Financial Analysis of Mitchells & Butlers 2007 Annual Report
Title Page
Date: 12/12/09 The following report is designed for the purpose of a business analysis. I have chosen to analyse Mitchells & Butlers PLC by firstly, looking closely at the annual report produced by the company over a two year period and secondly, by researching their financial activities further than the annual report explains. I will compare and contrast ratios to help give the reader a better understanding of the company’s profitability, liquidity, activity and leverage. Summary In my analysis of Mitchells and Butlers PLC accounts for the years ending 2007 and 2008 I found that the Group has a very complex financial structure. Especially with the occurrence of a financial disaster which ended in the loss of two years worth of earnings, which, in turn resulted in the departure of the finance director and calls for further boardroom departures from the disgruntled shareholders. Mitchells & Butlers is a high geared business and therefore a risky investment venture. The company are well positioned in the market for long-term success but the ratios do let down the attractiveness of investment by their much lower percentage of current assets to current liabilities, high gearing and low net profit margins. *Brief Historical Background* Mitchells & Butlers is one of the UK’s largest operators of managed establishments with a strong portfolio of branded and unbranded pubs and restaurants with a mass market appeal. Their popular brands include All Bar One, Harvester and Ember Inns. Founded in Smethwick Birmingham as a result of the Beerhouse Act of 1830 easing the law on domestic brewing, Henry Mitchell’s and William Butler’s breweries merged in 1989. The company acquired rival breweries and rapidly expanded and merged with Bass in 1961, emerging as Six Continents before separating into hotel and retail businesses and becoming Mitchells & Butlers once again. Implication of Ratios on Mitchells & Butlers *(M&B)’s Financial
Date: 12/12/09 The following report is designed for the purpose of a business analysis. I have chosen to analyse Mitchells & Butlers PLC by firstly, looking closely at the annual report produced by the company over a two year period and secondly, by researching their financial activities further than the annual report explains. I will compare and contrast ratios to help give the reader a better understanding of the company’s profitability, liquidity, activity and leverage. Summary In my analysis of Mitchells and Butlers PLC accounts for the years ending 2007 and 2008 I found that the Group has a very complex financial structure. Especially with the occurrence of a financial disaster which ended in the loss of two years worth of earnings, which, in turn resulted in the departure of the finance director and calls for further boardroom departures from the disgruntled shareholders. Mitchells & Butlers is a high geared business and therefore a risky investment venture. The company are well positioned in the market for long-term success but the ratios do let down the attractiveness of investment by their much lower percentage of current assets to current liabilities, high gearing and low net profit margins. *Brief Historical Background* Mitchells & Butlers is one of the UK’s largest operators of managed establishments with a strong portfolio of branded and unbranded pubs and restaurants with a mass market appeal. Their popular brands include All Bar One, Harvester and Ember Inns. Founded in Smethwick Birmingham as a result of the Beerhouse Act of 1830 easing the law on domestic brewing, Henry Mitchell’s and William Butler’s breweries merged in 1989. The company acquired rival breweries and rapidly expanded and merged with Bass in 1961, emerging as Six Continents before separating into hotel and retail businesses and becoming Mitchells & Butlers once again. Implication of Ratios on Mitchells & Butlers *(M&B)’s Financial