Pub firm rides out smoke impact

Smokers have had to change their habits in Scotland

Pub firm Mitchells & Butlers (M&B) says early signs point to the impending smoking ban in England and Wales having only a limited impact on its business.

The firm has changed 200 pubs into non-smoking outlets ahead of the ban on smoking in enclosed space next year.

Sales growth at these outlets was only 1% lower over the past year than pubs where smoking is still permitted.

Like-for-like sales at the firm's Scottish pubs - where smoking is already outlawed - have risen 1%.

Winter wait

Despite dire early warnings about the impact of the smoking ban on the pub trade, many pub firms now seem upbeat about the likely results.

A full winter's trading is required before taking a definitive view on the ban's effect Mitchells & Butlers statement See Mitchells & Butlers' shares

M&B, which operates 2,000 UK pubs, said the results so far in Scotland indicated that larger pubs able to serve high-quality food would benefit.

But smaller outfits with a bias towards beer sales could suffer.

Over the past seven weeks, food sales at the firm's 80 Scottish pubs have risen 7%, while drink sales have fallen 2%.

"Sales growth has slowed as the autumn has drawn in and we continue to believe that a full winter's trading is required before taking a definitive view on the ban's effect," the firm said in a statement.

Overall, M&B reported a 4.1% rise in like-for-like sales over the past year as the firm benefited from a hot summer.

Pre-tax profits in the year to the end of September rose 10% to £208m, while total sales increased 5.5% to £1.7bn.