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

Good morning, ladies and gentlemen. It's now 11:30 and I'd now like to welcome you to the Annual General Meeting. Hopefully, you've noticed there's 2 things that are different from last year. One is the time, at 11:30, hopefully made it easier for people to get here. And secondly, we haven't clashed with Marston. So hopefully, that's worked from what people were asking us here. Before we start, I remind you that if you got a mobile phone, can you make sure it's switched off? And also in the event of an emergency, or evacuation, please follow the directions of the stewards, who are on duty at the fire exits. I'd like to introduce myself and the Board. I'm Bob Ivell. Right on the far left is Josh Levy, who's a Non-Executive Director. Next to him is Eddie Irwin, Non-Executive Director; Jane Moriarty, Senior Independent Director; Phil Urban, our Chief Executive; and Tim Jones, our Finance Director. And then next to him is Amanda Brown, Independent Non-Exec Director; Dave Coplin, Independent Non-Exec Director and Keith Browne, Non-Executive Director. Before we move on to the resolutions, we thought we'd just show you an up-to-date video of all of our brands and some of the stuff that we've done in the last year. So we'll just play that and give you an opportunity to see how the business has moved forward. [Presentation]

So I hope that gives you what all our brands are and all our businesses, and I guess some of them, you have been to and some not. So moving on before asking you to vote on the resolutions, I can confirm that we've already replied to questions, which were submitted in advance of the meeting. And I should be pleased to answer any subsequent questions from shareholders today, that are related to the company's affairs in general and to the Pacific business of the Annual General Meeting as set out in the notice. 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 those outside of the meeting. If you intend to ask a question based on the 2024 annual report, it will be helpful, if you're able to give us a page reference. And if you want to ask a question, please raise your hand and wait for a person to hold the microphone in front of you speaking to, I mean, give your name and state whether you're a shareholder or proxy. So let's move to questions. Any questions?

Good morning. Thank you very much. Allow me to read these few points out first before I ask a question, if that's okay.

Yes, sure.

So my name is Leon. I'm representing ShareAction. Recently, members of the Good Work Coalition sent a letter to Mitchells & Butlers, on the topic of the ethnicity pay gap reporting. The Good Work Coalition is now engaged with 31 companies, including Wetherspoons on this topic, and M&B remained the only company, which has declined to meet share action and the investor group to discuss this further. In response to the Investor coalition letter, Craig Provet, Director of Conversation Benefits stated at M&B does not currently hold the data needed to calculate its ethnicity pay gap. The coalition would like to understand how much M & Butlers intends to meet these upcoming mandatory report requirements. My question to you today is, would the company reconsider its position and agree to meet share action, the Good Work Coalition and other interested investors to discuss this matter further.

Phil, do you want to just cover the response that we gave.

Yes. I mean we've -- you've been represented here in the last 2 years, and we've answered the question that actually -- we don't hold that data 100% accurately. We're in the process of upgrading our HR system, which will be happening over the next 18 months. And once we've done that, we will be in a position to do just to report as your -- you're asking for. So we've communicated that twice in person for a representative here. And having had your letter recently, we've simply said we've answered it. We've laid out what we're doing. And once we've done that, then we will be complying. So we don't actually see the need to meet, obviously we have nothing further to say than that, not simply the response.

Okay. Thank you. Other questions? Gentlemen here?

Just looking at the prospectus there, I'll say that Phil, you've been here 10 years this month, is it since you joined the company?

Is indeed, yes.

Lasted well, haven't you?

Is that a good thing.

And he doesn't look any older.

Probably not, actually.

Probably not a good thing.

2 questions. I'll give you the first question first. You've been with the company for 10 years as a Chief Executive Officer for 9 of those years. Can you tell me what were your 2 greatest achievements for shareholders during this period that you've held the office?

I think we popular power that would be to navigate the company through COVID, when in those few months of lockdown, we're staring some pretty nasty outcomes in the face to get the business shut down, reopened and trading again would be -- I would personally see that as an achievement. And the second one I would talk to, which I guess from -- I get what's behind your question is the frustration in terms of share price, which we hold too, but in those 9 years to have been ahead of the market for all those 9 years, week in and week out, I would say is another achievement, which the company certainly wasn't in that position when I arrived. First on the -- personally, actually, a leading a team of people, and if you want to be personal achievement, what I'm proud about is the team of people we have here at M&B, which I pay a part in, of course.

That wasn't the question I was expecting, but we'll go on. The second 1 is to...

Can I ask what you were expecting -- can I ask what you were expecting?

Well, I thought you were giving us a little bit more of your personality and what you've achieved, trying to project yourself across the shareholders. And I don't think you came across with that, but maybe I'm wrong on.

Okay.

The second question is some -- this will come to the Chairman, actually. Question is, what was the most interesting question asked by your Chairman to yourself during the period of your 9 years?

I'm sorry, a question to me of what.

Is to you asking what your most interesting question your Chairman has asked you in that period of time?

That's a good question. Of course, the most interesting.

He gets to ask a lot of questions. I suppose to say. Sorry, what was that -- Yes, -- I think, it might be.

Not after -- I mean, there have been many that have varied, but there are always challenges, and I think right at the start of this row, is what I would be doing different to what had gone before and how we were going to get the top line moving because as I -- when I became CEO, you may not remember, we were in sales decline and 4 percentage points behind the market. So what was I going to do to get the sales line back ahead of the market. As I say, we've been -- we did that fairly quickly, and I'm glad to say we've done to sustain that for 9 years. So that would be 1 that sticks in my mind from right at the start. There have been plenty around COVID. Question to you was...

What was I going to do differently -- and forget the business move...

What was chairman's question to you. That was the most interest during your 9 years?

The question was what was I going to do to get the sales of this business from a decline to growth -- and what was that going to do differently in order to do that, which is right to start and Ignite, which is something that we place a great store in is the product or that's what we did, and it's served us very well. And then probably, secondly, you asked for 2. The second 1 would have been around COVID and lockdown and how we were -- how we're going to get this organization that is shut down, reopen, shut down again. What we were going to do to get the business back and firing on all cylinders would probably be spring to mind.

So I'm not quite sure where this is going and what your point is.

I just wanted to hear him talk really and he was coming across?

Okay. Well, thank you very much.

I have a question for you later on.

All right.

Okay. Gentleman here.

[ Paul Karso ], that's the name in a shareholder for about 10 years -- it's interesting on Page 49. where you're listing the risks under information and cybersecurity, the risk is marked is decreasing. This is the first time I've seen in any annual report for cybersecurity that the risk is decreasing. It's usually either increasing or staying level. It says in this report, given the increase in the level and frequency of global cyber attacks, the likelihood of occurrence is therefore increasing, although current IT controls and monitoring towards are robust. So are they robust enough to keep track of all these new threats that are coming along that you can say the risk is decreasing.

Okay. Yes. So absolutely, globally, the risk posed from cyber is increasing. The reason we have a decreasing here is because this isn't the gross risk, this is the net risk. So the cyber risk is increasing, but we're also spending a lot more money and getting better at defending and detecting okay? So why -- when the same [ depleting ] is what we're saying is, over the last year, we've probably made more improvements than the risk has got worse, if you know what I mean we've got slightly ahead of it. We do everything we can on cyber. But I mean, let me be very clear, we are not in vulnerable no company is involved. If anyone tells you the are, you shouldn't believe them. It is my biggest risk that keeps me awake at night. And we do everything we reasonably can. I have a meeting every month to review what we're doing and what instance are we have a half-day meeting every quarter. So I think if something awful happens, we could look in the mirror and say we did everything we reasonably can, but we have to keep improving because the risk is going to keep improving. And it gets harder because it's no longer under our control. We live in a very, very connected world, where we're connected to a lot of suppliers. And if they go down, there might be nothing wrong in our systems but massively disruptive to us. So you may remember in KFC ran out of chicken 3 or 4 years ago. That was a supply chain issue. It wasn't anything with them. If trade team will breaks had a major cybersecurity, say instant. That would be hugely impactful on us, but it's not even within our direct control. So we have to then drift into business continuity and how we respond to these. It's a horrible area. but it's an area we are, I believe, investing everything we possibly can and, but that does not make us vulnerable.

Okay. It's good to know that you're investing everything you can on keeping abreast system.

And the Board regularly have updates and it's very much on top of our agenda. We're very -- as Tim said, we're very aware of the issues. And we've invested a lot of money in, obviously, making sure that we can be invulnerable as possible.

Yes. Next question. Gentlemen behind at the back there.

Good morning, Chairman and members of the Board. My name is Ian Brindle and I represent CAMRA Members Investment Club. Holders of just to have a 0.5 million shares in the company. We are an informal investment club, and I have to emphasize that we're not formally linked to the campaign for rail aisle, and I do not speak on behalf of CAMRA, but we have over 2,500 members who are all themselves members of CAMRA, and we share the objective of promoting the production and retailing of traditional cash conditioned IOs. We have investments currently valued in excess of GBP 16 million, which is invested entirely in companies associated with the production, distribution and retailing of traditional Cask Ale. Just before I come to the question, thank you for arranging the date. It doesn't clash with Marston's. That is appreciated. Thank you. My question relates to the sale of Cask Ale through the competitors date. And I wonder if you could update me on the company's current approach to the retailing of traditional Cask Ale through our various brands. And just an update on the volume and trends in Cask Ale sales and availability through the estate during the past 12 months. Thank you.

Looking at me. I'll hand up straight away. I can't give you the deep depth exact numbers on volumes. But look Cask Ale still plays a big part in what we do, particularly as you all know, in Nicholsons, in Ember Inns, as you know, you all know as a drinker of Cask Ale you need volume to have quality. So the worst thing you could do is have loader wickets on the bar and without the volume because then the product deteriorates. So as we came out of COVID, and this time has ticked on, what tends to happen, we'll have a sort of a must-stock or a brand stock line up. And then as the business starts to recover, it's able then to buy across a bigger range. And that's really what you want to see because you start to get a reputation and a following for your Cask Ale and then you put more the decision-making down into local level because they'll not know what their customers wants and demand. And that's the approach we take. So I would hope today within Nicholson's a majority of Ember Inns that have historically been big Cask Ale houses, they're almost back to where they were, if not beyond. In our other brands, it's more on a site-by-site basis if there's a demand and a requirement for it, then we'll extend and we're following exactly the same principles. We start with brand decision about what they'll stock and then as demand grows and the volume starts to increase, they will have that ability to shop against a wider portfolio. We'll always get questions about a certain beer in a certain locality, and why can't we have that. And now our procurement team are really good to try to respond to that. But obviously, we also try to use our scale to ensure we get best price. So there is trade-off sometimes between to offer every single beer, but we try to accommodate that if the demand is strong enough and the volume dent for that business is strong enough.

And the advantage we have is we obviously don't own any breweries. So we are able to buy across the marketplace where, I mean, Greene King, for example, we want to sell their beers and therefore, we'll give priority to those. I mean we're very much focused on what the consumer wants and the changing in consumer demand. I mean, as we've seen in this Christmas, but in the last year, the growth in Guinness, for example, is something that we have to take seriously and especially as Phil said, with local beers, we can do that. But...

But one of the other things that may interest you and please you is that under our Ignite banner, which is a series of initiatives, 1 of the big waves of work coming for the year ahead is around the drink side of the business. We're sort of very cognizant of when I started the industry, we went around a pub, the first thing your manager, which proudly show you is [indiscernible] seller. And probably last will be the kitchen. It's almost the other way around in recent years. So we're resurrecting the drink side and focusing on everything that from the seller management through to product display, how you treat, how you sell it. I think that will grow interest and understanding and that in itself may raise quality and then grow volume and then maybe afford a greater range of Cask Ale in time.

Okay. Thank you That's encouraging, thank you.

Gentlemen here, please.

Good morning. Colin [indiscernible] Shareholder. You started off with the video of the various brands, and there's a 2-page spread in the annual report. It actually refers to over 20 years of existence in some of these brands, and I go back that far. And we think we've got a sort of latent familiarity and depreciation -- and I'm thinking of the likes of Toby and Harvester and possibly Ember. My question really is some of the newer brands don't seem to cut through so much with my people I speak to, when I talk to them about brands. I think Miller & Carter is doing well. I think Stonehouse and Sizzling are well known. But I wonder whether some of them, and I'm thinking in particular high street, possibly Castle, they don't appear to be known as brands across the country. And I wondered 2 questions really. Are there some brands that just holding a number of pubs in together under an umbrella without really wanting the brand to be so well recognized. And secondly, are there pubs that are no brand at all?

Yes. So well, I mean that's exactly it. I think something like Castle is more a better quality, and it's about -- it's a collection of pubs, and they've now got a marketing engine where they can say we are Castle pubs. So if you're a Castle pub user, you can look to see this is going to be a light pub, but they are quite an eclectic range of businesses. And you'd want them to be. They're not particularly Castle pub each 1 is slightly different than [indiscernible] Spanish and Hempstead being probably the premium end of that, but you've got some sort of music venues in there. So it is a collection, high street, the same. High Street is sort of legacy part of our business. We've split the high street entity between those that are branded under O'Neill's and O'Neill's work still works very, very well. But the unbranded ones have synergies with O'Neill's and some of the product lineup, but that's sensibly, there are individual pubs it's sort of high streets around the country. And I think I've been around long enough to know the mistake you can make is to try and force a brand on a business, when it's not really a branded business, and that's fine. But having a vehicle or a device that you can talk to helps with marketing, helps with communication with the customers, and that's the approach we take. That's why we have some hard brands and softer brands.

Okay. So the second part is there aren't any pubs that aren't branded, they or...

Well, in High Street, I would say they are unbranded. They sit under high street, but as a customer, you wouldn't know that they are branded. Gentlemen behind, yes.

Okay. Good morning, ladies and gentlemen. Peter Kirk, shareholder. It's been mentioned a couple of times the first bit is congratulating Mr. Urban, who the Chief Executive of this company for 10 years. And also, I'd like to thank the top table or whoever was responsible to changing the time of this meeting. from 9:00 to half past 11. This allows all shareholders the opportunity to attend this meeting, wherever they may live in United Kingdom. Right. As everybody knows here, Mr. Ivell has been Chairman of this company for more than 9 years. In this year's annual report, it was stated that Mr. Ivell has been great assistant there in these challenging times. I understand what has been said, but I believe this is a shortsighted view, I also believe that in the next -- the 2 executive director will leave this company in the next 5 years. Reading numerous annual reports, thanks to Google, I note that when one Executive Director leaves the company and a new one is appointed, I noted that soon after the other Executive Director leaves the company. So there. So -- and then especially, if they have been working together for more than like 10 years, I also expect at least 1 nonexecutive director to leave the company in the next 5 years. If Mr. Ivell continue to stay for the next 5 years. I believe he's going to be very busy in appointing all these new directors of the company.

Okay. Well, obviously, people do leave and move on. It's not always necessarily that the one executive leaves and another 1 follows, but it depends on age and a whole bunch of things. But clearly, we're very aware of that. We have plans in place. We have people that are coming up through the organization. So we're always looking at succession and growing people through the business. Clearly, you want the best person that you can get to fulfill those roles, if you do. So we clearly will -- if that's going to happen, we'll be looking out in the marketplace and comparing that with what we have internally. So it's a normal part of the job, to be frank. I think we have a very settled team here and -- which works extremely well together. And the market for -- in our business has been tough, but M&B have performed extremely well. And that's through the fact we've got a very set routine right through the organization, very good people that are growing and people have worked together for a long time to enhance the business. And you can go back 10, 12 years when the business was in a lot of people were leaving and coming and going. So we've now had a good period of stability. And I think that's what's very important in a business like ours. And it's an industry that has high turnover, particularly at the sharp end of the business. But we have been bringing that down as well.

If I maybe -- I mean big bit of color I'm very aware of what you're saying and managing sort of what the change of the guard is something that I'm acutely aware of. You may not be aware, I have 10 people in my executive. I think we've changed 2 of the divisional directors over the last 4, 5 years, seamlessly, I wouldn't know the businesses are carried on got new company secretary sitting there in front row that came in about 18 months ago, the Property Director is about to change new Property Director starting. So my team is changing. And my job is to make sure everybody hasn't going at the same time that we are seamlessly handing over, and we will continue to do that. That's the challenge. Now of course, we're going to get into -- may include a get to an age, where they can't work forever. I have known, but I have a commitment to the Board to see these changes through, and we will do so in a way that I think we -- our track record is such that we make these changes and the business carries on, and that's what we'll do.

That if you left the company in the next, should we say 2 years, just as an example, have you got anybody trained to almost take over from in your position?

The way the -- so from my role, for Tim's role, I think we would always look at the market. And a lot will depend upon the timing of when people go because the Board may take the view that we want continuity in which case is a bigger argument for an internal successor or equally may take the view that actually now is a time for some fresh perspective. Now the organization, I would talk about my tenure as the start was about existence, making sure this company came through. We're beginning to come through the other end. And so we transition to a more progressive view. So I think it will depend upon what's required. I think we always identify internal talent. And a lot will depend upon timing of whether people are ready. But we also need to recognize the worst thing we could do is to recruit within all the time because we just get group think then so are balanced. In our -- the people I've just said they've changed. We've got an external Company Secretary, external Property Director, but the 2 divisional directors were within. So it's a nice balance and a mix and our operations directed level, we have tended to have a 50-50 coming from the outside and coming through the ranks. So you continue to bring in new ideas. That's the approach we'll take. Absolutely trying to nurture internal talent where we can -- but I think sometimes it's appropriate to look externally just to freshen things up.

Dona [indiscernible], shareholder. I'd like to ask about the company's policy for dealing with food wastage and whether you keep records on that.

Yes, we absolutely do. And in fact, that should be a big partner company report [indiscernible] our sustainability strategy. So yes, we are -- we have a big focus on food wastage. We're looking at every aspect of that in terms of our production, in terms of what comes back on plate from guests, in terms of what's in our supply chain. We work with external organizations, fair share and too good to go, which ensures that fair share take waste within the supply chain that we're not going to use. It goes to a good cause isn't wasted. And too good to go, we'll take product left over the end of service and we'll package or themselves. So we've been very successful at bringing down our food waste. The next stage of that is and the hardest bit to get at is plate waste particularly in a brand like Toby, where if you've been in a Toby Carvery, you will see people balancing their potatoes back table. If they don't eat all of that, that is food waste. And that's quite difficult to how you convey to your guests. So we have lots of messaging around what we're trying to do to save the planet in the hope that people's change behaviors, and we encourage people rather than pay a plate high on second -- come up seconds rather than waste. So plenty of angle of that, and we do report it.

Dave, I mean the only thing I'd add really just embellish is what Phil has said is we take a holistic approach to it. So we're looking at it not just through the lens of food waste, but through our whole approach to sustainability. So that means that we just look at every angle and see what we can do. I think that trick is [ beer ] Phil was saying, is how we help their guests join us on that journey because we've all got a part to play in sort of reducing the waste to the lowest level it can be. But we have a team of people that are looking at all of this all the time and much wider than just food race. So we're on the case.

Okay. Gentlemen here.

Jeffrey Harris, private shareholder. I currently visit Carter exactly 15x per year. I would complement whoever ranges a wine visit is very good indeed. And with the smoothing effect of the of 20% of the vouchers and I'm sure others upscaled the wine time, normally hosting the table of 8 or so -- and because of the voucher, I'll up scale to [indiscernible]. So my question to you is, would you like me to visit 30 times a year, and if that were positive, will you consider issuing some more vouchers when you enter...

Good question, good question.

See if I can answer that one.

Yes. I'll ask the finance -- he's got to put -- and actually, if you're drinking that, can we come too?

Okay any other questions? -- the gentleman just here?

I don't know, if it's a question for you, is the board or see somebody later. Being a shareholder since the dots and I'll visit been visiting the Carvery, which is a Stonehouse, is at little outside Birmingham, very good service and being excellent. What the beginning of -- sorry, beginning of December, -- and the staff were very upset. I had a phone call the day before to say it was closing down. Unfortunately, it's used before Christmas, and I believe it shut its doors about the 20s or something like that of December. The young lady, who is one of the waitresses have got the job of phoning up customers that have booked Christmas meals. And she said, they'll be very unhappy and they'll probably never visit Mitchells & Butlers property again. The -- when I left a property, I said I've been going there for, well, I would say over 40 years, have had excellent food there and excellent service, never had a problem. But the girl was almost crying because she only just had the phone call an up before to say the staff will be made redundant. And she said, why didn't they wait until the New Year. So they would cash in on the meals that they've been ordered, and they got the job of bringing around just trying to find somewhere else to these people to eat. Very obsession for the staff...

Maybe I can take that one. Firstly, for apologies that because -- I mean, I know we have shut 1 or 2 Stonehouses that either the leasehold and they're just not economic. It sounds very unlikely that we would have done that by design. So we obviously did and I apologize for that because that shouldn't happen. When we do close a business, we do -- we work very hard to redeploy the team. Now if a site is obviously in a locality with nothing around. There's only so much you can do, but invariably, we managed to redeploy -- but doing it so close to Christmas where we've taken bookings, it doesn't sound like that was particularly clever. I should remember, but I don't remember that particular decision starting in December. So I will...

I believe that a company has bought it and said is converting into an Italian, Dine or whatever restaurant and they wanted a property like ASAP.

Yes. I -- apology that. [indiscernible] refresh. But we would be aware, we don't have wholesale disposals. But as you'd expect us to do, we are constantly looking at our bottom 20 sites. And if they are in a position where they're starting to get -- lose money, it makes no sense persevering if we can find a way out but we would typically -- that's why I'm a bit confused because I would absolutely be saying the same thing, let's get Christmas up and close in January.

No -- I mean it's -- I mean I agree with you it's silly to lose business. And what we tend to do when we close the place or we get rid of a place, we try to keep those customers by encouraging them to go to other places that we've got locally and through vouchers or whatever. So we're very keen to keep customers.

And when the nearest establishment is improvement feathers, but surely back to another, some can say it's another 4 miles, 5 miles .

For some -- people, and let's say, Bob. But we do -- so we're looking to that and possibly have a chat with you all.

The comment -- understand. . Working your way up. This is another, as a gentlemen behind.

[ Brian Riggle ] from Sheffield. And when I got the annual report, I had a look at it pretend to read every single page -- but I get the sort of speed read of the -- what I thought was the interesting paragraphs. And I was really intrigued, if not amazed at the way in which the company now seem to be progressing and coming along. And you had a really good picture in the product, and I thought to yourself we really should congratulate the Board and indeed, everybody who works for Mitchells & Butlers, you're all contribute in 1 way or another. And as it got into the autumn and so on onto Christmas, I have to say to you also that locally, our Miller & Carter and the EGO that you've taken over now seem to be exceedingly well I won't say it was impossible to get a table there, but the occupancy was really, really good. So I like you see in a sense because you made a reference to this in the opening part of this meeting. kept an eye on the price of the shares -- and of course, they have gone down quite considerably since the highest figure that they reached last year, which I think was 334 last year, if I'm something like that. So I appreciate this is a public meeting because you do that, but being very careful as to what you say when we're talking about share prices. But if you got any indication of a, why it seems to have collapsed almost now today to the lowest -- or almost the lowest price, show me about [ 12p ] of the lowest price as something for the last 12 months. And have you got any indication as I say, I appreciate it's maybe commercially centered indication that you can say publicly as to how you think the share price might go on for this year.

I'll let my SP answer the second bit of that because you can't kick me from here. But what I would say, look, yes, we absolutely share the frustration, but I'm sure those of you who hold stock in our sector, knows, it's not us, it's the sector. And it is super frustrating. But just as we get momentum, the charters budget, another cost in the industry and the markets react immediately. So you -- it constantly feels like each time we're moving ahead then something like that happens. But yes, believe me, the frustration here and in the company is probably equal shores, we believe we are doing the right things. We are growing this business. We're growing our top line. It will come right. But -- as you know, shares don't always follow what you expect, but I'll let me hit my FD .

I mean that's the answer, really. It's obviously frustrating. It's nothing to do with us. And it sounds ridiculous to sit here and say share price has nothing to do with us, but it hasn't been in the last year. We're getting tossed around on seas of bond yields and inflation expectations and U.S. tariffs coming on and further recession. And in that environment, it's very difficult to get people to invest. Most long fund investors, U.K. investors tend to sort shares dramatically. And we're obviously U.K. consumer, domestic consumer -- and that is an area that they don't -- they see is highly risky and where they don't want to expose them to in the near term. So it feels a little bit like we're in a box on their shelf. And one day, they'll open that box because the macroeconomics will be more attractive. But at the moment, we're just sort of not really on their radar. And that's enormously frustrating -- but all we can do is focus on the reality of the business of executing well, having a decent strategy, being responsible and creating value within the organization.

I mean, it's not just the hospitality industry. I mean it's the retail industry, you have seen what's going on, on the high street. And for our sector, the bigger players like ourselves clearly, I think, have been performing pretty well, but all of the shares that are public have suffered. I sit on the Board of U.K. hospitality that represent the industry who've been lobbying for a whole bunch of stuff. And I mean there is a big concern about some of the smaller players in the market that with national insurance and stuff that's going to hit them is going to make it life very tough for them. I mean -- so I think as both the guys have said, we are constantly frustrated. We go so like in November, we put out our results. The analysts think the results are good, the share price goes down. And you think, well, we've been for a number of years now. And I don't know, if we've got that slide, but we have a slide just to show how we've performed the -- the against the market. And you can -- you can see it's -- we have outperformed the market, particularly on is a thing called Peak tracker, which is actually look at the -- basically takes all the data and plan, and we have outperformed that now for 2 years. 9 year, I suppose. But so it's frustrating. But actually, if you look at the other public companies, they've gone down, their share prices have gone down more than out. So something like Tim Martin's share price would or on the I can't see that. Yes, yes.

Unfortunately, obviously, only a couple of listed companies now, so you can't track them all, but Yes, it is frustrating. So we can say that. And if you want to lobby the government to stop in hitting our industry with costs, I thought we were going for growth, but they go. Sorry. Do you, can I just do a couple of people who haven't had a question yet. What we got the back -- your friend. Yes.

Thank you. Mr. Chairman, good morning, ladies and gentlemen. Very sorry that was late on parade this morning, and imagine. Obviously, the Board there operate on time anyway, Alastair Boyd, retail shareholders, the West London branch having traveled up from London with Roger here. Take slightly continuation to what in Brian said just now about the cash condition base, setting 1 or 2 of the brands in London, you might really the Nicolsons and the Castle pubs. Firstly, I think it could still be a lot better than it is. I think those 2 aspects of the company could be a lot more adventurous -- the recent [ BS ] festivals that was held by [indiscernible]. Wasn't, in my opinion, as good as it was in the past. To be a relatively small stillage, but to talk about the cost be, there's still some fantastic BS out there. I'd like to see a lot more come into particular those 2 parts of the company and indeed, maybe the Toby pubs up and down here. And also following on from Dennis of lately the story out there that's a shortage of genes. I think obviously, clearly, from Seattle that's propaganda. But it's been picked up obviously by a lot of smaller people what brewery darts done, which are fantastic, really I'd like to see a lot more of them come in. And also to slightly disappointed on what's happened at the Royal Jorge on turning crossroad. I went in there. Obviously, the public being closed for a while for a major reference in there the case to bar, the hand pump has gone, [indiscernible] has gone. I don't imagine it was one of the great sales anyway because that type of establishment lighten and assist the topic Phoenix, oxid circus way. Well, that's a different mark. Yes. And I had to cap with 1 or 2 of the people guarding the pub, any times maybe restating cost beer, not going to happen, certainly not in the foreseeable future. I'd like to see it maybe come back. I think it would be important in a way. But that's really.

Okay. I mean If I -- I mean, I think you're getting into some site specifics. But we take the right product decisions we believe are the right product decisions side by side. I think what I would say to you about Nicholson's, look, I actually understand your representing CAMRA, that's your passion. But if I said to you, Nicholson's 3 years on the road on the drop has been the best performing brand in the company and is growing its profits year in year out. it would say that a lot of what we're doing with the guy running Nicholson's is doing a pretty damn good job, and that would include the product lineup. So we look -- as I said to the gentleman earlier, look, we still see Cask Ale as an important part of what we do. We believe the setup is the right setup. I'm sure it's never going to be quite enough for someone who's as passionate about Cask Ale as you are. But we continue to listen and our managers continue to listen and that's how we develop our products. So it is sort of the same answer that I gave to the previous gentleman. And the work we're doing on our drinks and drinks quality can only help. And we'll see.

But maybe we can have a chat with Phil afterwards and talk to him about it.

On to the company's operations on 1 or 2 elements on faster, which have been a positive thing after stay post of past this meeting is happening today. And I've said we obviously go into the company pubs, send me back some feedback and what feedback up little bit pretty good anyway. People have set up this tasteful pub, Nicolsons for example, or [indiscernible] season has been pretty good.

Okay, Thanks very much. I think this gentleman was going to ask like last one. Last one.

I wanted to follow. [indiscernible] shareholder. I wanted to follow-up on the shareholder from Sheffield, who congratulated you on the efforts in the last year. And I've seen the profits are up 9.3% from the previous year. And on Page 37 is the chart that shows the effect on the profits. I know we're looking at the annual review of 2024, but it does show quite a strident increase on 2023. And I also looked at the chart on Page 6, which shows the year-on-year sales have gone backwards for a strident increase last year.

So from which page is that? Were on the KPI.

That's it's just key performance indicators. -- sorry. Okay. Out forward -- the question is still there. What's the reason for the profit given that 2023 looks to be going backwards. Was there something wrong in 2023 with hindsight?

2023 was obviously a hyperinflationary environment, right? So our costs are going up enormously, our energy bill went up GBP 60 million in that 1 year alone. Now that allowed us to grow sales quicker because we took a lot more price. We put our prices up quicker. But the net dynamic was negative, right? The costs went up more than we were able to capture by raising our prices. You had high sales, but you had higher costs. As we come off that, the rate of general inflation or cost inflation has ebbed and our sales have slowed at a lower rate, at a lagged rate, which obviously has a positive dynamic the profit. So that's why you have a lower level of like-for-like sales growth, you have a far more positive profit performance. We're now sort of broadly touch with stabilized in a more of a normal environment.

Okay. Just gentleman here, and then we'll wind it up. I think.

Yes, [indiscernible] shareholder. Page 134 of the annual report less the fees payable to the group's auditor. I was just wondering, it shows the in millions to 1 decimal place, whether you could put those figures into 2 decimal places. So you've got the audit of the company's subsidiaries financial statements, which are GBP 0.6 million, both this year and last year. But if last year had been rounded up to GBP 0.6 and this year had been rounded down to GBP 0.6, just showing it to 1 decimal place, won't reflect the increase. So that's just 1 point, whether you could put it to 2 decimal places. The other is just below the -- the amount of nonaudit fees payable to the group's auditor is shown as 10K this year and 6K last year. It doesn't actually say why it's gone up. It may be small compared with the financial statements. It would be good to know whether the auditors have increased their fees or whether you're giving them as an extra work to get that.

Okay. So context, we tendered our audit 3 years ago. We used to have Deloitte. Some of you will be familiar with that. We went through a process of all the big 4 and some second-tier firms -- part of that KPMG won that tender. But I sort of market tested it pretty well at that point. audit fees have gone up enormously in the last 7 or 8 years, no one should be under any misapprehension on that. Our audit fee at the moment with KPMG is basically just going up by indexation. I can't tell you what the second decimal point would be off the top of my head. What I will say to you all the rest of these accounts are only done to the nearest million. So it's sort of a concession that we went to 1 decimal point to give you a bit of granularity. So I don't know how far we go. In terms of nonaudit fees, the basic role is we don't give any nonaudit work to KPMG, and that is to maintain that independence. So 10-K is the here or there. What I think that represents is where we are a tenant in certain leasehold sites. The landlord rent might have a turnover element to it. So you pay a base rent and then a percentage of turnover. So we have to certify to the land or we'll get the auditors to certify to the landlord, what that turnover is so that they can charge it to the proper rents. That is a fee that we allow KPMG to do to be ludicrous to get anyone else in to do that. But in terms of any substantive piece of work, we wouldn't even consider KPMG. And frankly, I don't think they'll take it even if we try to appoint them.

Okay. I think we need to leave that there. I mean, the directors be available afterwards during the refreshment. So if you got any further individual questions, perhaps you can past people there.

I'll now move on to the formal part of the agenda. As in former years, the formal business today will be defined by way of a poll. The Notice of Annual General Meeting dated 19th of December 2024, our annual report were posted on the company's website and sent to those shareholders who requested a hard copy. The notice of the Annual General Meeting sets out the resolutions for today's meeting and the reasons why they're being proposed. As this is clearly set out in the notice, I do not now propose to repeat the information we propose to take the notice as read. As I mentioned earlier in the meeting, all the resolutions will be decided on a poll, and I now propose formally that each of the resolution set out in the notice of the meeting is put to the meeting, and I declare the poll open. Please now complete the poll cards to cast your votes on each resolution and sign and date the card and leave it as you go out of the room, place it in one of the ballot boxes at the doorway to the all immediately after the meeting. The poll will conclude 10 minutes after the close of this meeting. Any cards not handed in by then will not be included in the final vote. The company's registrars will act as scrutineers, and the results of the voting will be announced in the London Stock Exchange and posted on the company's website as soon as possible. So ladies and gentlemen, that concludes the business of the Annual General Meeting. I'd like to thank you for attending today. If you would like now to make your way outside, we're serving light refreshments and there'll be an opportunity, as I said, to speak to any of the directors. So thank you very much.