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Three Quick Facts: Mitchells and Butlers, Cineworld and DFS Furniture

By Tony Cross
24th September 2020

Related Topics: Cineworld [LON:CINE], DFS [LON:DFS], Mitchells and Butlers [LON:MAB]

Three things you need to know in the financial markets this morning from investment writer, Tony Cross.

Mitchells and Butlers

Mitchells and Butlers LON:MAB has published its pre-close trading update covering the 51 weeks to 19^th September this morning. Understandably it’s been a bruising year with total sales down by more than a third. The report makes an interesting breakdown of recent weeks, with government support schemes being sufficient to post a marginal like-for-like sales uptick in August. The company acknowledges the ongoing uncertainty but notes it has some £240m of liquidity headroom to hand.

Cineworld

Another leisure play which saw its trade decimated by lockdown was Cineworld LON:CINE. They have published results for the six months to June 30^th today, noting that admissions fell from 136m a year ago to just 47.5m in 2020. That turned the pre-tax profit of $140m into a pre-tax loss of $1645m. The company is encouraged by the early return of moviegoers worldwide towards the end of the reporting period but acknowledges that future direction could well be at the mercy of further lockdown threats.

DFS Furniture

Furniture retailer DFS LON:DFS has been another casualty of lockdown, as is reflected in their full year results which are published today. At first glance the numbers are flattered by the fact the comparative reporting season was only 48 weeks long. Once this is adjusted for, sales were down by a quarter, driving last year’s £22m pre-tax profit to a £75m pre-tax loss. The company notes however that the current trading year has started well and early indications suggest much of the revenue dip recorded for the financial year will be recovered. The company is exposed to the macroeconomic environment but people will always need sofas to sit on. Improvements in the ‘NPS’ (Net Promoter Score) are also worthy of note – further gains here would position the company very well. The dividend has unsurprisingly been suspended.