium restaurant. Food brands have done better than wet-led, but I still remain convinced that having the spread of offers in suburbia, in city, wet-led, dry means that actually, over time, we have sort of steady progress. So we'll -- there's certainly no plans whatsoever to dispose of parts of the estate, but we will, down the line, do another estate review and have a look as we always do. But I think our brands are all in good shape, all evolving and should serve us well as we come out of lockdown -- come out of COVID.

Okay. No question -- any more questions from the floor? No. Okay. We'll move on to online. So operator, do we have any questions online? No. Okay. That's short and sweet. Okay. This is quite unique for us. We're normally here with about 50 hands up and whatever. So anyway, that's what COVID does for you, isn't it? Okay. Ladies and gentlemen, there being no more questions, I will now move on to the formal part of the agenda. As in former years, the formal business today will be decided by way of a poll. The Notice of Annual General Meeting dated 23rd of December 2021 and the annual report were posted on the website and sent to those shareholders who had requested a hard copy. The Notice of Annual General Meeting set out in the resolution for today, meetings and the reasons why they are being proposed. As this is clearly all set out in the notice, I do not propose to repeat the information. I will instead propose to take the notice as read. As I mentioned earlier in the meeting, all the resolutions will be decided by poll. I now propose formally that each of the resolution set out in the notice of meeting is put to the meeting, and I declare the poll open. For those attending in person, please now complete the poll card to cast your votes on each resolution and sign and date the card. And as you leave the room, place it in one of the ballot boxes at the doorway to the hall immediately after the meeting. For those shareholders or proxies attending remotely, you are able to vote by selecting the voting option displayed that corresponds with how you wish to vote. The poll will close in 10 minutes, and after the close of this meeting and any cards not handed in by then or votes selected online will not be included in the final vote. The company's registrars will act as scrutineers, and the final results of the voting will be announced to the London Stock Exchange and posted on the company's website as soon as possible. Ladies and gentlemen, that concludes the business of the Annual General Meeting, and I'd like to thank you or you three for coming and everybody online, of course. Thank you very much. Short but sweet.