annual report and accounts 
2013
mitchells  butlers plc annual report and accounts 2013 wwwmbplccom
brands 
people 
love we’re the largest operator of 
managed restaurants pubs 
and bars in the uk providing 
a wide choice of eating and 
drinkingout experiences 
through our well known 
brands and delivering great 
service quality and value  
for money to our guests
reasons to invest
 —  strong business 
foundations
 —  transformation 
programme on track
 —  substantial expansion 
opportunities
 —  clear operational 
priorities
we are well positioned to 
deliver sustainable growth
contents
company overview
ifc	 brands	people	love
01	 2013	financial	highlights
02	 chairman’s	statement
04	 mitchells		butlers	at	a	glance 	
strategic and business review
07	 our	vision
09	 our	markets	and	customers
11	 our	opportunities
17	 our	business	model	and	strategy
18	 risks	and	uncertainties
21	 key	performance	indicators
22	 chief	executive’s	market	and	business	review
28	 corporate	social	responsibility
32	 financial	review
governance
36	 board	of	directors
38	 directors’	report
41	 directors’	responsibilities	statement
42	 corporate	governance	statement
47	 audit	committee	report
50	 report	on	directors’	remuneration
financial statements
66	 	 independent	auditor’s	report	to	the 	 	
members	of	mitchells		butlers	plc
68	 group	income	statement
69	 group	statement	of	comprehensive	income
70	 group	balance	sheet
71	 group	statement	of	changes	in	equity
72	 group	cash	flow	statement
73	 notes	to	the	financial	statements
99	 	 five	year	review 	
income	 statement	 information
100	 	 company	balance	sheet
101	 	 notes	to	the	company	financial	statements
shareholder information
108	 shareholder 	 information
108	 glossary
go online wwwmbplccom
what you’ll find
investor relations
corporate responsibility 
brands people love 2013 financial highlights
		 adjusted	figures	refer	to	results	before	exceptional	items 	
and	other	adjustments	as	noted	in	the	group	income 	
statement	growth	rates	are	against	a	comparable 	 	
52	week	income	statement	in	fy	2012
revenue 
£1895m
adjusted operating profit 
£312m
adjusted earnings per share 
349p 
22
51
171
01
mitchells  butlers plc annual report and accounts 2013
strategic and business review 07 – 34 governance 35 – 64 financial statements 65 – 106 shareholder information 107 – 108 company overview 01 – 05 chairman’s  
statement
right 
size
this has been a year of good 
progress within your business 
we have strengthened the 
board with three independent 
nonexecutive directors 
continued to make the changes 
necessary to transform the 
business from good to great 
and delivered a 17 increase  
in adjusted earnings per share  
whilst a number of challenges 
remain we can look to the 
future with confidence
balanced  
transformation
we are now reshaping the business so 
that we can consistently deliver great 
service to our guests to drive repeat 
visits and recommendation while 
delivering good financial results
in fy 2012 we restructured our  
retail support centre to reduce 
bureaucracy speed up decision 
making and start the cultural  
change journey
the value creation journey
mitchells  butlers plc annual report and accounts 2013
02 this time last year i wrote that my key focus  
for 2013 would be to enhance the balance 
skills and compliance of the board through  
the selection of appropriately qualified 
independent nonexecutive directors  
i am delighted therefore that during the  
last year we have appointed three board 
directors of exceptional capability
imelda walsh has brought excellent people 
management and retailing skills to the board 
and is therefore an ideal person to fill the role  
of our remuneration committee chair she has 
held senior executive roles at j sainsbury plc 
where she was group hr director from 2004 
to 2010 barclays bank plc and cocacola  
schweppes beverages limited she is a  
nonexecutive director and remuneration 
committee chair of both william hill plc and 
mothercare plc
colin rutherford’s corporate finance and 
accountancy skills are already proving highly 
valuable to the board particularly in his role  
as our audit committee chair he was 
executive chairman of mam funds plc  
a quoted fund management business from  
2009 to 2011 is a member of the institute of 
chartered accountants of scotland and  
has relevant experience in various public  
and private companies in the leisure and  
hospitality industries he is currently  
chairman of brookgate limited european  
care group limited and teachers media 
international limited
stewart gilliland’s senior management 
experience predominantly in the brewing 
sector is highly relevant to many of the 
challenges that our business faces he was 
chief executive officer of muller dairy uk 
limited until 2010 and prior to that held senior 
management positions in inbev sa interbrew 
uk limited and whitbread plc he is currently 
a nonexecutive director of booker group plc 
sutton and east surrey water co tulip group 
limited nature’s way foods limited cc 
group and vianet plc
since i was appointed executive chairman  
in october 2011 we have made significant 
improvements to our corporate governance 
over the past two years the board has 
recruited a strong leader in alistair darby  
and has strengthened the board through the 
appointments of eddie irwin imelda colin and 
stewart as nonexecutive directors in july we 
finalised the membership of our remuneration 
audit and nomination committees and have 
updated their terms of reference which are 
now in line with current best practice my focus 
will continue to be on further improvements  
in this area an example is this annual report 
itself which we have attempted to make  
more useful and understandable for our 
shareholders among other improvements  
we have included a new remuneration report 
provided more information on our market and 
our brands extended our key performance 
indicators and included many of the new 
requirements of the revised uk corporate 
governance code a year earlier than required 
i hope these changes prove helpful
balanced  
transformation
accelerating
forward
as this transformation gains traction 
the performance of the business will 
start to accelerate as we achieve our 
vision that guests love to eat and 
drink with us
for further information go to the  
chief executive’s market and  
business review on pages 22 to 27
the company is in discussions with the trustee 
of the group pension schemes regarding the 
triennial actuarial valuation which is dated as  
at 31 march 2013 in order to agree the funding 
shortfall and schedule of contributions we 
hope to conclude these discussions as quickly 
as possible whilst balancing the interests of all 
stakeholders
lastly i would like to praise the efforts of  
our 40000 employees our vision is that our 
guests love to eat and drink with us and we  
are indebted to all of our people from our 
restaurants pubs and retail support centre  
in birmingham as we work towards this
we are now in the balanced transformation 
stage of our value creation journey over the 
last 12 months we have bedded in the 
organisational changes announced last year 
and refined our brand strategies in light of 
changing consumer and market dynamics  
all this has been achieved whilst still growing 
sales improving operating margin and growing 
adjusted eps by 17 there remains a lot to  
do but the progress we have already made 
gives me great confidence in the future
bob ivell
chairman
  adjusted eps is stated before exceptional items  
and other adjustments growth against last year is 
compared to the 52 week adjusted eps as detailed  
in the financial review
03
mitchells  butlers plc annual report and accounts 2013
strategic and business review 07 – 34 governance 35 – 64 financial statements 65 – 106 shareholder information 107 – 108 company overview 01 – 05 mitchells  butlers  
at a glance
harvester
a welcoming place for families to spend time 
together have fun and share the pleasure of 
good honest food enjoy our free unlimited 
salad and fresh tasty grilled meat and fish
 
number of sites
210
toby carvery
the home of the roast t oby carvery is located 
in suburban pub settings across the uk  
serving four freshly prepared carved meats  
and abundant fresh vegetables every day of  
the week
number of sites
154
nicholson’s
a historic collection of iconic city pubs of 
distinction offering a warm welcome and  
the very best in british real ales and classic  
pub food
number of sites
77
ember inns
relaxed and welcoming suburban pubs  
where conversation flows we serve the best 
cask ales and classic pub food with a twist in 
stylish environments
number of sites
130
o’neill’s
pubs where you can savour irish food drink  
and hospitality with friends listen to live music 
or enjoy the latest sport events
number of sites
49
castle
a collection of unique pubs with individual 
personalities located in some of the best urban 
residential areas in and out of london serving 
the best draught beer and great pub food 
number of sites
97
04
mitchells  butlers plc annual report and accounts 2013 all bar one
a collection of femalefriendly city centre bars 
focused on wine cocktails and sharing food 
 
 
number of sites
47
miller  carter
y ou will not experience a better steak than that 
at miller  carter our award winning steak is 
served with pride across the uk 
 
number of sites
29
heartland
a collection of the uk’s friendliest pubs  
and carveries what unites these pubs is 
unbeatable value for money generosity and  
bighearted service
 
number of sites
415
country pubs
we are proud to manage over 300 of the best 
country pubs in the uk all offering modern pub 
food and outstanding drinks served with care 
and character by our teams a place to get away 
from the concerns of the everyday and relax  
in company and comfort
number of sites
314
browns
since opening our first browns in 1973 we’ve 
been providing delicious brasseriestyle food 
excellent wines and classic cocktails in beautiful 
surroundings with superb service the brand 
celebrated its 40th anniversary this year 
number of sites
27
alex
one of germany’s leading bar and brasserie 
brands offering classic meals salads and  
healthy snacks 
number of sites
40
05
mitchells  butlers plc annual report and accounts 2013
strategic and business review 07 – 34 governance 35 – 64 financial statements 65 – 106 shareholder information 107 – 108 company overview 01 – 05  
we serve around 130m meals  
each year 
 
 
130m
and serve around 410m drinks  
each year 
 
 
410m
06
mitchells  butlers plc annual report and accounts 2013  
our vision  
is that guests 
love to eat and 
drink with us
so how do we 
achieve this 
07
mitchells  butlers plc annual report and accounts 2013
company overview 01 – 05 governance 35 – 64 financial statements 65 – 106 shareholder information 107 – 108 strategic and business review 07 – 34 first we looked 
at our markets 
our guests and  
our brands
08
mitchells  butlers plc annual report and accounts 2013 2009 2010 2011 2012 2013 2014 2015
£12bn
£16bn
£10bn
£38bn
£39bn
£40bn
£41bn
£42bn
£43bn
£44bn
£14bn
£15bn
£12bn
£15bn
£15bn
£14bn
1997 2002 2007 2011
£108
£121
£183
£77
£108
£135
£202
£87
£101
£99
£154
£177
£83
£489
£532
£515
£482
£14bn
£15bn
£12bn
£158
£139
£86
2011 2007 2002 1997
17
18
41
29
41
45
2010 2000 1990 1980
10
20
30
40
our markets and customers
we operate in the uk eating and drinkingout 
market this is a large fragmented market 
worth £75bn we are one of the largest players 
with only 3 of market revenues and there is  
a significant opportunity to grow our share
revenue by region 
london the east and the south east have 
achieved substantially more growth in the 
downturn than the rest of the country and 
this trend is forecast to continue 45 of our 
revenues are generated in these regions
eatingout market
£49bn
drinkingout market
£26bn
total market value
£75bn
scotland – 5
north east – 3
yorkshirehumberside – 8
north west – 9
east midlands – 5
west midlands – 14
east – 7
london – 23
wales – 4
south east – 15
south west – 7
the eating and drinkingout market 
food remains the primary long term route to 
sustainable growth in this sector three quarters 
of our sales are foodrelated
 eatingout
 drinking in 
 drinkingout on trade  off trade
fig 1 –  of uk consumer spending fig 2 – uk beer market volumes million barrels
  source ons household final consumption  
expenditure 2011
 source the british beer and pub association
branded growing faster  
than unbranded
the branded restaurant and pub sector has 
grown and is forecast to grow at a faster rate 
than the unbranded sector see fig 3 
eatingout has been protected
in the downturn families have protected low 
ticket leisure spending see fig 4
  branded pubs  
restaurants
 
 unbranded restaurants
 unbranded pubs
 leisure  alcohol
  clothes cars  other 
discretionary
 housing
 food  essentials
fig 4 – £ average household weekly expenditure fig 3 – uk market size
 source allegra project restaurant 2012
 source ons family spending survey 2012
source allegra project restaurant 2013 ons household 
final consumption expenditure 2011
our sales by region
09
mitchells  butlers plc annual report and accounts 2013
company overview 01 – 05 governance 35 – 64 financial statements 65 – 106 shareholder information 107 – 108 strategic and business review 07 – 34     a n d i d e n t i fied 
where there are 
opportunities for 
us to grow our 
business
10
mitchells  butlers plc annual report and accounts 2013  
z
we believe that there are areas of substantial 
opportunity to grow in our highly fragmented 
market worth £75bn in the uk we have 
identified five market spaces in which to focus 
covering around half the total market size  
we have three broad operating and expansion 
strategies to maximise our returns in each of 
these spaces
our opportunities
optimise   
invest
invest  
 expand
protect  
compete
mitchells   
butlers plc
upmarket 
social
brands
all bar one
castle
nicholson’s
alex
market value
£8bn
special
brands
miller  carter
country pubs
browns
market value
£22bn
family
brands
harvester
toby carvery
market value
£5bn
everyday  
social
brands
ember inns
o’neill’s
 
market value
£2bn
heartland
brands
oak tree pubs 
sizzling pubs
crown carveries
market value
£4bn
11
mitchells  butlers plc annual report and accounts 2013
company overview 01 – 05 governance 35 – 64 financial statements 65 – 106 shareholder information 107 – 108 strategic and business review 07 – 34 invest  expand 
 t ob y ca rv ery
number of outlets
154
founded in
1973
number of employees
5000
12
mitchells  butlers plc annual report and accounts 2013 invest  expand 
 miller  carter
number of outlets
29
founded in
2006
number of employees
1000
13
mitchells  butlers plc annual report and accounts 2013
company overview 01 – 05 governance 35 – 64 financial statements 65 – 106 shareholder information 107 – 108 strategic and business review 07 – 34 optimise  invest
 e mber inns
number of outlets
130
founded in
1999
number of employees
2000
14
mitchells  butlers plc annual report and accounts 2013 protect  compete 
sizzling pubs
number of outlets
220
founded in
2001
number of employees
3500
15
mitchells  butlers plc annual report and accounts 2013
company overview 01 – 05 governance 35 – 64 financial statements 65 – 106 shareholder information 107 – 108 strategic and business review 07 – 34 t o help us 
maximise these 
opportunities  
we apply a  
simple business 
model and clear 
strategy to deliver 
sustainable growth 
for shareholders
16
mitchells  butlers plc annual report and accounts 2013 our business model and strategy
what we do
mitchells  butlers is the leading operator of 
restaurants and pubs in the uk with multiple 
brands spanning around 1600 locations 
how we do it
our 40000 employees and leading portfolio  
of brands are focused on delighting our  
guests and delivering growth in the eating  
and drinkingout market
how we create value
we run businesses that people love to  
eat and drink in and as a result grow 
shareholder value 
our strategy 
1  focus the business 
on the most attractive 
market spaces within 
eating and drinkingout
2  develop superior 
brand propositions 
with high levels of 
consumer relevance
3  recruit retain and 
develop engaged 
people who deliver 
excellent service  
for our guests
4  generate high returns 
on investment through 
scale advantage
5  maintain a sound  
financial base
2013 progress see chief executive’s market and business review on pages 22 to 27
• we completed a 
significant piece of 
research to update  
our understanding  
of current and future 
consumer trends 
opportunities and  
brand growth potential
• this research included 
interviews with 8000 
consumers meetings 
with industry 
commentators and a 
thorough review of 
macroeconomic 
indicators and forecasts
• we aligned our 
operating strategies to 
the market dynamics 
within each space
• we delivered further 
growth in food sales and 
margin in a challenging 
environment
• our ‘good to great’ 
programme continued 
to reduce the level of 
administration within the 
business freeing  
up our operational 
teams to deliver 
improved service
• we redesigned our 
guest service and food 
capability training 
programmes
• we actively support 
apprenticeship schemes 
and at our year end  
we were employing  
c 1600 apprentices
• we have continued to 
refine our methods of 
site selection making 
use of our improved 
consumer insight
• we opened 16 new 
restaurants and pubs  
in the year
• we have longterm 
debt financing  
secured on our large 
predominantly freehold 
asset base
• at the year end our 
freehold property  
was revalued and  
we conducted an 
impairment review on 
other assets taken 
together this resulted  
in an increase in value 
of £31m
2013 performance
• we focused the 
business on five 
attractive market spaces 
within the £75bn eating 
and drinkingout market 
special family upmarket 
social everyday social 
and heartland
• total sales increased 
22 compared to  
52 week revenue in  
fy 2012
• our net promoter  
score increased by  
4 percentage points  
to 59 
• staff turnover in our 
restaurants and  
pubs was down 4 
percentage points  
to 78
• we made a 17  
ebitda return on  
the expansionary 
investments made in  
our brand portfolio over 
the last three years
• net debt reduced to 
42 times ebitda  
from 45 times at the 
last year end
2014 priorities
• we will open new 
restaurants and pubs 
especially in the family 
upmarket social and 
special market spaces
• we will focus on the 
execution of our  
brand strategies  
based on strong 
consumer insight
• we will roll out new  
tills table and kitchen 
management systems 
across our estate which 
are designed to improve 
guest service 
significantly
• we have launched a 
people strategy which 
aims to improve further 
our recruitment 
induction guest service 
and food capability 
programmes across our 
restaurants and pubs
• we will continue our 
focus on improving  
the efficiency of our 
investments
• we will further increase 
the clarity of our capital 
allocation investing 
where the returns are 
most attractive
• we will continue to 
prioritise longterm 
financial stability for  
the group
key risks see risks and uncertainties on pages 18 to 20
• failure to anticipate 
pricing and market 
changes
• failure to anticipate 
changes in consumer 
taste
• failure to anticipate 
pricing and market 
changes
• failure to anticipate 
changes in consumer 
taste
• failure to attract retain 
develop and motivate 
the best people with  
the right capabilities
• cost of goods price 
increases including 
energy
• failure to attract high 
quality teams to  
operate newly opened 
restaurants and pubs
• the pension fund 
deficit may increase 
leading to increases in 
funding requirements
• failure to manage 
performance against 
our borrowing 
covenants
17
mitchells  butlers plc annual report and accounts 2013
company overview 01 – 05 governance 35 – 64 financial statements 65 – 106 shareholder information 107 – 108 strategic and business review 07 – 34 risks and uncertainties
this section highlights the principal risks 
that affect the company together with the 
key mitigating activities in place to manage 
those risks this does not represent a 
comprehensive list of all of the risks that the 
company faces but focuses on those that are 
currently considered to be of most concern
the risk committee met on four occasions in 
fy 2013 and continues to meet on a quarterly 
basis to review the key risks facing the 
business key risks identified are reviewed 
and assessed by the risk committee in terms 
of their likelihood and impact within the 
group’s ‘key risk heat map’ in conjunction 
with associated risk mitigation plans the 
processes that are used to identify and 
manage risks are described in the internal 
control and risk management statement  
on pages 45 and 46
actively managing  
potential risks
risks mapped to controls  
currently in place
residual risks prioritised  
for mitigation
confirmed with executive  
audit committee and board
risks identified assessed and prioritised
regular detailed risk reviews by  
risk committee
risk management process
overall board responsibility supported by  
risk and assurance functions
suggested action plans agreed  
to bridge gaps
options for controls identified and costed
plans approved by executive risk committee  
audit committee and board
existing controls enforced and tested
remedial action plans implemented
executive held accountable
18
mitchells  butlers plc annual report and accounts 2013 market risks risk description mitigating activities
consumer taste and  
brand management
social and demographic changes are driving 
the longterm growth in eatingout while at 
the same time leading to a steady decline 
in the sales of ontrade drinks without 
food these changes together with other 
developments in consumer taste may reduce 
the appeal of mitchells  butlers’ brands to 
its customers especially if the company fails 
to anticipate and identify these changes and 
respond to them adequately and promptly
in fy 2013 the company conducted a major piece of 
consumer research interviewing 8000 consumers about 
14000 leisure occasions this research examined macro 
economic trends consumer dynamics competitor and 
internal brand positioning and the company’s strengths 
and weaknesses the business is in the process of rolling 
out the outputs from this project to refine further its brand 
positioning and ensure the portfolio’s continued relevance 
for guests this is discussed in detail in the business 
review on pages 22 to 27
the company uses an online guest satisfaction survey to 
collect customer feedback this feedback together with  
the results of research studies is monitored and evaluated 
by a dedicated customer insight team to ensure that  
the relevance to customers of the company’s brands  
is maintained
net promoter score is the key measure of success in this 
area and this has improved from 55 in fy 2012 to 59 
in fy 2013
pricing and market changes external influences such as changes in the 
general economic climate or competitor 
activity could have a detrimental effect on 
customers’ spending patterns and therefore 
the company’s revenue profitability and 
consequently the value of its assets
mitchells  butlers’ business is focused on the longterm 
potential of the eatingout market the company owns 
sites across the uk with a wide spectrum of customer 
offers targeted at different consumer groups and leisure 
occasions this range allows the company to respond to 
changes in consumer expenditure either by flexing our 
offerings or by substituting a different brand at a particular 
location this activity is supported by dedicated sales and 
margin managers and asset planning teams which analyse 
and evaluate a range of information including that in 
respect of competitors
operational risks risk description mitigating activities
cost of goods price  
increases including  
energy price increases
increases in the price of goods for resale 
and utilities costs as a result of increases in 
global demand and uncertainty of supply 
in producing nations can have a significant 
impact on the cost base consequently 
impacting margins
mitchells  butlers leverages its scale to drive competitive 
cost advantage and collaborates with suppliers to increase 
efficiencies in the supply chain the fragmented nature 
of the food supply industry on the world commodity 
markets gives the company the opportunity to source 
products from a number of alternative suppliers in order 
to drive down cost the company continually evolves the 
composition of menus and retail prices in order to optimise 
value to the customer as well as profits for the company
the energy procurement strategy seeks to reduce  
the risk of cost increases and uncertainty over energy 
prices by a rolling programme of short and medium 
term purchases against forecast requirements  
a dedicated energy management team is responsible 
for optimising energy usage across the organisation by 
promoting energy efficient working practices via training 
and educational programmes and by the installation of  
energy efficient equipment
19
mitchells  butlers plc annual report and accounts 2013
company overview 01 – 05 governance 35 – 64 financial statements 65 – 106 shareholder information 107 – 108 strategic and business review 07 – 34 operational risks risk description mitigating activities
people planning and 
development
mitchells  butlers’ business has a strong 
customer focus and as such it is important 
that it is able to attract retain develop and 
motivate the best people with the right 
capabilities throughout the organisation
the company makes significant investment in training 
to ensure that its people have the right skills to perform 
their jobs successfully furthermore an employee survey 
is conducted annually to establish employee satisfaction 
and engagement and compare it with other companies as 
well as previous surveys where appropriate changes in 
working practices are made in response to the findings of 
these surveys 
remuneration packages are benchmarked to ensure that 
they remain competitive and a talent review process is used 
to provide structured succession planning 
staff turnover is the key measure of success in this area 
and this has improved from 82 in fy 2012 to 78 in 
fy 2013
business continuity and  
crisis management
mitchells  butlers relies on its food and 
drink supply chain and the key it systems 
underlying the business to serve its 
customers efficiently and effectively  
supply chain interruption it system failure  
or crises such as terrorist activity or the  
threat of disease pandemic might restrict 
sales or reduce operational effectiveness
the company has in place crisis and continuity plans that 
are tested and refreshed regularly
finance risks risk description mitigating activities
borrowing covenants there are risks that borrowing covenants are 
breached because of circumstances such as
i  a change in the economic climate leading 
to reduced cash inflows or
ii  a material change in the valuation of the 
property portfolio
the company maintains headroom against these risks  
the finance team conducts daily cash forecasting with 
periodic reviews at the treasury committee the roles of 
which include ensuring that the board treasury policy 
is adhered to monitoring its operation and agreeing 
appropriate strategies for recommendation to the board 
in addition regular forecasting and testing of covenant 
compliance is performed and frequent communication is 
maintained with the securitisation trustee
pension fund deficit there is a risk that the pension fund  
deficit increases because of poor  
investment performance lower longterm 
bond yields or increased life expectancy 
leading to unexpected increases in  
funding requirements on the company  
the triennial actuarial valuation carried out at 
31 march 2010 resulted in a deficit of £400m  
the 2013 valuation is currently ongoing
mitchells  butlers maintains a close dialogue with the 
trustees of the pension schemes and three of the 12 
trustees are appointed by the company the company  
has made significant additional contributions to reduce  
the funding deficit 
regulatory risks risk description mitigating activities
failure to operate  
safely and legally 
a major health and safety failure could  
lead to illness injury or loss of life or 
significant damage to the company’s  
or a brand’s reputation
mitchells  butlers maintains a robust programme of 
health and safety checks both within its restaurants and 
pubs and throughout the supply chain the dedicated 
safety assurance team uses a number of technical 
partners including food technologists microbiologists and 
allergen specialists to ensure that our food procedures 
are safe regular independent audits of trading sites are 
performed to ensure that procedures are followed and 
that appropriate standards are maintained food suppliers 
are required to meet the british retail consortium global 
standard for food safety and are subject to regular safety 
and quality audits comprehensive health and safety 
training programmes are in place
risks and uncertainties
continued
20
mitchells  butlers plc annual report and accounts 2013 we measure our performance and progress against our strategy through five key performance indicators this year we have included two  
additional nonfinancial kpis relating to our ability to retain our employees and to the extent that our guests would recommend our businesses to 
their friends and family these kpis are reviewed at every executive committee meeting and are central to our understanding of our performance
our performance in the year was as follows
kpi kpi definitions progress in fy 2013
1 staff turnover the number of leavers in our retail businesses 
expressed as a percentage of average retail 
employees this measure excludes site 
management as well as employees who leave 
and rejoin the business within the same year
the eating and drinkingout industry has 
traditionally had a high level of staff turnover 
we believe that reducing staff turnover will 
improve guest service and drive profitability 
following significant management focus staff 
turnover has reduced from 82 in fy 2012  
to 78 in fy 2013
2 net promoter score the net promoter score for a pub is defined  
as the percentage of responses where we  
score 9 or 10 out of 10 ‘brand promoters’  
less the percentage of responses where we 
score 0 to 6 out of 10 ‘brand detractors’ 
responses scoring 7 or 8 ‘passives’ are 
ignored in the calculation
net promoter score has increased from 55  
in fy 2012 to 59 in fy 2013 indicating a 
higher level of guest recommendation of  
our businesses
3 same outlet likeforlike  
sales growth
the sales this year compared to the sales in the 
previous year of all uk managed sites that were 
trading in the two periods being compared 
expressed as a percentage
our likeforlike sales increased 04 in  
fy 2013 lower than the increase of 21  
in fy 2012
4 incremental return on  
expansionary capital
expansionary capital includes investments 
made in new sites and investment in existing 
assets that increases the trading area or 
materially changes the customer offer 
incremental return is the growth in annual 
site ebitda expressed as a percentage of 
expansionary capital
the performance in this area remains above  
our cost of capital blended freehold and 
leasehold pretax ebitda returns of 17  
are being achieved on investments made  
since fy 2011 in line with last year
5 eps growth adjusted earnings per share for the year 
compared to last year as reported in the 
financial statements expressed as  
a percentage
52 week adjusted operating profit and  
adjusted eps were up 51 and 171 
respectively as a result of sales growth  
higher operating margins and lower interest 
charges fy 2012 adjusted operating profit 
up 10 and adjusted eps up 64
as a key measure of overall profitability and shareholder value creation eps growth forms a key part of the group’s remuneration  
policies for directors and other employees full details of the various schemes in operation are shown on pages 50 to 64 in the report  
on directors’ remuneration
key performance indicators
21
mitchells  butlers plc annual report and accounts 2013
company overview 01 – 05 governance 35 – 64 financial statements 65 – 106 shareholder information 107 – 108 strategic and business review 07 – 34 chief executive’s market  
and business review
we are the uk’s largest 
operator of managed 
restaurants and pubs  
with a high quality freehold 
estate some of the best 
known brands in the industry 
substantial scale and 
committed retail teams 
this year we have delivered a strong set of 
financial results with sales and margin growth 
adjusted eps up 17 and debt continuing to 
fall at the same time we have made good 
progress with our business transformation 
programme which is on track and aimed at 
focusing the business on four key priority areas 
our people our practices our guests and our 
profits we are confident this will help to drive 
our future growth and our ability to create 
additional shareholder value
market review
2013 has not been an easy year for uk 
consumers with wage rises not keeping pace 
with the general level of inflation in the 
economy discretionary income has remained 
tight this economic backdrop continues to 
drive a challenging consumer environment  
and ever greater expectations when people  
do choose to spend their money it is in this 
context that we are especially pleased with  
our financial progress this year a number of 
factors are impacting our market’s evolution 
and we believe will continue to do so
• the market is large but fragmented  
the eating and drinkingout market is worth 
£75bn a year and we are one of the largest 
players in that market with sales of around 
£2bn approximately 3 of the total our 
largest brand by sales harvester has just 
210 outlets in the uk compared to around 
125000 eating and drinkingout venues in 
total the opportunity for scale operators to 
grow by taking market share with leading 
brands is significant in a market of this size
• the importance of brands is increasing 
although the majority of the industry is 
unbranded the branded restaurant and  
pub sector has consistently grown at a faster 
rate than the unbranded sector and this  
has accelerated in the downturn as guests 
seek the guarantee of quality that a brand 
can offer we expect that this trend  
will continue
• leisure spending has been protected 
through the downturn families have 
tended to protect low ticket leisure 
spending average weekly family spending 
on leisure increased 4 from 2007 to 2011 
whereas overall weekly family expenditure 
was down 6 over the same time  
source ons family spending survey 2012
• food remains the primary longterm 
route to sustainable growth in this sector 
we benefit from being principally focused 
on eatingout with around three quarters of 
our turnover generated from guests eating 
in our restaurants and pubs we expect the 
eatingout market to grow at least in line 
with overall consumer spending in future 
even in the structurally declining drinking
out market brands and formats with strong 
locations a clear brand proposition and 
customer focus should outperform
• there are significant economic disparities 
by region and by economic grouping 
between 2006 and 2012 london the east 
and the south east achieved substantially 
higher economic growth than the rest 
of the country and this trend is forecast 
to continue 45 of our revenues are 
generated in these areas and we are 
well placed to benefit from this improving 
trend different economic groups have 
also been impacted to varying degrees by 
the economic slowdown and subsequent 
austerity measures baby boomers and 
more affluent economic groups have been 
relatively well protected whereas 18 to 34 
year olds and the lower income deciles 
have been the hardest hit our brand 
portfolio is targeted at guests from across 
a wide spectrum so it is increasingly 
important that we focus the business to 
benefit from these dynamics we have 
invested heavily in this area in fy 2013 
and our brand teams are now highly 
focused on the specific market trends 
which impact their guests
mitchells  butlers plc annual report and accounts 2013
22 our priorities  
in action
59 
our measure of guest recommendation  
net promoter score was up 4 percentage 
points to 59
23
mitchells  butlers plc annual report and accounts 2013
company overview 01 – 05 governance 35 – 64 financial statements 65 – 106 shareholder information 107 – 108 strategic and business review 07 – 34 chief executive’s market  
and business review continued
brand positioning operating strategies 
and expansion opportunities
we operate a wide range of scale brands and 
formats which offer food and drink across a 
broad spectrum of price points and occasions 
from a casual meeting with friends to special 
occasion dining we have identified five  
‘market spaces’ through our extensive 
consumer research on which to focus 
upmarket social special family everyday social 
and heartland these spaces cover about half 
of the £75bn eating and drinkingout market  
and are impacted by a wide range of market 
dynamics we are increasing the efficiency  
of our capital allocation and maximising our 
returns on investment through three broad 
operating and expansion strategies
invest  expand the upmarket social  
special and family spaces together worth 
£35bn currently benefit from the most 
attractive market trends and our businesses  
in these areas were the strongest performers  
in fy 2013 we have strong brands in these 
segments and we expect them to deliver good 
organic sales and profit growth in the future  
in addition we will be expanding our footprint 
in these areas and are currently focusing on 
harvester toby carvery miller  carter and 
all bar one where we can deliver attractive 
returns on investment we opened 13 new 
sites in these brands over the financial year we 
will also expand our other businesses in these 
market spaces on an opportunistic basis and 
we opened one browns and two alex sites in 
the year we expect the rate of new openings 
to accelerate in this segment over the medium 
term towards 50 each year
optimise  invest the everyday social space 
currently worth £2bn is a market focused on 
drinking and eatingout in relaxed comfortable 
community pubs we expect to grow in this 
area through optimising the sites we already 
have rather than expanding site numbers 
to this end we have reallocated a proportion 
of our maintenance capital to improve amenity 
levels in certain brands and ensure the 
brand positioning is suitable for their target 
customers as an example we are planning 
to invest in ember inns over the next two 
years with a clear focus on driving both drink 
and food volumes in warm and welcoming 
suburban pubs firmly embedded in their 
local communities
protect  compete the heartland space 
worth £4bn is a market characterised by the 
need to offer value to consumers who have 
been most exposed to the economic downturn 
the effects of the recession and austerity have 
hit this consumer group more than other 
segments and the market dynamics are the 
most difficult of the market spaces in which  
we operate our strategy is based around  
local flexibility and working hard to deliver 
exceptional value for our guests while 
generating cash new menus in sizzling pubs 
and oak tree pubs resulted in an improved 
volume performance in the second half of the 
year we have extended our sports coverage 
with both sky sports and bt sport and we are 
focusing on improved staff recruitment and 
induction as a further example of this strategy 
we recently launched new autumn menus in 
crown carveries which featured great value 
main courses at £369 compared to the main 
carvery price of £419 these products satisfy  
a guest need for great value traditional meals 
at a price point less than £4 whilst protecting 
our cash margins per dish we have also 
restructured our operations in this area with  
a more efficient structure now in place to 
reduce travel time for regional management
business transformation programme
in the half year results we discussed how  
we are transforming the business to deliver 
longterm growth in shareholder value by 
addressing some core questions how we 
attract develop and retain outstanding and 
engaged people how we operate scale  
brands and formats effectively and how we 
consistently delight our guests and therefore 
achieve market leadership
2013 is the first full year of the transformation 
programme in fy 2012 we successfully 
restructured our central functions and 
modernised our core it infrastructure 
delivering annual savings of £10m this year  
we have been building on these foundations 
and undertaking a more wide ranging change 
programme aimed at focusing the business on 
four priority areas our people our practices 
our guests and our profits we are pleased that 
we have been able to grow sales margins and 
eps whilst making progress in each of our 
priority areas
 £75bn 
the eating and drinkingout market  
is worth £75bn a year
 4 
average weekly family spending on 
leisure increased 4 from 2007 to 2011
 45
45 of our revenues are generated in  
london the east and the south east
  the list of brands within each market space is as  
follows upmarket social includes all bar one castle 
nicholson’s and alex special includes miller  carter 
country pubs and browns family includes harvester 
and toby carvery everyday social includes ember inns 
and o’neill’s heartland includes crown carveries oak 
tree pubs and sizzling pubs see the half year results 
2013 for further discussion of these spaces
24
mitchells  butlers plc annual report and accounts 2013 our priorities  
in action
254 
employment costs broadly maintained at 
254 of sales while improving service 
especially at peak times
25
mitchells  butlers plc annual report and accounts 2013
company overview 01 – 05 governance 35 – 64 financial statements 65 – 106 shareholder information 107 – 108 strategic and business review 07 – 34 our priorities  
in action
78 
staff turnover has decreased from  
82 to 78
26
mitchells  butlers plc annual report and accounts 2013 our people we consider the key measure  
of success in relation to our people to be staff 
turnover which has decreased from 82 in 
fy 2012 to 78 in fy 2013 we believe that 
when we successfully engage our people 
they stay with us for longer become more 
efficient provide better service to our guests 
and in turn drive likeforlike sales further 
reductions in staff turnover are therefore  
a key focus going forward we are also 
committed to providing career opportunities 
to young people through our apprenticeship 
schemes with approximately 1600 
employees completing a programme at our 
year end we are particularly proud of our 
browns apprenticeship programme which is 
now in its second year and our management 
development apprenticeship which began 
in country pubs and is now expanding across 
many of our other brands
our practices practices refer to the 
professional and efficient way that we run  
our operations we continue to focus on 
improving our already high scores in the fsa’s 
food hygiene ratings this year we have 
broadly maintained outlet level employment 
costs as a percentage of sales at 254 whilst 
improving service especially at peak times 
our purchasing teams have continued to 
restrict cost increases especially in food 
where overall inflation has been kept to below 
1 over the year compared to market inflation 
of approximately 5 sources ons prestige 
purchasing as a result of these actions 
together with lower preopening and closure 
costs and the residual savings from the 
restructuring in fy 2012 operating expenses 
have marginally decreased and operating 
margins increased by 05 percentage points
our guests we have chosen not to drive 
short term likeforlike sales through 
increased and unfocused promotional 
activity we aim to improve our relative  
likeforlike performance through delivering 
consistently excellent guest experiences 
leading to increased revisits and 
recommendation the key driver of this will 
be the willingness of guests to recommend 
our businesses to their friends and family 
which we measure through our net promoter 
score this year the net promoter score 
across the business has increased by  
4 percentage points to 59 all of our 
restaurants and pubs now have access to  
a live dashboard which lets them see how 
they are scoring against the most critical 
measures that drive guests to revisit and 
recommend our business to their friends as 
well as seeing comments from tripadvisor 
and facebook reviews 
our profits this year adjusted earnings  
per share were up 17 based on higher  
sales improved operating margins and  
lower interest charges as described in  
the financial review the 50 basis point 
operating margin improvement is a good 
result and in line with our previously stated 
aim to protect our operating margins and  
seek incremental opportunities to expand 
them in the medium term
outlook
the transformation programme is designed to 
deliver the key building blocks of sustainable 
growth informed by guest insight we will 
make further progress next year through 
investment into service training and 
development systems improvements and 
improved capital allocation
 
in particular a variety of projects will start to 
benefit the business in our retail support 
centre these include investment into new 
central systems in payroll and finance in our 
restaurants and pubs we are in the early 
stages of a project to replace our till payment 
table management and kitchen management 
systems the new systems will enable the 
delivery of significantly improved guest 
service measured both in quality and speed 
and allow improvements in menus and 
promotional activity to manage our gross 
margins better the new systems are being 
rolled out at pace across the business with 
125 sites live at the year end and 320 sites by 
the end of november
we are cautious about the strength of the 
economic recovery over the next year and 
expect ongoing variation by geography and 
consumer group likeforlike sales were up 
01 in the first eight weeks of the new 
financial year we are pleased with the 
progress we are making on our transformation 
programme and as a result we are well 
placed to deliver sustainable profit growth 
and shareholder value in the future
alistair darby
chief	 executive
 1 7  
increase in adjusted eps
 1

600 
employees completing apprenticeships
  we ask our guests how likely they are to recommend 
our restaurants and pubs to their friends families  
and colleagues scored out of 10 each year we obtain 
around 700000 responses the net promoter score for 
a pub is defined as the percentage of responses where 
we score 9 or 10 out of 10 ‘brand promoters’ less the 
percentage of responses where we score 0 to 6 out of  
10 ‘brand detractors’ responses scoring 7 or 8 
‘passives’ are ignored in the calculation the periodic 
pub scores are averaged to calculate the overall score
27
mitchells  butlers plc annual report and accounts 2013
company overview 01 – 05 governance 35 – 64 financial statements 65 – 106 shareholder information 107 – 108 strategic and business review 07 – 34 corporate social  
responsibility
500 
the number of new jobs we  
have created
£300k
around £300000 donated and raised 
through corporate brand employee  
and guest fundraising activities
4

450 
food waste recycling has generated 
enough electricity to power 4450  
uk households
59 
tonnes of salt removed from our menus
33k 
the number of employees who had their 
say in our annual engagement survey
2013 highlights
introduction
mitchells  butlers believes that social 
responsibility is all about how our practices 
impact on
• our people
• our guests
• the communities in which we operate and
• the environment 
in this section we focus on the highlights  
from 2013 more information and case studies 
can be found in our social responsibility 
review 2013 which can be found at  
mbplccomresponsibility
good food
as the largest ontrade caterer in the country 
the quality of the food we serve is of paramount 
importance to us our guests trust us to serve 
good food that represents good value for 
money which is safely prepared and cooked 
they also trust us to source food that is both 
sustainable and ethical with due regard  
for high standards of both workers and  
animal welfare
what’s in our food
nutrition
we have made excellent progress in analysing 
the nutritional content of our menus this 
information is currently available online for  
core menu items in harvester toby carvery 
and crown carveries 
in all bar one ember inns and a number of  
our heartland pubs meals that contain fewer 
than 700 calories are highlighted on the  
main menus in harvester we print calorific 
values on all our menus including the young 
guests menu 
chefs in any of our businesses will happily 
respond to a guest’s requests to swap for 
example potatoes for a side salad and 
wherever possible serve dressings and  
sauces separately
allergens
we are making good progress in meeting the 
december 2014 deadline when new eu 
legislation comes into effect concerning the 
availability of information about 14 common 
food allergens 
28
mitchells  butlers plc annual report and accounts 2013 salt
we are committed to the public health 
responsibility deal salt pledge for caterers and 
have made good progress towards meeting our 
ambition to reduce the overall salt content of 
the dishes we serve 
first we have been working closely with our 
suppliers to reduce salt levels in 27 products – 
for example bacon – that contribute the highest 
amount of salt to the dishes we serve as a 
result of this work 59 tonnes of salt per annum 
has now been removed from our menus 
secondly a trial has been running in 240 of 
our businesses using a salt blend where a 
percentage of the refined salt is replaced with 
natural minerals in the trial businesses this 
product is being used in our kitchens during the 
cooking process and it also replaces standard 
table salt – should our guests have a personal 
preference to add more salt to their meal
harvester toby carvery and crown carveries 
all display the salt content of core menu items 
online including young guests’ meals
food sourcing
we take into account a number of factors 
when buying food the health and safety of our 
guests the quality the provenance and price 
all of our food suppliers are required to comply 
with the british retail consortium’s technical 
standard which requires their staff to be 
properly trained and supervised and for the 
supplier to meet high standards of food safety
we have made progress in our ambition to 
shorten the supply chain route and our buyers 
now deal with many suppliers directly for 
example we now deal direct with growers  
in the uk for potatoes carrots onions and 
mushrooms removing the wholesaler’s margin 
and delivering fresher products to our kitchens
this year saw the launch of our quality cattle 
scheme a new and exciting initiative offering 
direct contracts with british beef farmers the 
scheme creates a secure quality beef supply 
for mitchells  butlers’ restaurants and pubs 
through a model which guarantees a margin 
and market for the farmer
we also joined forces with a group of farmers 
located in the national parks to rear lamb for 
selected mitchells  butlers brands the 
farmers receive an agreed margin per animal 
and have a guaranteed market for their lambs 
this means we will be able to offer british lamb 
that is fully traceable
mitchells  butlers was crowned foodservice 
operator of the year 2013 at the british turkey 
awards the award was presented for our 
longterm support and year round commitment 
to uk turkey production toby carvery alone 
uses around 68 tonnes of fresh british turkey 
each week
food safety
we have made significant progress in 
increasing the number of our retail businesses 
that achieved a 4 or 5 star food hygiene rating  
we take a zero tolerance approach to any  
of our businesses that achieve a score of 3 or 
below we continue to strive for a score of 5 
in each business and conduct independently 
commissioned audits in all of our businesses at 
least twice per year we have rigorous checks 
and policies in place to ensure we do things 
right and we consult regularly with government 
and local authorities to ensure we maintain the 
highest standards in food safety 
the responsible retailing of alcohol
serving around 410 million drinks each year  
in a responsible way is a fundamental part of  
how we operate our businesses we recently 
updated our alcohol and social responsibility 
policy which highlights best practice in the 
following areas
• promoting responsible drinking
• responsible pricing and promotions
• preventing underage drinking
• working in partnership with local 
authorities government and pubwatch 
• investing in training our teams and
• creating a safe and secure environment  
for our guests and employees
the policy has been communicated to  
all our frontline teams and is a key tool in 
understanding and promoting the high 
standards of responsible retailing we want  
to achieve and maintain
mitchells  butlers donated a substantial  
sum of money to the charity drinkaware last 
financial year our donation assisted the charity 
in their aims to promote responsible drinking 
find innovative ways to challenge the national 
drinking culture help reduce alcohol misuse 
and minimise alcoholrelated harm
people love to work with us
last year saw the creation of our threeyear 
people strategy people love to work with us  
in a growth industry that historically has high 
levels of employee turnover the strategy lays 
out our longterm plan to attract the best 
people and to provide effective training and 
development and a fair reward and recognition 
framework we believe that this strategy  
will result in increased levels of employee 
engagement and in reduced employee 
turnover last financial year our hourly paid 
retail staff turnover was 4 lower meaning 
fewer people left mitchells  butlers than in  
the previous year 
creating jobs 
last year we created 500 new jobs by opening 
new retail sites across the uk
we have made significant progress in 
increasing the number of our retail businesses 
that achieved a 4 or 5 star food hygiene rating
we recently updated our alcohol and  
social responsibility policy which highlights 
best practice
mitchells  butlers was crowned foodservice 
operator of the year 2013 at the british  
turkey awards
harvester prints the calorific value of all dishes 
on its menus and young guests’ menus
29
mitchells  butlers plc annual report and accounts 2013
company overview 01 – 05 governance 35 – 64 financial statements 65 – 106 shareholder information 107 – 108 strategic and business review 07 – 34 corporate social  
responsibility continued
vocational learning
we have around 1600 apprentices on 
vocational learning programmes across the uk 
after working together for a decade mitchells 
 butlers and its training provider partner 
babcock international group were recognised 
at the hospitality guild apprenticeship awards 
in the partnership of the year category the 
partnership is now considered to be a best 
practice model within the hospitality industry 
careers and learning
all of our employees have access to information 
about how they can progress their career with 
us we have a number of learning and 
development programmes in place across 
mitchells  butlers from a chef’s induction to 
executive coaching
listening to our people
we continue to encourage feedback from our 
employees about their working relationship 
with the company their managers and their 
colleagues in july 2013 83 33000 of our 
employees responded to our indepth annual 
employee survey your say our retail team 
member and general manager engagement 
levels remained relatively high and stable and 
our central retail support team engagement 
scores reached an alltime high
fair reward and recognition
we believe in fair rewards and recognising  
our people for their contribution all of our 
employees have access to a wide range  
of company benefits such as sharesave  
free shares employee discount pension  
for eligibleentitled workers dental plans  
and childcare vouchers 
on 1 january 2013 we became fully  
compliant with the workplace pensions  
reform regulations to enrol automatically all 
eligible workers into a qualifying workplace 
pension plan 
in february 2013 we launched a new employee 
benefits platform called pickaperk which offers 
our employees exclusive savings and discounts 
on millions of products and services from 
thousands of retailers last financial year our 
employees took advantage of discounted 
goods to the value of over £350000
there was widespread media coverage earlier 
this year about companies that employ people 
on a ‘zero hours’ contract company policy is to 
state clearly on a contract the minimum hours 
an employee is required to work
diversity 
mitchells  butlers is committed to providing 
equal opportunities for all of our employees 
our diversity policy ensures that every 
employee without exception is treated equally 
and fairly and that all employees are aware of 
their responsibilities 
the policy confirms that there will be no direct 
or indirect discrimination in respect of age 
disability religious belief gender sexual 
orientation race colour marital status  
political belief and nationality or any other 
category defined by law in all aspects of 
employment including recruitment promotion 
opportunities for training pay and benefits
the table below provides a breakdown of the 
gender of directors and employees at the end 
of the financial year
men women
company directors
1
8 1
other senior managers
2
10 3
all employees 19431 20194
notes
1  company directors consists of the company’s board  
as detailed on pages 36 and 37 
2  ‘other senior managers’ is as defined in the companies 
act 2006 strategic report and directors’ report 
regulations 2013 and includes i persons responsible 
for planning directing or controlling the activities of  
the company or a strategically significant part of the 
company other than company directors and ii  
any other directors of undertakings included in the 
consolidated accounts
giving something back
we place a high importance on building strong 
relationships with our guests our neighbours 
and our communities by encouraging our 
employees to support and fundraise for 
charitable and good causes
the good cause fund
this fund exists to help our pubs boost their 
local fundraising last financial year we 
donated over £19000 to a number of 
deserving local charities and groups 
employee donations programme
this fund exists to help individual mitchells  
butlers employees and retired employees 
support a personal charity event or challenge  
of their choice last financial year we made 
donations of around £25000 to a large number 
of local and national causes including cancer 
research uk birmingham children’s hospital 
and air ambulance
1

600 
apprentices on vocational learning 
programmes across the uk
vocational learning a partnership that  
is now considered a model within the 
hospitality industry
pickaperk – our new employee  
benefits platform
listening to our people 83 of our employees 
had their say in our annual engagement survey
30
mitchells  butlers plc annual report and accounts 2013 supporting the prince’s trust
we continue to support the prince’s trust and 
last financial year made a corporate donation  
of £15000 additionally a team of employees 
took part in the prince’s trust million makers 
fundraising initiative where teams compete to 
raise as much money as possible by setting up 
minienterprises the mitchells  butlers team 
team pride raised over £75000 in a variety of 
innovative ways the prince’s trust named 
mitchells  butlers ‘top fundraiser’ at their 
west midlands annual recognition event in 
recognition of team pride’s outstanding 
achievement
bighearted brands pubs and people
last year harvester continued their support  
for makeawish
®
 and raised around £65000 
by donating 10p from every special charity 
sundae sold and holding individual restaurant 
fundraising events this has brought 
harvester’s total donation to makeawish
®
  
so far to a staggering £105000
our restaurants and pubs once again 
supported the royal british legion poppy 
appeal in november 2012 selling thousands  
of poppies to raise funds for thousands of 
serving and exservice people
in march o’neill’s danced its way into 
fundraising by holding its nationwide join the 
jig event to fundraise for worthwhile national 
and local causes their join the jig world 
record attempt was part of the st patrick’s day 
celebrations and raised over £59000 for a 
variety of good causes 
in may 12 brave souls from across mitchells 
 butlers completed tough mudder 2013 
a challenging 12 milelong obstacle course 
designed by the special forces to test  
allaround strength stamina mental grit and 
camaraderie the team raised over £6000 
for birmingham children’s hospital help 
for heroes and latch
in june crown carveries offered armed forces 
personnel and veterans a free carvery meal or 
breakfast for the fifth year running to mark 
armed forces day the brand donated a total 
of 6967 meals
in september the longhorn in walsall  
ember inns was crowned ‘best charitable 
pub’ at the publican’s morning advertiser  
pub of the year awards 
environmental awareness
we continue to manage successfully our 
energy waste and water in a manner which  
is not only cost effective for the business but 
reduces our impact on the environment
carbon emissions
our proactive management of energy 
consumption procurement and carbon 
emissions continues to deliver significant 
£44k 
last financial year we donated over 
£44000 to a number of deserving  
local charities and groups through  
our good cause fund and employee 
donations programme see page 30
benefits to our business during the last year 
our electricity consumption has reduced by 
over 4 through a combination of behavioural 
change programmes and investment in making 
our buildings and equipment more energy 
efficient the harsh winter made managing our 
gas consumption particularly challenging whilst 
keeping our restaurants and pubs warm and 
cosy for our guests this resulted in a small 
increase in our overall emissions by 35  
co
2	 tonnes
led lighting installation
we have successfully completed the 
installation of led lighting in guestfacing areas 
in all of our businesses in total we changed 
237 000 lamps which helped us to make 
considerable savings on energy consumption 
as well as enhancing the ambience in our pubs 
insulation and draught proofing
we have improved insulation and draught 
proofing wherever possible across the estate 
this means more of the energy we use to heat 
our pubs was retained within the building 
which subsequently reduced our energy 
consumption 
energy managers association
in recognition of the energy savings achieved 
by mitchells  butlers our head of energy 
environment and sustainability has been 
elected chairman of the energy managers 
association the ema is an organisation which 
works alongside government and industry to 
promote reductions in energy consumption in 
the uk 
water consumption
we are working with manufacturers and our 
suppliers to reduce the amount of water we 
use we have begun the installation of amr 
automatic meter reading equipment into our 
businesses to allow us to control our water 
consumption to even greater levels 
less is more – waste management
we have established a solid waste disposal 
strategy to reduce reuse and effectively 
recycle the waste generated by our restaurants 
and pubs based on current activity we are 
recycling the equivalent of 13000 tonnes of 
cardboard 19500 tonnes of glass and 3000 
tonnes of aluminium per annum recycling this 
waste would save approximately 200000 trees 
and thousands of tonnes of raw materials used 
in the manufacture of these items our current 
food waste recycling initiative would divert 
around 58000 tonnes of food waste to energy 
from waste facilities generating enough 
electricity to power 4450 uk households and 
save around 700000kg of co
2 every month 
these combined initiatives would divert over 
90000 tonnes of material from being sent  
to landfill
we effectively reduce reuse and recycle the 
waste generated by our restaurants and pubs 
the longhorn celebrates winning ‘best 
charitable pub’ at the publican’s morning 
advertiser pub of the year awards
more information can be found  
online at mbplccomresponsibility 
31
mitchells  butlers plc annual report and accounts 2013
company overview 01 – 05 governance 35 – 64 financial statements 65 – 106 shareholder information 107 – 108 strategic and business review 07 – 34 financial review
fy 2013 contained 52 weeks whereas fy 2012 was a 53 week period total revenues were 
£1895m fy 2012 £1889m after exceptional items and other adjustments including movements 
in the value of the property portfolio statutory profit before tax was £150m fy 2012 £83m  
basic earnings per share were 329p fy 2012 17 1p
the group discloses adjusted profit and earnings per share information that excludes exceptional 
items and other adjustments to allow a better understanding of the underlying trading of the 
group to provide a meaningful comparative for yearonyear performance all yearonyear 
growth rates relating to the income statement are measured against the restated 52 week  
fy 2012 income statement unless otherwise stated 
operating margins
adjusted operating margins across the year 
improved by 05 ppts margins have been 
positively impacted by movements in the 
volumespend mix particularly in food  
where gross margins have benefited from  
a combination of higher spend per head 
significant purchasing improvements and  
menu management the full year impact of 
restructuring savings delivered in fy 2012  
and lower preopening and closure costs from 
new restaurants and pubs and conversions 
these improvements were partially offset by 
increased duty on machine income higher 
business rates charges and a continuing 
investment into service and amenity as a 
result adjusted operating profit was £312m 
51 higher than last year
internal rent
a regime of internal rents is in place to enable 
greater internal transparency around the 
performance of freehold and leasehold 
properties and external transparency 
concerning the performance of the operating 
and property functions the operating 
performance is monitored on a regular basis 
through a system of profit reviews through  
for comparative purposes the adjusted 52 week and 53 week results for fy 2012 are shown in the 
table below
fy 2013 
£m
52 weeks
fy	2012 	
£m
52	weeks
variance	

52	weeks
fy	2012 	
£m
53	weeks
revenue 1895 1855 22 1889
adjusted ebitda 422 407 37 415
adjusted operating profit 312 297 51 304
adjusted operating margin 165 160 05 ppts 161
adjusted profit before tax 184 162 136 166
adjusted eps 349p 298p 171 305p
at the end of the year the business comprised 
1589 managed sites and 60 leased or 
franchised sites in the uk and germany
revenue
the group’s total revenues of £1895m  
were 22 higher than fy 2012 driven by food 
sales growth of 33 with drink sales growth  
of 10 food sales now account for more  
than half of total sales reflecting the business’s 
strategy to generate longterm growth from  
this market
likeforlike sales growth of 04 included 
likeforlike food sales growth of 08 and  
a likeforlike drink sales decline of 02  
likeforlike sales were driven by increases in 
price and spend with volumes lower in both 
categories food sales growth was weighted 
towards the first half of the year with a number 
of the year’s key calendar events on which 
trading continues to be strong falling into  
the first half the second half of the year  
saw stronger drink sales growth reflecting the 
impact of good weather seen throughout the 
summer and fewer specific special occasions
mitchells  butlers plc annual report and accounts 2013
32 all levels of the group estate management 
is primarily monitored through the portfolio 
development committee
fy	2013 	
operating
£m
property
£m
total
£m
revenue 1895 – 1895
ebitdar 471 – 471
external rent 49 – 49
internal rent 192 192 –
ebitda pre 
exceptionals 230 192 422
ebitda  121 – 223
interest
adjusted net finance costs of £128m were  
£7m lower than the prior year measured on a 
52 week basis principally due to a £6m prior 
year accrual in relation to backdated interest on 
outstanding tax items from september 2013  
a stepup margin ranging from 035 to 128 
was applied to four floating rate securitised 
notes with a combined principal value of 
£655m this increases annual interest costs  
by £4m there are no further stepups in the 
securitisation arrangements
after net finance costs adjusted profit before 
tax was £184m 136 higher than last year
taxation
the tax charge of £15m in the year  
fy 2012 53 weeks £13m represents an 
effective rate of 100 fy 2012 157  
this includes an £18m credit to deferred tax 
arising on the reduction in the main rate of 
corporation tax to 20 from april 2015 
excluding this item the effective rate of tax  
was 22
exceptional items and other adjustments
exceptional items and other adjustments 
consist of three items a £5m net pensions 
finance charge a £29m charge relating to the 
net movement in the property portfolio and  
an £18m credit to deferred tax reflecting the 
reduction in the main rate of corporation tax  
to 20 from april 2015
earnings per share
adjusted earnings per share were 349p  
17 1 higher than last year after the 
exceptional items described above  
basic earnings per share were 329p  
fy 2012 53 weeks 17 1p 
cash flow and net debt
fy 2013 
£m
52 weeks
fy	2012 	
£m
53	weeks
ebitda before  
exceptional items 422 415
working capital 
movement 
noncash items 11 28
pension deficit 
contributions 40 40
cash flow from 
operations before 
exceptional items 371 347
maintenance and 
infrastructure capex 100 92
interest 126 129
tax and other 32 25
free cash flow before 
exceptional items 113 101
expansionary capex 28 55
disposals 1 3
operating exceptional 2 17
net cash flow 84 32
mandatory bond 
amortisation 55 52
net cash flow after 
bond amortisation 29 20
ebitda of £422m was generated by the 
business in the year the net working capital 
outflow of £11m includes a £15m payment  
on account to hmrc relating to unsettled  
tax on a previous transaction pension deficit 
contributions of £40m were made in line  
with the deficit recovery plan agreed with the 
trustees following the 2010 triennial review  
of the schemes after maintenance capital 
interest and tax £113m of free cash was 
generated by the business 
there was a net cash inflow after bond 
amortisation of £29m in fy 2013 compared  
to an outflow of £20m in fy 2012
net debt was £1759m representing 42 times 
ebitda fy 2012 45 times 52 week ebitda 
net debt within the securitisation was £2023m 
and net cash held outside the securitisation 
was £264m 
£312m 
adjusted operating profit was £312m  
51 higher than last year
£128m 
total capital expenditure was £128m
349p 
adjusted earnings per share were 
349p 171 higher than last year
33
mitchells  butlers plc annual report and accounts 2013
company overview 01 – 05 governance 35 – 64 financial statements 65 – 106 shareholder information 107 – 108 strategic and business review 07 – 34 financial review
continued
capital expenditure
total capital expenditure was £128m 
comprising £88m fy 2012 £83m spent  
on maintaining and enhancing the high level  
of amenity in the group’s restaurants and  
pubs £12m on infrastructure projects  
fy 2012 £9m and £28m on new site  
openings fy 2012 £55m 
 
infrastructure projects include a significant it 
project which will see all restaurant and pub  
till systems upgraded and the introduction  
of kitchen management systems in our food  
led businesses by the spring of 2015 the 
project is now in full roll out across the estate  
at an expected cost of £33m of which 
approximately two thirds will be capital
other infrastructure projects relate to 
improving energy efficiency upgrading our 
finance system and replacing our central  
hr system 
blended ebitda returns on expansionary 
capital invested across our brand portfolio 
remain at 17 given the varying nature of 
freehold acquisitions leasehold acquisitions 
and conversions the business reviews returns 
by category
fy 2013
investments
fy	2014
no	of	sites
fy	2011	– 	
2013
ebitda
	roi
freehold  
acquisitions £11m 4 13
leasehold  
acquisitions £11m 12 18
conversions £2m 6 16
expansionary 
investment £24m 22 17
  fy 2013 investments comprise expansionary capital 
specifically invested in respect of fy 2013 openings  
and conversions
property
a red book valuation of the freehold and  
long leasehold estate has been completed in 
conjunction with the independent property 
valuers cbre in addition the group has 
conducted an impairment review on short 
leasehold and unlicensed properties the 
overall portfolio value has increased by  
£31m reflecting a £29m charge in the income 
statement and a £60m increase in the 
revaluation reserve
pensions
recent guidance has been published from the 
financial reporting review panel concerning 
the recognition and measurement of pension 
liabilities it specifically considered the 
treatment of a schedule of contributions in 
relation to minimum funding requirements 
under ifric 14 as a result the group now 
includes the schedule of contributions within 
the calculation of the overall pension liability 
recorded on the balance sheet and has 
restated comparative amounts from the last 
two financial years there is no change to  
profit before tax and no cash impact as 
calculated on this basis the pretax pensions 
deficit as at 28 september 2013 was £248m
from fy 2014 the group will adopt ias 19 
revised employee benefits as a result 
annual administration costs of the schemes of 
approximately £2m will now be charged within 
group operating profit rather than netted 
against the pensions finance charge
discussions continue between the group  
and the pension trustees regarding the 
measurement and funding of the triennial 
valuation as at 31 march 2013 pending the 
conclusion of this process the group continues 
to make contributions totalling £40m per 
annum into the schemes
dividend
the board is mindful of the attraction of the 
resumption of dividend payments and will 
continue to monitor anticipated net cash flow 
generation before taking a decision on timing 
and quantum
tim jones
finance	 director
£31m 
the overall portfolio value has increased  
by £31m
42times 
net debt to ebitda
34
mitchells  butlers plc annual report and accounts 2013 governance
in this section
36  board of directors
38  dir ectors’ r eport
41  dir ectors’ 
responsibilities 
statement
42  corpor ate go vernance 
statement
47  audit committee report
50  report on directors’ 
remuneration
35
mitchells  butlers plc annual report and accounts 2013
company overview 01 – 05 strategic and business review 07 – 34 financial statements 65 – 106 shareholder information 107 – 108 governance 35 – 64 board of directors
1 bob ivell
4 stewart gilliland
7 ron robson
2 alistair darby
5 eddie irwin
8 colin rutherford
3 tim jones
6 douglas mcmahon
9 imelda walsh
36
mitchells  butlers plc annual report and accounts 2013 1 bob ivell aged 61
nonexecutive chairman
bc
appointed as interim nonexecutive chairman in july 2011 bob became 
executive chairman in october 2011 and reverted to nonexecutive 
chairman in november 2012 following the appointment of alistair darby 
he has over 30 years of extensive food and beverage experience with 
a particular focus on foodled managed restaurants and pubs he is 
currently senior independent director of britvic plc and chairman of 
david lloyd leisure limited he was previously a main board director of 
sn plc in the role of chairman and managing director of the scottish 
 newcastle retail division he has also been chairman of regent inns 
chairman of park resorts chairman of next generation clubs 
managing director of beefeater restaurants one of whitbread’s 
pub restaurant brands and a director of the restaurant group 
bob is chair of the nomination committee
2 alistair darby aged 47
chief executive
d
alistair was appointed chief executive in october 2012 he has more 
than 20 years’ experience working in some of the uk’s best known 
brands in the pub drinks and consumer sectors including roles with 
mars confectionery wolverhampton and dudley breweries and  
united distillers he joined marston’s plc in 1997 where he held senior 
operational and strategic roles becoming a board member in 2003 and 
chief operating officer in 2011 alistair is a director of cask marque  
an independent nonprofit making organisation set up to improve 
the quality of cask ale in pubs by way of an accreditation scheme 
3 tim jones aged 50
finance director
d
tim was appointed finance director in october 2010 prior to joining the 
company he held the position of group finance director for interserve 
plc a support services group previously he was director of financial 
operations at novar and held senior financial roles both in the uk and 
overseas in the logistics company exel plc tim is a member of the 
institute of chartered accountants in england and wales and obtained 
an ma in economics at cambridge university
4 stewart gilliland aged 56 
independent nonexecutive director
abc
appointed as an independent nonexecutive director in may 2013 
stewart was chief executive officer of muller dairy uk limited until 
2010 and prior to that held senior management positions in inbev sa 
interbrew uk limited and whitbread plc he is currently a non
executive director of booker group plc sutton and east surrey water 
co tulip group limited nature’s way foods limited cc group 
and vianet plc
5 eddie irwin aged 54
nonexecutive director
abc
appointed as a nonexecutive director in march 2012 eddie is a nominee 
of elpida limited a significant shareholder in mitchells  butlers eddie is 
finance director of coolmore a leading thoroughbred bloodstock breeder 
with operations in ireland the usa and australia he is a fellow of both 
the association of chartered certified accountants and the institute of 
chartered secretaries and administrators
6 douglas mcmahon aged 48
nonexecutive director
appointed a nonexecutive director in october 2010 douglas is senior 
managing director of tavistock group and is a nominated shareholder 
representative of piedmont inc he has 20 years of marketing experience 
previously serving as chairman and ceo of publicis new york general 
manager of j walter thompson new york and chief marketing officer 
at consumer news and business channel cnbc
7 ron robson aged 50
deputy chairman
abc
appointed as deputy chairman in july 2011 ron is a managing director 
of tavistock group and is a nominated shareholder representative of 
piedmont inc he was previously chief financial officer of tamar  
capital partners and group finance director of kenmore both property 
investment and management groups from 2005 to 2008 he was group 
finance director of the belhaven group plc a listed pub retailing 
brewing and drink distribution group prior to that he held a number 
of senior finance roles including group finance director of a listed 
shipping and logistics group and trained as a chartered accountant 
with arthur andersen
8 colin rutherford aged 54
independent nonexecutive director
abc
appointed as an independent nonexecutive director in april 2013 
colin is currently chairman of brookgate limited european care group 
limited and teachers media international limited he was formerly 
executive chairman of mam funds plc and euro sales finance plc 
amongst various other public and private companies in the uk and 
overseas colin is a member of the institute of chartered accountants 
of scotland and has both directly relevant and corporate finance 
experience in the leisure and hospitality industries colin is chair 
of the audit committee
9 imelda walsh aged 49
independent nonexecutive director
abc
appointed as an independent nonexecutive director in april 2013 
imelda is a nonexecutive director and chair of the remuneration 
committee of both william hill plc and mothercare plc she was a 
nonexecutive director and chair of the remuneration committee of 
sainsbury’s bank plc from 2006 to 2010 she has held senior executive 
roles at j sainsbury plc where she was group hr director from march 
2004 to july 2010 barclays bank plc and cocacola  schweppes 
beverages limited she is also a director of the mentoring foundation 
and is a trustee of charity projects limited comic relief and now 
pensions limited imelda is chair of the remuneration committee
key
a member of the audit committee
b member of the remuneration committee
c member of the nomination committee
d member of the executive committee
37
mitchells  butlers plc annual report and accounts 2013
company overview 01 – 05 strategic and business review 07 – 34 governance 35 – 64 financial statements 65 – 106 shareholder information 107 – 108 directors’ report
the board’s responsibilities in respect of the company include
• determining the overall business and commercial strategy
• identifying the longterm objectives
• reviewing the annual operating budget and financial plans
• determining the basis of allocation of capital
• considering all matters relating to a major change of policy
  for our latest financial information go to wwwmbplccominvestors 
the directors present their report and the audited financial statements 
for the year ended 28 september 2013 the business review of the 
company and its subsidiaries is given on pages 7 to 34 which together 
with the corporate governance statement and audit committee report 
are incorporated by reference into this report and accordingly should  
be read as part of this report
details of the group’s policy on addressing risks are given on pages  
18 to 20 and 45 to 46 and details about financial instruments 
are shown in note 19 to the financial statements these sections 
include information about trends and factors likely to affect the future 
development and performance of the group’s businesses the company 
undertakes no obligation to update forwardlooking statements 
key performance indicators for the group’s businesses are set out on  
page 21 
this report has been prepared under current legislation and guidance in 
force at the yearend date in addition the material contained on pages  
7 to 34 reflect the directors’ understanding of the new requirement to 
provide a strategic report which will apply to the company in next  
year’s report
this report has been prepared for and only for the members of the 
company as a body and no other persons the company its directors 
employees agents or advisers do not accept or assume responsibility to 
any other person to whom this document is shown or into whose hands it 
may come and any such responsibility or liability is expressly disclaimed
principal activities
mitchells  butlers is the uk’s largest operator of managed restaurants 
and pubs and as at 28 september 2013 had an estate of 1649 sites 
including 60 leased and franchised sites and 40 restaurants in germany
share capital
the company’s issued ordinary share capital as at 28 september 2013 
comprised a single class of ordinary shares of which 411011098 shares 
were in issue and listed on the london stock exchange 29 september 2012 
409923805 shares of the issued share capital no shares were held in 
treasury and the company’s employee share trusts held 2114097 shares 
details of movements in the issued share capital can be found in note 22 
to the financial statements on page 96 each share carries the right to 
one vote at general meetings of the company participants in the share 
incentive plan ‘sip’ may complete a form of instruction which is used by 
the sip trustee as the basis for voting on their behalf all issued shares are 
fully paid up and carry no additional obligations or special rights there 
are no restrictions on transfers of shares in the company or on the 
exercise of voting rights attached to them other than those which may 
from time to time be applicable under existing laws and regulations
 
during the year shares with a nominal value of £92873 were allotted 
under allemployee schemes as permitted under section 549 companies  
act 2006 no securities were issued in connection with a rights issue 
during the year 
the company is not aware of any agreements between shareholders 
that restrict the transfer of shares or voting rights attached to the shares
interests of the directors and their immediate families in the issued share 
capital of the company as at the year end are on page 62 of the report 
on directors’ remuneration
dividends
no final dividend will be paid in respect of the year ended  
28 september 2013 2012 nil no interim dividend was paid  
during the year 2012 nil
interests in voting rights
as at the date of this report the company was aware of the following 
significant holdings of voting rights 3 or more in its shares
shareholder ordinary shares
 of 
share capital
piedmont inc 109970613 2673 direct holding
elpida group limited 92090885 2239 direct holding
smoothfield holding 
limited 16205101 394 direct holding
   using the total voting rights figure announced to the london stock exchange for  
31 october 2013 of 411356223 shares
directors
details of the directors as at 25 november 2013 and their biographies 
are shown on pages 36 and 37  the directors at 28 september 2013 and 
their interests in shares are shown on page 62 changes to the board of 
directors during the year are set out in full in the corporate governance 
statement on page 43 there were no changes to the board of directors 
subsequent to the year end up to the date of this report 
the powers of the company’s directors are set out in the company’s 
articles of association in accordance with the best practice guidance of 
the uk corporate governance code and with the company’s articles 
of association the directors will retire at the agm and offer themselves 
for reelection
under a deed of appointment between piedmont inc and the company 
piedmont inc has the right to appoint two shareholder directors to 
the board whilst it owns 22 or more of the issued share capital of the 
company and the right to appoint one shareholder director to the board 
whilst it owns more than 16 of the company but less than 22 in the 
event that piedmont inc owns less than 16 of the company any such 
shareholder directors would be required to resign immediately
directors’ indemnity
as permitted by the articles of association each of the directors has  
the benefit of an indemnity which is a qualifying thirdparty indemnity 
as defined by section 234 of the companies act 2006 the indemnity 
was in force throughout the respective period of directorship during the 
last financial year and is currently in force the company also purchased 
and maintained throughout the financial year directors’ and officers’ 
liability insurance in respect of itself and its directors no indemnity is 
provided for the company’s auditor 
conflicts of interest
the company’s articles of association permit the board to consider  
and if it sees fit authorise situations where a director has an interest  
that conflicts or may possibly conflict with the interests of the  
company ‘situational conflicts’ the board has a formal system in  
place for directors to declare situational conflicts to be considered 
for authorisation by those directors who have no interest in the matter  
being considered in deciding whether to authorise a situational  
conflict the nonconflicted directors are required to act in the way  
they consider would be most likely to promote the success of the 
company for the benefit of all shareholders and they may impose  
limits or conditions when giving authorisation or subsequently if they 
think this is appropriate the board believes that the systems it has 
in place for reporting and considering situational conflicts continue 
to operate effectively
38
mitchells  butlers plc annual report and accounts 2013 related party transactions
internal controls are in place to ensure that any related party transactions 
involving directors or their connected persons are carried out on an 
arm’s length basis and are properly recorded there were no related 
party transactions during the year nor at the date of this report
essential contracts or arrangements
the group has a number of contractual agreements with suppliers  
in support of its business activities whilst the loss of some of these 
arrangements may cause temporary disruption none are individually 
considered to be essential to the business of mitchells  butlers 
change of control provisions
there are no significant agreements which contain provisions entitling 
other parties to exercise termination or other rights in the event of a 
change of control of the company 
there are no provisions in the directors’ or employees’ service agreements 
providing for compensation for loss of office or employment occurring 
because of a takeover 
the trustee of the mitchells  butlers share incentive plan will invite 
participants on whose behalf it holds shares to direct it how to vote in 
respect of those shares and if there is an offer for the shares or other 
transaction which would lead to a change of control of the company 
participants may direct it to accept the offer or agree to the transaction 
the trustee of the mitchells  butlers employee benefit trust may 
having consulted with the company vote or abstain from voting any 
shares it holds or accept or reject an offer relating to shares in any way  
it sees fit and it may take all or any of the following matters into account 
the longterm interests of beneficiaries the nonfinancial interests  
of beneficiaries the interests of beneficiaries in their capacity as 
employees or former employees the interests of future beneficiaries  
and considerations of a local moral ethical environmental or  
social nature
the rules of certain of the company’s share plans include provisions 
which apply in the event of a takeover or reconstruction as set  
out below
provisions which apply in the event of a takeover  
or reconstruction
share plan provision in the event of a takeover
performance restricted  
share plan and 2013 
performance restricted  
share plan
awards vest pro rata to performance and 
time elapsed and lapse six months later
short term deferred  
incentive plan and 2013  
short term deferred  
incentive plan
bonus shares may be released or 
exchanged for shares in the new 
controlling company
executive share option plan options may be exercised within six 
months of a change of control
sharesave plan and 2013  
sharesave plan
options may be exercised within six 
months of a change of control
share incentive plan and 
2013 share incentive plan
free shares may be released or exchanged 
for shares in the new controlling company
employment policies
the group employed an average of 41325 people in 2013 2012 41178
through its diversity and equal opportunities policy the company aims 
to provide an environment which enables people with disabilities to 
perform better by reviewing any reasonable adjustments that could be 
made to the duties hours worked or working environment in respect 
of a disabled employee or potential employee through the group’s 
online recruitment system candidates can inform the group direct 
about their disability so that the group can make such reasonable 
adjustments enabling them to perform to the best of their ability 
on assessment events
should any employee of the group become disabled during their 
time with it the group actively makes reasonable adjustments in 
accordance with current legislation including arranging appropriate 
training to keep the employee with the group steps are taken which 
are designed both to increase the effectiveness of employees with 
disabilities and to ensure they are in a suitable role a more detailed 
account can be found in the separately published social responsibility 
review 2013 at wwwmbplccomresponsibility
employee engagement
mitchells  butlers engages with its employees continuously and in a 
number of ways to suit their different working patterns this includes
• a dedicated intranet for the retail support team
• a dedicated portal ‘ourhub’ for retail employees
• email news alerts
• focus groups
• weekly bulletins – specifically targeted at retail general managers 
and mobile workers
• employee social media groups
• line manager briefings
• an annual conference and awards for our operators 
• a monthly magazine poster frontline news for the retail estate and
• communications forums and roadshows held by function or brand 
across the company
details of the financial and economic factors affecting the performance 
of the company are shared with all employees at the appropriate time 
using the methods listed above 
we provide opportunities for employees to give their feedback to the 
company in a number of ways from team or shift meetings in restaurants 
and pubs discussion groups with executive committee members pulse 
surveys for all employees and the mitchells  butlers annual business 
forum business forum representatives collect questions from employees 
across the company and put them to a special executive committee 
the questions and answers are published in frontline news and online
what’s the big idea is a companywide initiative where employees  
are encouraged to submit their ideas for improving the business 
environmentally financially or otherwise via our dedicated  
employee website
our retail teams participate in elearning covering food health and  
fire safety challenge 21 and intermediate food hygiene we also  
have a visual training library which houses short training videos to 
share best practice tips health and safety kitchen and cooking skills
mitchells  butlers is keen to encourage greater employee involvement 
in the group’s performance through share ownership it operates four 
hmrc approved allemployee plans which are the sharesave plan 
the 2013 sharesave plan the share incentive plan and the 2013 share 
incentive plan which include partnership shares the company also 
operates five other plans on a selective basis which are the performance 
restricted share plan the 2013 performance restricted share plan the 
short term deferred incentive plan the 2013 short term deferred 
incentive plan and the executive share option plan further details on 
the plans are set out in the report on directors’ remuneration both the 
allemployee share plans the performance restricted share plan and the 
short term deferred incentive plan were renewed at the agm in 2013 
so grants of awards under those plans can continue to be made see the 
report on directors’ remuneration for further information 
during the year the company has remained within its headroom limits 
for the issue of new shares for share plans as set out in the rules of the 
above plans the company uses an employee benefit trust to acquire 
shares in the market when appropriate to satisfy share awards in order  
to manage headroom under the plan rules a total of 1250000 shares 
in the company were purchased by the employee benefit trust during 
the 201213 financial year
39
mitchells  butlers plc annual report and accounts 2013
company overview 01 – 05 strategic and business review 07 – 34 governance 35 – 64 financial statements 65 – 106 shareholder information 107 – 108 directors’ report
continued
policy on payment of suppliers
mitchells  butlers plc is a holding company and has no trade creditors
the policy of its principal operating subsidiaries is to agree specific terms 
with major suppliers and to abide by those terms subject to satisfactory 
performance by the supplier amounts owed to other suppliers are 
settled in the month following that in which the subsidiaries receive a 
valid invoice the average number of days the group takes to pay an 
invoice is 31 days 2012 30 days
charitable donations and charitable activity
the company continues to support community initiatives and charitable 
causes full details of which are given on pages 30 and 31 in the 
corporate social responsibility section of this annual report
political donations
the company made no political donations during the year and intends  
to maintain its policy of not making such payments it will however  
as a precautionary measure to avoid inadvertent breach of the law  
seek shareholder authority at its 2014 agm to make limited donations  
or incur limited political expenditure although it has no intention of  
using the authority
funding and liquidity risk
in order to ensure that the group’s longterm funding strategy is aligned 
with its strategic objectives the treasury committee regularly assesses 
the maturity profile of the group’s debt alongside the prevailing financial 
projections and threeyear plan this enables it to ensure that funding 
levels are appropriate to support the group’s plans
the current funding arrangements of the group consist primarily of  
the securitised notes issued by mitchells  butlers finance plc and 
associated liquidity facility further information regarding these 
arrangements is included in note 18 to the financial statements on 
page 91 the terms of the securitisation contain a number of financial and 
operational covenants compliance with these covenants is monitored 
by group treasury
the group prepares a rolling daily cash forecast covering a sixweek 
period and an annual cash forecast by period these forecasts are 
reviewed on a daily basis and used to manage the investment and 
borrowing requirements of the group a combination of cash pooling 
and zero balancing agreements are in place to ensure the optimum 
liquidity position is maintained committed facilities outside of the 
securitisation are sized to ensure that the group can meet its medium
term anticipated cash flow requirements
going concern
the financial statements which appear on pages 68 to 106 have been 
prepared on a going concern basis the directors have reviewed the 
group’s objectives policies and processes for managing its capital 
its financial risk management objectives its financial instruments and 
hedging activities and its exposures to credit risk and liquidity risk the 
group’s financing is based on securitised debt and within this context 
a robust review has been undertaken of projected performance against 
the securitisation covenants as a result of this review the directors have 
a reasonable expectation that the group has adequate resources to 
continue in operational existence for the foreseeable future see note 1 
to the financial statements on page 73
annual general meeting
the notice convening the annual general meeting is contained in a 
circular sent to shareholders with this report and includes full details 
of the resolutions proposed
auditor
deloitte llp has expressed its willingness to continue in office as auditor 
of the company and its reappointment will be put to shareholders at  
the agm
postbalance sheet events
there are no postbalance sheet events to report
disclosure of information to auditor
having made the requisite enquiries so far as the directors are aware 
there is no relevant audit information as defined by section 4183 of the 
companies act 2006 of which the company’s auditor is unaware and 
each director has taken all steps that ought to have been taken to make 
themselves aware of any relevant audit information and to establish that 
the company’s auditor is aware of that information
by order of the board
greg mcmahon
company secretary and general counsel
25 november 2013
40
mitchells  butlers plc annual report and accounts 2013 directors’ responsibilities statement
the directors are responsible for preparing the annual report and the 
financial statements in accordance with applicable law and regulations
company law requires the directors to prepare financial statements for 
each financial year under that law the directors are required to prepare 
the group financial statements in accordance with international financial 
reporting standards ifrss as adopted by the european union and 
article 4 of the ias regulation and have also chosen to prepare the 
company financial statements under ifrss as adopted by the eu under 
company law the directors must not approve the accounts unless they 
are satisfied that they give a true and fair view of the state of affairs of 
the company and of the profit or loss of the company for that period  
in preparing each of the group and company financial statements 
international accounting standard 1 requires that directors
• properly select and apply accounting policies
• present information including accounting policies in a manner  
that provides relevant reliable comparable and understandable 
information 
• provide additional disclosures when compliance with the specific 
requirements in ifrss are insufficient to enable users to 
understand the impact of particular transactions other events  
and conditions on the entity’s financial position and financial 
performance and
• make an assessment of the company’s ability to continue as a  
going concern
the directors are responsible for keeping adequate accounting records 
that are sufficient to show and explain the company’s transactions and 
disclose with reasonable accuracy at any time the financial position of  
the company and enable them to ensure that the financial statements 
comply with the companies act 2006 they are also responsible for 
safeguarding the assets of the company and hence for taking reasonable 
steps for the prevention and detection of fraud and other irregularities
the directors are responsible for the maintenance and integrity of the 
corporate and financial information included on the company’s website 
legislation in the united kingdom governing the preparation and 
dissemination of financial statements may differ from legislation in  
other jurisdictions
responsibility statement 
the directors confirm that to the best of our knowledge
• the financial statements prepared in accordance with international 
financial reporting standards give a true and fair view of the assets 
liabilities financial position and profit or loss of the company and 
the undertakings included in the consolidation taken as a whole
• the strategic and business review includes a fair review of the 
development and performance of the business and the position of 
the company and the undertakings included in the consolidation 
taken as a whole together with a description of the principal risks 
and uncertainties that they face and
• the annual report and financial statements taken as a whole 
are fair balanced and understandable and provide the information 
necessary for shareholders to assess the company’s performance 
business model and strategy
signed by
tim jones
finance director
25 november 2013
41
mitchells  butlers plc annual report and accounts 2013
company overview 01 – 05 strategic and business review 07 – 34 governance 35 – 64 financial statements 65 – 106 shareholder information 107 – 108 corporate governance statement
corporate governance statement
the board is responsible for ensuring compliance with the 2010 uk 
corporate governance code the ‘code’ which is issued by the 
financial reporting council and which is available at wwwfrcorguk 
this includes reviewing internal controls ensuring that there is an 
appropriate balance of skills and experience represented on  
the board and maintaining relations with shareholders
a new edition of the code was published in september 2012 and 
applies to reporting periods beginning on or after 1 october 2012 as 
our 2013 reporting period began before this date we are continuing to 
report against the june 2010 edition of the code although the board 
has adopted some of the new provisions in the revised code earlier 
than required 
for our latest financial information go to wwwmbplccominvestors 
it gives me great pleasure to take this opportunity to update you on our 
progress in corporate governance over the past year we have made 
significant improvements during the year both to our board structure 
and our governance procedures and i am delighted to be able to report 
that many of the compliance deficiencies that we highlighted in our 
2012 annual report no longer apply we have appointed a chief 
executive and three independent nonexecutive directors in order  
to achieve a more balanced board and we have updated the terms 
of reference of all our board committees which are now in line 
with current best practice full details are set out below
bob ivell
chairman
the board recognises the importance of good corporate governance in 
creating a sustainable successful and profitable business and details are 
set out in this statement of the company’s corporate governance 
procedures and application of the principles of the code
explanation for noncompliance with parts of the code
for part of the year the board was not fully constituted in compliance 
with the code which impacted governance in the form of board and 
committee appointments and membership and the frequency of 
committee meetings it meant that for part of the year as described 
more fully below all committee functions were undertaken by the 
full board
following the appointment of three independent nonexecutive directors 
in april and may 2013 committee members were appointed with effect 
from 11 july 2013 in order to move more in line with code requirements 
new terms of reference for the remuneration audit and nomination 
committees and a schedule of matters reserved for the board were 
adopted based on the model terms of reference and schedule of 
matters reserved for the board issued by the institute of chartered 
secretaries  administrators ‘icsa’ in june and july 2013 respectively 
full details can be found in the company’s corporate governance 
compliance statement which is available from the company secretary
the vast majority of the noncompliance issues highlighted in our 2012 
annual report were resolved during the year ended 28 september 2013 
as set out below there are some areas where the company does not 
fully comply and we have set out our reasons below as permitted under 
the ‘comply or explain’ provisions of the code
a11 matters reserved for the board
for part of the year while the board understood which matters were 
reserved as matters for the board there was no formal schedule setting 
out these matters on 24 september 2013 the board formally adopted a 
schedule of matters reserved for the board based on the model issued 
by icsa in july 2013 but tailored to the individual needs of the company 
and the company is now compliant with this provision
a21 division of responsibilities
for a few days at the beginning of the year the board did not comply 
with the requirement of the code for the chairman and chief executive 
roles to be assumed by different individuals alistair darby was appointed 
as chief executive on 8 october 2012 and bob ivell resumed his role as 
nonexecutive chairman on 12 november 2012 following completion 
of an induction period by mr darby and the board has since then 
been fully compliant with provision a21 of the code
a41 senior independent director and a42 and b63 
chairman’s performance appraisal
for part of the year there were no independent nonexecutive  
directors on the board of the company and as a result the role of  
senior independent director remained vacant and the company  
did not comply with provision a41 of the code the board has only 
recently appointed further nonexecutive directors and the nomination 
committee is still considering the most appropriate candidate to  
be identified as senior independent director in the meantime all  
directors will be available to shareholders via the company secretary  
to address any questions raised
in light of the fact that the company has no senior independent director 
and has only relatively recently appointed independent nonexecutive 
directors an annual appraisal of the chairman’s performance was not 
conducted in the financial year annual reviews of the chairman’s 
performance will be conducted as required by the code and this has 
been specifically included in the board’s forward timetable for the 
201314 financial year
b1 including b12 composition of the board and b21 
c31 d21 and d22 constitution of committees
for part of the year there were no independent nonexecutive  
directors on the board three independent nonexecutive directors 
were appointed during the year meaning that the board moved 
significantly further towards compliance with the provisions of the code 
relating to board composition while the board does not comply fully 
with the requirement for at least half of its members to be independent 
it recognises and values the presence of representatives of its major 
shareholders on the board and welcomes the interest shown by them 
in their investment the board will continue to work closely with the 
major shareholders to further the interests of the company
the absence of independent nonexecutive directors on the board for 
part of the year meant that the nomination committee audit committee 
and remuneration committee were not constituted in accordance with 
and could not meet conduct business or undertake the actions provided 
for in the code and during such time all committee matters were 
handled by the full board following the appointment of the three  
new independent nonexecutive directors in april and may 2013 the 
company now has fully functioning committees as required by the code 
the committees are not fully compliant in that they include the presence 
of representatives of major shareholders nevertheless the board values 
their contribution does not consider this to be an impediment to good 
governance and looks forward to working with them on governance 
matters in the future
42
mitchells  butlers plc annual report and accounts 2013 b62 evaluation
during the year three new independent nonexecutive directors were 
appointed to the board those newly appointed directors have now 
completed their induction facilitated by the company secretary in july 
2013 the board confirmed the composition of its audit remuneration 
and nomination committees the board and each of those committees 
have now agreed their respective terms of reference and the board has 
adopted a series of corporate governance procedures including a list 
of matters reserved by the board for its own decision
in light of the fact that the newly constituted board has only recently 
settled into a regular pattern of activity the board feels that a detailed 
evaluation at this stage would be premature however as the board  
and its committees establish a pattern of activity the nomination 
committee chaired by the nonexecutive chairman in conjunction with 
the company secretary will review during the 201314 financial year the 
most appropriate fashion for conducting a board evaluation it is likely 
that any externally facilitated evaluation will not be held until at least the 
fy 201415 financial year but this is still being kept under review
the information required by disclosure and transparency rule ‘dtr’ 
7 1 is set out in the audit committee report on pages 47 to 49 the 
information required by dtr 7 2 is set out in this corporate governance 
statement other than that required under dtr 7 26 which is set out in 
the directors’ report on pages 38 to 40 
board composition
a table listing all changes to the board during the year is in the table 
opposite on 8 october 2012 alistair darby was appointed as  
chief executive on 22 april 2013 colin rutherford and imelda  
walsh were appointed as independent nonexecutive directors  
and on 23 may 2013 stewart gilliland was appointed as a further 
independent nonexecutive director
the board
the board is responsible to shareholders for the strategic direction 
development and control of the group it approves strategic plans and 
annual capital and revenue budgets it reviews significant investment 
proposals and the performance of past investments and maintains  
an overview and control of the group’s operating and financial 
performance it monitors the group’s overall system of internal controls 
governance and compliance and ensures that the necessary financial and 
human resources are in place for the company to meet its objectives 
the executive directors may be permitted to accept one external  
nonexecutive director appointment with the board’s prior approval  
and as long as this is not likely to lead to conflicts of interest
the company secretary’s responsibilities include ensuring good 
information flows to the board and between senior management and  
the nonexecutive directors the appointment and removal of the 
company secretary is a matter reserved for the board the company 
secretary is responsible through the chairman for advising the board 
on all corporate governance matters and for assisting the directors  
with their professional development this includes regular corporate 
governance and business issues updates as well as the use of 
operational site visits and the provision of external courses where 
required the company secretary facilitated a comprehensive induction 
for the newly appointed directors tailored to individual requirements 
and including guidance on requirements of and directors’ duties in 
connection with the code and the companies act 2006 as well as other 
relevant legislation externally facilitated board training on legal and 
governance development relevant to the company is included in the 
board’s forward timetable of activities
during fy 2013 there were 10 scheduled board meetings there was 
also one meeting of each of the audit and remuneration committees 
no meetings of the nomination committee were held the table below 
shows attendance levels at the board and committee meetings held 
during the year the numbers in brackets confirm how many meetings 
each director was eligible to attend during the year
where a director was unable to attend a meeting they were provided 
with all the papers and information relating to that meeting and were  
able to discuss issues arising direct with the chairman there are 11 
board meetings currently planned for fy 2014 
attendance levels at board and committee meetings
board
audit
committee
remuneration
committee
nomination
committee
current directors who served during the year
bob ivell 10 10 – 1 1 –
alistair darby 10 10 – – –
stewart gilliland
1
2 3 1 1 1 1 –
eddie irwin 10 10 1 1 1 1 –
tim jones 10 10 – – –
douglas mcmahon 8 10 – – –
ron robson 8 10 0 1 0 1 –
colin rutherford
2
4 4 1 1 1 1 –
imelda walsh
2
4 4 1 1 1 1 –
former directors who served during the year
doug evans 4 4 – – –
1 appointed 23 may 2013
2 appointed 22 april 2013
directors
the following were directors of the company during the year ended  
28 september 2013
 
date
appointed
date of
change of role
current directors who served during the year
bob ivell independent non
executive director
1
090511 140711
interim chairman
1
140711 261011
executive chairman 261011 121112
nonexecutive 
chairman
121112 –
alistair darby chief executive 081012 –
stewart gilliland independent 
nonexecutive 
director
230513 –
eddie irwin
2
nonexecutive 
director
210312 –
tim jones finance director 181010 –
douglas mcmahon
3
nonexecutive 
director
151010 –
ron robson
3
nonexecutive 
director
220110 –
deputy chairman 140711 –
colin rutherford independent 
nonexecutive 
director
220413 –
imelda walsh independent 
nonexecutive 
director
220413 –
 
 
date
appointed
date
ceased
former directors who served during the year
doug evans director 261011 310113
1 independent while in the role specified
2 nominated shareholder representative of elpida limited
3 nominated shareholder representative of piedmont inc
43
mitchells  butlers plc annual report and accounts 2013
company overview 01 – 05 strategic and business review 07 – 34 governance 35 – 64 financial statements 65 – 106 shareholder information 107 – 108 corporate governance statement
continued
details of the executive directors’ service contracts are set out on  
page 56 and on the company’s website the chairman and each of the  
nonexecutive directors have letters of appointment which are available 
for inspection at the registered office of the company during normal 
business hours and at the place of the annual general meeting from  
at least 15 minutes before and until the end of the meeting 
all the company’s directors are required to stand for annual  
reelection in accordance with provision b7 1 of the code and the 
company’s articles of association their biographical details as at  
25 november 2013 are set out on page 37  including their main 
commitments outside the company further information is below
chairman
bob ivell was appointed to the role of executive chairman on  
26 october 2011 and reverted to the role of nonexecutive chairman on 
12 november 2012 following the completion of an induction period by 
alistair darby who was appointed chief executive on 8 october 2012 
the chairman ensures that appropriate communication is maintained 
with shareholders he has responsibility for running the board and  
for ensuring that all directors are fully informed of matters relevant  
to their roles 
chief executive
bob ivell discharged the duties of the chief executive from  
26 october 2011 until the appointment of alistair darby on  
8 october 2012 with a formal handover of responsibilities taking  
place on 12 november 2012 following completion of an induction  
period by mr darby
the chief executive has responsibility for implementing the strategy 
agreed by the board and for the executive management of the group
senior independent director
the board has not currently identified any of its members as senior 
independent director although this is a matter which the nomination 
committee is keeping under review in the light of the appointments 
of independent nonexecutive directors in april and may 2013
nonexecutive directors 
the company has experienced nonexecutive directors on its board 
bob ivell was considered to be independent upon his appointment on  
9 may 2011 in that he was free from any business or other relationship 
which could materially influence his judgement and he represented 
a strong source of advice and independent challenge since his 
appointment as chairman on 14 july 2011 as set out in the code the 
independence test is no longer appropriate to apply to his position 
ron robson and douglas mcmahon have been appointed to the board 
as representatives of the company’s largest shareholder piedmont inc 
and are therefore not regarded as independent in accordance with 
the code 
eddie irwin has been appointed to the board as a representative of the 
company’s second largest shareholder elpida limited and is therefore 
not regarded as independent in accordance with the code 
there are currently three independent nonexecutive directors on  
the board stewart gilliland colin rutherford and imelda walsh
other than their fees which are disclosed on page 59 the 
nonexecutive directors received no remuneration from the company  
during the year when nonexecutive directors are considered for 
appointment the board will take into account their other responsibilities 
in assessing whether they can commit sufficient time to their 
prospective directorship
board information and training
all directors are briefed by the use of comprehensive papers circulated 
in advance of board meetings and by presentations at the meetings in 
addition to receiving minutes of previous meetings their understanding 
of the group’s business is enhanced by business specific presentations 
and operational visits to the group’s businesses separate strategy 
meetings and meetings with senior executives are also held throughout 
the year the training needs of directors are formally considered on 
an annual basis and are also monitored throughout the year with 
appropriate training being provided as required
committees
each board committee has written terms of reference approved by 
the board which are available on the company’s website
for part of fy 2013 until 11 july 2013 the business which would normally 
be considered by committees was considered by the board as a whole
audit committee
details of the audit committee are included in the audit committee 
report on pages 47 to 49 and are incorporated by reference into 
this statement
remuneration committee
details of the remuneration committee are included in the report on 
directors’ remuneration on pages 50 to 64 and are incorporated by 
reference into this statement
nomination committee
the nomination committee is responsible for nominating for the 
approval of the board candidates for appointment to the board it is  
also responsible for succession planning and reviewing the output of  
any board effectiveness review a detailed description of the duties  
of the nomination committee is set out within its terms of reference 
which can be viewed at wwwmbplccom 
the following were members of the nomination committee during  
the year
appointment
date
member at
 280913
bob ivell chair 110713 y
stewart gilliland 110713 y
eddie irwin 110713 y
ron robson 110713 y
colin rutherford 110713 y
imelda walsh 110713 y
during the year the company did not comply with provision b21 of 
the code in respect of a nomination committee consisting of a majority 
of independent nonexecutive directors prior to the appointment of 
stewart gilliland colin rutherford and imelda walsh the nomination 
committee was not fully constituted no meetings were held and its role 
was taken on by the full board so that there was at all times a formal 
rigorous and transparent procedure for the appointment of new directors 
to the board directors did not attend the relevant meetings where 
their own roles were being discussed following the appointment of  
the three independent nonexecutive directors in april and may 2013 
nomination committee members were appointed with effect from 
11 july 2013 and revised terms of reference established in order 
to move more in line with code requirements
the board considered the appointments of colin rutherford  
imelda walsh and stewart gilliland independent advice was taken in 
relation to their appointments from spencer stuart an executive search 
and leadership consulting firm any director unable to attend a meeting 
was provided with all the papers and information relating to that meeting 
and was able to discuss issues arising direct with the chairman and the 
company secretary
44
mitchells  butlers plc annual report and accounts 2013 general purposes committee
the general purposes committee comprises any two executive 
directors or any one executive director together with a senior officer 
from an agreed and restricted list of senior executives it is always chaired 
by an executive director it attends to business of a routine nature and to 
the administration of matters the principles of which have been agreed 
previously by the board or an appropriate committee
executive committee
the executive committee which is chaired by the chief executive 
previously by the chairman consists of the executive directors and 
certain other senior executives namely matthew jenkins marketing 
director gary john group property director susan martindale 
group hr director greg mcmahon company secretary and 
general counsel and robin young operations director
the executive committee meets at least every four weeks and has day
today responsibility for the running of the group’s business it develops 
the group’s strategy and annual revenue and capital budgets for board 
approval it reviews and recommends to the board any significant 
investment proposals 
this committee monitors the financial and operational performance 
of the group and allocates resources within the budgets agreed by 
the board it considers employment issues ensures the group has an 
appropriate pool of talent and develops senior management manpower 
planning and succession plans
independent advice
members of the board may take independent professional advice in the 
furtherance of their duties and the board has agreed a formal process 
for such advice to be made available members of the board also have 
access to the advice and services of the company secretary and general 
counsel the company’s legal advisers and its external auditor
code of ethics
the company has implemented business conduct guidelines describing 
the standards of behaviour expected from those working for the company 
via a code of ethics the ‘ethics code’ its aim is to promote honest and 
ethical conduct throughout our business and it applies to all corporate 
employees the ethics code requires
• compliance with all applicable rules and regulations that apply  
to the company and its officers including the bribery act 2010
• the ethical handling of actual or apparent conflicts of interest 
between internal and external personal and professional 
relationships and
• that any hospitality from suppliers must be approved 
with a presumption against its acceptance
the company takes a zero tolerance approach to bribery and has 
developed an extensive bribery policy the ethics code requires 
employees to comply with the bribery policy
the company also offers an independently administered confidential 
whistleblowing hotline for any employee wishing to report any 
concern that they feel is inappropriate to raise with their line manager 
all whistleblowing allegations are reported to and considered by the 
executive committee and board
the board takes regular account of social environmental and ethical 
matters concerning the company through regular reports to the board 
and presentations to the board at its strategy meetings the company 
secretary is responsible for ensuring that directors are made aware 
of and receive training in respect of such matters the board is also 
responsible for the company’s internal risk management system 
in respect of which more details can be found in the risks and 
uncertainties section of this report and below
internal control and risk management
the board has overall responsibility for the group’s system of internal 
control and risk management and for reviewing its effectiveness in order 
to discharge that responsibility the board has established the procedures 
necessary to apply the 2010 uk corporate governance code for the 
year under review and to the date of approval of the annual report  
such procedures are regularly reviewed by the audit committee
the key features of the group’s internal control and risk management 
systems include
• an overall governance framework including 
 i clearly defined delegation of authority and reporting lines 
 ii  a comprehensive set of policies and procedures that employees 
are required to follow and
 iii  the group’s code of ethics in respect of which an annual 
confirmation of compliance is obtained from all corporate 
employees
• processes including monitoring by the board in respect of 
 i  financial performance within a comprehensive financial planning 
accounting and reporting framework
 ii  strategic plan achievement
 iii  capital investment and asset management performance with 
detailed appraisal authorisation and postinvestment reviews and
 iv  consumer insight data and actions to evolve brands and formats to 
ensure that they continue to be appealing and relevant
• the risk committee a subcommittee of the executive committee 
which assists the board audit committee and executive 
committee in managing the processes for identifying evaluating 
monitoring and mitigating risks the risk committee which met 
four times during fy 2013 is chaired by the company secretary 
and general counsel and comprises executive committee 
members and other members of senior management from a cross 
section of functions its primary responsibilities are to
 i  advise the executive committee on the company’s overall risk 
appetite and strategy taking account of the current and 
prospective operating legal macroeconomic and financial 
environments
 ii  advise the executive committee on the current and emerging  
risk exposures of the company in the context of the overall risk 
appetite and strategy
 iii promote the management of risk throughout the organisation
 iv  review and monitor the company’s capability and processes to 
identify and manage risks
 v  consider the identified key risks faced by the company and  
new and emerging risks and consider the adequacy of  
mitigation plans in respect of such risks and
 vi  where mitigation plans are inadequate recommend  
improvement actions
the group risks identified by the processes that are managed by the risk 
committee are described in ‘risks and uncertainties’ on pages 18 to 20
• examination of business processes on a risk basis including reports 
from the internal audit function known as group assurance 
which reports directly to the audit committee
45
mitchells  butlers plc annual report and accounts 2013
company overview 01 – 05 strategic and business review 07 – 34 governance 35 – 64 financial statements 65 – 106 shareholder information 107 – 108 corporate governance statement
continued
the group also has in place systems including policies and procedures 
for exercising control and managing risk in respect of financial reporting 
and the preparation of consolidated accounts these systems policies 
and procedures
• govern the maintenance of accounting records that in  
reasonable detail accurately and fairly reflect transactions
• require reported information to be reviewed and reconciled  
with monitoring by the board and 
• provide reasonable assurance that transactions are recorded  
as necessary to permit the preparation of financial statements  
in accordance with international financial reporting standards 
‘ifrs’ or uk generally accepted accounting principles  
as appropriate
in accordance with the code during the year the audit committee 
completed its annual review of the effectiveness of the group’s risk 
management and internal control systems including financial 
operational and compliance controls the system of internal control is 
designed to manage rather than eliminate the risk of failure to achieve 
business objectives and as such it can only provide reasonable and not 
absolute assurance against material misstatement or loss in that context 
in the opinion of the audit committee the review did not indicate that 
the system was ineffective or unsatisfactory and to the extent that 
weaknesses in internal controls were identified the audit committee 
confirms that necessary remedial action plans are in place the audit 
committee is not aware of any change to this status up to the approval  
of this annual report
with regard to insurance against risk it is not practicable to insure against 
every risk to the fullest extent the group regularly reviews both the 
type and amount of external insurance that it buys with guidance from  
an external independent body bearing in mind the availability of such 
cover its cost and the likelihood and magnitude of the risks involved
shareholder relations
the board recognises that it is accountable to shareholders for the 
performance and activities of the company the company formally 
updates the market on its financial performance at least five times a year 
at the half year and full year results in may and november respectively 
the interim management statements in january and july and by way of a 
preclose trading update in september the content of these updates is 
available by webcast on the company’s website together with general 
information about the company so as to be available to all shareholders 
the company has a regular programme of meetings with its larger 
shareholders which provides an opportunity to discuss on the back of 
publicly available information the progress of the business on a more 
informal basis the chairman chief executive and the finance director 
regularly report to the board the views of larger shareholders about the 
company and the other nonexecutive directors are available to meet 
shareholders on request and are offered the opportunity to attend 
meetings with larger shareholders
the agm provides a useful interface with shareholders many of whom 
are also customers all proxy votes received in respect of each resolution 
at the agm are counted and the balance for and against and any votes 
withheld are indicated 
board effectiveness evaluation
as explained above in view of the recent changes to the board a 
detailed evaluation was not carried out during fy 2013 it is expected 
that during fy 2014 the nomination committee in conjunction with  
the company secretary and general counsel will review the most 
appropriate method for conducting a board evaluation with the 
expectation that any externally facilitated evaluation will not take  
place until at least fy 2015
going concern
the directors’ statement as to going concern can be found on page 40
46
mitchells  butlers plc annual report and accounts 2013 audit committee report
introduction from the audit committee chair  
following my appointment as chair of the audit committee in july 2013 
i am delighted to present on behalf of the board our audit committee 
report for the financial year ended 28 september 2013 i would like to 
take this opportunity to thank ron robson for his efforts as audit 
committee chair over the previous two years 
since my appointment i have been committed to gaining a broad 
understanding of the company its operations and its challenges and 
have spent valuable time with key individuals across the group who  
have collectively provided me with an appreciation and useful insight  
into how the company functions the main areas of focus since july 2013 
have been to consider the critical accounting judgements and the key 
operational and financial risks facing the business 
a key area of the audit committee’s work going forward will be to  
work closely with both the external auditors and the director of group 
assurance  risk management this will enable me to gain an indepth 
understanding on how external audit works with group assurance to 
give comprehensive coverage on the overall audit process and how  
it uses its resources if any additional assurance could be provided  
where necessary 
the role of the audit committee is now more important than ever in 
reviewing the effectiveness of the group’s internal controls providing 
assurance on the group risk management processes and assessing and 
acting upon information received by external auditors and internal audit 
as we work together as a newly formed audit committee over time  
we will develop a better appreciation for additional information that 
committee members may need in order to maintain effectiveness  
and add value to the group
colin rutherford 
chair of the audit committee
membership and remit of the audit committee 
the main purpose of the audit committee is to review and maintain 
oversight of the mitchells  butlers corporate governance particularly 
with respect to financial reporting internal control and risk management 
the audit committee’s responsibilities also include
• reviewing the processes for detecting fraud misconduct and 
internal control weaknesses
• reviewing the effectiveness of the group assurance function and
• overseeing the relationship with the external auditors 
at the date of the 2013 annual report the audit committee comprises 
three independent nonexecutive directors colin rutherford chair 
imelda walsh stewart gilliland and two further nonexecutive 
directors nominated by substantial shareholders ron robson and  
eddie irwin in accordance with code provision c31 the board 
considers that colin rutherford has significant recent and relevant 
financial experience biographies of all of the members of the audit 
committee including a summary of their experience appear on page 37  
following the appointment of three independent nonexecutive 
directors in april and may 2013 committee members were appointed 
with effect from 11 july 2013 and revised terms of reference established 
in order to move more in line with code requirements the audit 
committee normally meets at least four times a year the full board 
reviewed audit matters at three meetings during fy 2013 and the audit 
committee reviewed audit matters at its first meeting in september 2013 
when appropriate the audit committee augments the skills and 
experiences of its members with advice from internal and external  
audit professionals for example on matters such as developments in 
financial reporting audit committee meetings are also attended by 
invitation by members of the board the director of group assurance  
risk management and representatives of the external auditors deloitte 
llp  the audit committee also meets privately not less than twice 
a year without any member of management present with the director 
of group assurance  risk management in relation to internal audit 
matters and with the external auditors 
the remuneration of the members of the audit committee is set out 
in the report on directors’ remuneration on page 59
terms of reference
a copy of the audit committee’s terms of reference is publicly  
available within the investor section of the company’s website  
http wwwmbplccompdfauditcommitteetermspdf
the audit committee is authorised by the board to review any activity 
within the business it is authorised to seek any information it requires 
from and require the attendance at any of its meetings of any  
director or member of management and all employees are expected  
to cooperate with any request made by the audit committee 
the audit committee is authorised by the board to obtain at the 
company’s expense outside legal or other independent professional 
advice and secure the attendance of outsiders with relevant experience 
and expertise if it considers this necessary the chair of the audit 
committee reports to the subsequent board meeting on the 
committee’s work and the board receives a copy of the minutes 
of each meeting 
colin rutherford
chair of the  
audit committee
47
mitchells  butlers plc annual report and accounts 2013
company overview 01 – 05 strategic and business review 07 – 34 governance 35 – 64 financial statements 65 – 106 shareholder information 107 – 108 audit committee report
continued
the role and responsibilities of the audit committee are to
• review the company’s public statements on internal control 
risk management and corporate governance compliance
• review the company’s processes for detecting fraud misconduct 
and control weaknesses and to consider the company’s response 
to any such occurrence
• review management’s evaluation of any change in internal 
controls over financial reporting
• review with management and the external auditor company 
financial statements required under uk legislation before 
submission to the board
• establish review and maintain the role and effectiveness of 
the internal audit function known as group assurance whose 
objective is to provide independent assurance over the group’s 
significant processes and controls including those in respect 
of the group’s key risks
• assume direct responsibility for the appointment compensation 
resignation dismissal and the overseeing of the external auditor 
including review of the external audit its cost and effectiveness
• preapprove nonaudit work to be carried out by the external 
auditor and the fees to be paid for that work together with the 
monitoring of the external auditor’s independence
• oversee the process for dealing with complaints received by  
the group regarding accounting internal accounting controls or 
auditing matters and any confidential anonymous submission  
by employees of concerns regarding questionable accounting  
or auditing matters and
• adopt and oversee a specific code of ethics for all corporate 
employees which is consistent with the company’s overall 
statement of business ethics
key activities of the audit committee
audit matters are reviewed at quarterly audit committee meetings 
throughout the year at which detailed reports are presented for review 
the audit committee commissions reports from external advisers  
the director of group assurance  risk management or company 
management either after consideration of the company’s major  
risks or in response to developing issues during the year the board  
until july 2013 and the audit committee after july 2013 considered 
the following matters
• the suitability of the group’s accounting policies and practices 
• half year and full year financial results
• the scope and cost of the external audit
• the external auditor’s half year and full year reports 
• reappointment and evaluation of the performance of the external 
auditor including recommendations to the board for approval  
by shareholders on the appointment of the company’s external 
auditors and approval of fees and terms of engagement
• nonaudit work carried out by the external auditor and trends  
in the nonaudit fees in accordance with the committee’s policy  
to ensure the safeguard of audit independence  
• the coordination of the internal and external audit functions
• the arrangements in respect of group assurance including its 
resourcing external support the scope of the annual internal 
audit plan for fy 2013 regarding the level of achievement and  
the scope of the internal audit plan for fy 2014
• periodic internal control and assurance reports from  
group assurance
• the group’s risk management framework for the identification  
and control of major risks its risk and assurance mitigation  
plan and the annual assessment of control effectiveness
• compliance with the company’s code of ethics
• corporate governance developments
• the status of material litigation involving the group and
• reports on allegations made via the group’s whistleblowing 
procedures and the effectiveness of these procedures  
including a summary of reports received during fy 2013
disclosure of significant issues considered 
the audit committee has reviewed the key judgements applied in  
the preparation of the consolidated financial statements which are 
described in the relevant accounting policies and detailed notes to the 
financial statements on pages 73 to 98 the audit committee’s review 
included consideration of the following key accounting judgements
• property – the group’s freehold and long leasehold assets form 
the vast majority of the £39bn property plant and equipment 
value on the balance sheet the group’s policy is to undertake an 
annual valuation of freehold and long leasehold properties based 
on inspection of 20 of the sites by the group’s independent 
chartered surveyors significant accounting judgements are made 
in respect of valuation multiples and in determining levels of fair 
maintainable trade this is a prime area of audit focus
• pensions – actuarial assumptions including judgements in relation 
to longterm interest rates inflation longevity and investment 
returns are taken on advice from the group’s pension adviser  
the final calculations in respect of the defined benefit pension 
scheme liability are performed by our pension scheme actuary  
the audit committee also considered the restatement of the prior 
period end pension deficit as described in note 8 to the financial 
statements and
• taxation – assessment of judgements made in relation to uncertain 
tax positions regarding the outcome of negotiations with and 
enquiries from hm revenue  customs judgements have been 
made following discussion with the group’s tax advisers and 
internal review
effectiveness of internal audit 
the audit committee is responsible for monitoring and reviewing 
the effectiveness of the company’s internal audit function the audit 
committee meets regularly with management and with the internal and 
external auditors to review the effectiveness of internal controls and risk 
management and receives reports from the director of group assurance 
 risk management on a quarterly basis 
the annual internal audit plan is approved by the audit committee  
and kept under review on a monthly basis by the director of group 
assurance  risk management in order to reflect the changing  
business needs and to ensure new and emerging risks are considered 
the audit committee is informed of any amendments made to the audit 
plan on a quarterly basis the fy 2013 internal audit plan was developed 
through a review of formal risk assessments in conjunction with the 
risk committee and the group’s executive committee together with 
consideration of the group’s key business processes and functions 
that could be subject to audit a similar approach has been employed 
in relation to the fy 2014 internal audit plan
the principal objectives of the internal audit plan for fy 2013 were  
and remain for fy 2014
• to provide confidence that existing and emerging key risks  
are being managed effectively
• to confirm that controls over core business functions and  
processes are operating as intended ‘core assurance’ and
• to confirm that major projects and significant business  
change programmes are being adequately controlled
during fy 2013 24 audit reports were issued by the group assurance 
function and reviewed by the board or the audit committee internal 
audit recommendations are closely monitored through to closure  
via a webbased recommendation tracking system introduced in  
fy 2013 which has improved the overall monitoring of internal audit 
recommendations to ensure these are successfully implemented in a 
timely manner a summary of the status of the implementation of internal 
audit recommendations is made monthly to the executive committee 
and quarterly to the audit committee
48
mitchells  butlers plc annual report and accounts 2013 risk management framework
as disclosed in the ‘risks and uncertainties’ section on pages 18 to 20  
the risk committee continues to meet on a quarterly basis to review  
the key risks facing the business the risk committee met on four 
occasions in fy 2013 membership of the risk committee which 
includes representation from each of the key business functions  
is detailed below
• company secretary and general counsel chair
• group finance director
• group hr director
• operations director
• director of business change  technology
• director of group assurance  risk management
key risks identified are reviewed and assessed on a quarterly basis 
in terms of their likelihood and impact within the group’s ‘key risk heat 
map’ in conjunction with associated risk mitigation plans in addition the 
risk committee’s review includes an assessment of the material relevance 
of emerging risks and the continued relevance of previously identified 
risks actions arising from risk committee meetings are followed up by the 
director of group assurance  risk management the audit committee 
reviews the quarterly risk committee minutes in addition to a review 
of the group’s ‘key risk heat map’ at least every six months 
confidential reporting 
the group’s whistleblowing policy enables staff in confidence to raise 
concerns about possible improprieties in financial and other matters  
and to do so without fear of reprisal details of the policy are set out  
in the company’s code of ethics the audit committee receives 
quarterly reports on whistleblowing incidents and remains satisfied  
that the procedures in place are satisfactory to enable independent 
investigation and follow up action of all matters reported no major  
issues have been reported in fy 2013 major issues being defined for  
this purpose as matters having a financial impact greater than £100k 
external auditor appointment
deloitte llp were appointed as external auditors in 2011 following a 
formal tender process the audit committee has considered the new 
guidance in relation to auditor rotation including the proposed transition 
rules which will be considered when recommending the appointment of 
the external auditor in future years the audit committee considers that 
the relationship with the auditors is working well and is satisfied with their 
effectiveness and has not considered it necessary to require deloitte llp 
to retender for the external audit work there are no contractual 
obligations restricting the company’s choice of external auditor 
following their appointment as external auditor deloitte llp were 
replaced in respect of the provision of internal audit services by 
pricewaterhousecoopers llp 
external auditor’s independence
the audit committee has an established policy aimed at safeguarding 
and supporting the independence and objectivity of the group’s 
external auditors details of the policy are summarised below the audit 
committee remains confident that the objectivity and independence  
of the external auditors are not in any way impaired by reason of the 
nonaudit services which they provide to the group 
the external auditor may carry out certain specified nonaudit work  
in areas that have been preapproved by the audit committee up to  
a monetary limit of half the audit fee per transaction and subject to an 
annual total cap of no more than the audit fee any other work for which 
management wishes to utilise the external auditor must be approved 
subject to a de minimis limit normally by the committee or its chair  
for engagements up to a monetary limit of £50000 subject to an annual 
total cap of £100000 by the finance director acquisition and vendor 
duediligence may only be provided by the external auditor if specifically 
approved by the committee on a casebycase basis in advance of any 
engagement commencing the preapproved services may be 
summarised as follows
• audit related services including work related to the annual  
group financial statements audit subsidiary audits and  
statutory accounts and
• certain specified tax services including tax compliance  
tax planning and tax advice
external audit annual assessment 
the audit committee assesses annually the qualification expertise 
resources and independence of the group’s external auditors and 
the effectiveness of the audit process the finance director company 
secretary and general counsel audit committee chair and director of 
group assurance  risk management meet with the external auditors to 
discuss the audit and any key issues included on the audit committee’s 
agenda during the year
the audit committee has completed its assessment of the external 
auditors for the financial year 2013 and has satisfied itself as to their 
qualification expertise and resources and remains confident that their 
objectivity and independence are not in any way impaired by reason of 
the nonaudit services which they provide to the group the committee 
has recommended to the board for approval by shareholders the 
reappointment of deloitte llp  as the group’s external auditors 
resolutions will be proposed at the agm on 30 january 2014 to  
reappoint deloitte llp as the company’s auditors and to authorise  
the directors to agree their remuneration for the fy 2014 audit 
fair balanced and understandable statement 
one of the key governance requirements of a group’s financial 
statements is for the report and accounts to be fair balanced and 
understandable therefore in order for the audit committee and 
the board to be satisfied with the overall fairness balance and 
clarity of the annual report it is underpinned by the following
• formal minutes of the year end working group
• clear guidance issued to all contributors to ensure a consistent 
approach and 
• formal review processes at all levels to ensure the annual report  
is factually correct
approved by the board
colin rutherford 
chair of the audit committee
25 november 2013
49
mitchells  butlers plc annual report and accounts 2013
company overview 01 – 05 strategic and business review 07 – 34 governance 35 – 64 financial statements 65 – 106 shareholder information 107 – 108 report on directors’ remuneration
imelda walsh
chair of the remuneration 
committee
statement from the committee chair
following my appointment as chair of the remuneration committee 
in july 2013 i am pleased to present the directors’ remuneration 
report for the financial year which ended on 28 september 2013
over the past year we have made significant progress in positioning 
the business for future sustainable growth through improved 
consumer insight and our business transformation programme 
in difficult economic conditions performance has been strong 
with improvements in sales margins and adjusted earnings per  
share ‘eps’ 
the attraction retention and motivation of an executive team with 
the skill and experience required to develop and grow our business 
profitably is central to the work of the remuneration committee the 
‘committee’ in the period since my appointment my primary focus 
has been to understand our reward policies and prioritise work 
streams for the committee in the year ahead 
as a committee we are clear on the principles which will guide and 
inform our future decisions these are that variable short and longterm 
reward should be linked to the financial performance of the group 
and that base pay should be set by reference to personal contribution 
experience and competence as well as to the market conditions 
applicable to the role 
the following key remuneration activity occurred during the 
reporting year
an award was made under the terms of the 2013 performance restricted 
share plan ‘prsp’ following shareholder approval at the january 2013 
agm full details are set out on page 60 as a condition to the prsp 
award all employees eligible to join the prsp who were also participants 
in the 2010 long term incentive plan ‘2010 ltip’ elected in february 
2013 to cancel without payment any entitlement under the 2010 ltip  
accordingly no participants remain in the 2010 ltip  
the committee believes that the new prsp provides executive directors 
and other members of senior management with a longterm incentive 
opportunity which is more closely aligned to the interests of shareholders 
and also provides an element of retention performance measures for the 
2014 to 2016 award have been reviewed and the committee is satisfied 
that eps and relative total shareholder return tsr remain appropriate 
in supporting the delivery of the group strategic plan 
the performance measure for the 2014 annual bonus will continue to 
be eps 
this year despite the challenging economic environment improvements 
have been made across all of our key metrics with staff turnover 
reducing net promoter scores improving and profits growing this has 
been reflected in eps growth of 17 in this context the committee 
is satisfied that the bonus payment of 71 of the maximum for the 
executive directors is merited 
the committee has also considered the base pay of the executive 
directors and of other executive committee members in view of  
the improvements which have been made in financial performance 
share price growth over the year of 406 and the progress made  
in delivering our business transformation programme the committee  
has decided that it is appropriate to reward executive directors with  
a modest increase in base pay of 2 this is in line with the increase 
in base pay awarded to employees across the group
except for the award under the prsp  no changes to the structure of 
executive remuneration have applied in the reporting year and none are 
proposed for financial year 2014
it is the intention of the committee to conduct a review of our executive 
remuneration policy in the coming year and if appropriate propose 
amendments to ensure that it will continue to provide a robust and 
suitable framework for the business the committee will engage with 
shareholders and their representative bodies to develop an enduring 
flexible policy which will continue to support the company’s strategy 
it is proposed that the remuneration policy will in line with legislative 
requirements be set out in next year’s annual report and will be the 
subject of a binding vote at the 2015 annual general meeting ‘agm’
we are committed to open and full disclosure of matters related to 
executive remuneration although not yet subject to the requirements 
of the new companies act disclosure regulations the large and 
mediumsized companies and groups accounts and reports 
amendment regulations 2013 the ’new regulations’ this report 
reflects our understanding of the additional requirements arising from 
these regulations including the disclosure of new data in a way that we 
believe will be most helpful to shareholders this includes
• the separation of the report into policy and annual report sections
• a single figure of total remuneration for directors and 
• the inclusion of a five year ceo earnings history and a comparison 
of the increase in ceo earnings against other salaried employees
this report both the policy and annual report sections will be subject  
to an advisory vote at our agm on 30 january 2014
imelda walsh
chair remuneration committee
50
mitchells  butlers plc annual report and accounts 2013 the committee’s responsibilities include
• determining the framework for executive remuneration 
• ensuring that remuneration is aligned with shareholder interests 
and supports the company’s strategic plan
• maintaining positive dialogue with investors on remuneration 
matters 
• ensuring that the remuneration structure supports the attraction 
retention and motivation of executives with an appropriate level 
of skill and experience to improve the company’s performance 
  the full terms of reference of the committee are available on our website  
wwwmbplccominvestorsbusinessconductboardcommittees and on request
this report has been prepared on behalf of the board and has been 
approved by the board the report complies with the large and 
mediumsized companies and groups accounts and reports 
regulations 2008 as they apply to companies with financial years ending 
on or before 30 september 2013 the 2010 uk corporate governance 
code the ‘code’ and the financial conduct authority listing rules  
in addition this report has been prepared to reflect the committee’s 
understanding of the additional disclosure requirements of the new 
regulations which will apply to the company in next year’s report 
throughout this report references to the year are to the 52 week period 
ended 28 september 2013 comparatives are for the 53 week period 
ended 29 september 2012
in the year under review the business of the committee was considered 
by the board up to the date on which the committee was appointed  
and thereafter by the committee the committee is constituted in 
accordance with the code

 and operates within terms of reference  
a copy of which is available as set out above
to reflect the requirements of the revised remuneration reporting 
regulations this report is presented in three sections an annual statement 
from the chair of the committee the policy report and the annual report
 
policy report
this section of the report sets out the company’s remuneration policy  
for the year commencing 29 september 2013
it is the responsibility of the committee to determine a policy framework 
which ensures that executive directors’ remuneration is appropriate  
to attract retain and motivate executive directors with the skill and 
experience required to develop and grow the business profitably to  
align executive directors’ interests with those of shareholders and  
to provide the potential to earn significant rewards where significant 
shareholder value has been delivered 
factors taken into account when setting remuneration policy
the committee is mindful of a broad range of stakeholders in the 
business and accordingly takes account of a range of factors when setting 
remuneration policy including market conditions pay and benefits in 
relevant comparator organisations terms and conditions of employment 
across the group and shareholder feedback the committee is satisfied 
that the remuneration policy set out supports the company’s business 
strategy of growing longterm shareholder value and appropriately 
balances fixed and variable remuneration
the committee consults with the company chairman and the chief 
executive ‘ceo’ except where conflicted to set the remuneration 
policy the committee considers a broad range of internal and external 
information in determining policy this includes a review of external 
benchmarking information when reviewing executive directors’ base 
pay and as required on appointment of a new executive director or  
other executive committee member market data is provided to the 
committee by its independently appointed advisers 
shareholders and their representative bodies are consulted where 
material changes to the executive directors’ remuneration policy are 
being considered as well as taking account of institutional shareholder 
views in formulating remuneration policy it should be noted that  
two members of the committee ron robson and eddie irwin are 
representatives of the company’s two major shareholders who  
together hold 4916 of the issued share capital of the company  
as at 28 september 2013 
it is a requirement of the new regulations that if obligations under the 
company’s previous remuneration policy are to remain in force this  
must be stated and certain information must be provided in view of the 
longterm nature of the company’s remuneration structures a number  
of preexisting obligations will remain outstanding at the time that the 
new policy is approved including obligations that were in force prior  
to or at 27 june 2012 the relevant effective date for the purposes of  
the new regulations it is the company’s policy to honour in full any  
preexisting obligations that have been entered into prior to the effective 
date of this policy
for clarity of reporting references to the sharesave plan ‘sharesave’ 
share incentive plan ‘sip’ performance restricted share plan ‘prsp’ 
and short term deferred incentive plan ‘stdip’ refer both to share 
awards under these original schemes and following the expiry of these 
schemes for grant purposes subsequent awards under their respective 
replacement schemes on substantially the same terms both the original 
schemes and their replacements in 2013 were approved by shareholders 
  provisions d21 and d22 of the code were not complied with because up to and 
including the appointment of the committee the matters to be determined by the 
committee were determined by the board as a whole thereafter the remuneration 
of the directors and senior employees below the board has been determined by 
the committee not the board
51
mitchells  butlers plc annual report and accounts 2013
company overview 01 – 05 strategic and business review 07 – 34 governance 35 – 64 financial statements 65 – 106 shareholder information 107 – 108 report on directors’ remuneration
continued
the table below summarises each element of the remuneration policy applicable to executive directors
purpose and  
link to strategy operation opportunity
performance  
metrics
recovery or  
withholding
base salary
provides a sound basis on 
which to attract and retain 
executives of appropriate 
calibre to deliver the strategic 
objectives of the group
to reflect the market value  
of the role personal 
contribution experience  
and competence
salaries are subject to annual review which is normally in 
line with that for the wider group higher increases may be 
awarded where there is a commercial need to do so the 
decision may be influenced by
• role experience or performance
• average change in wider workforce pay
•  group profitability and prevailing market 
conditions and
•  external benchmarking of similar roles at comparable 
companies
any increase is normally effective from 1 january
payable in cash fourweekly throughout the  
year pensionable
normally set broadly in line with 
market median 
a higher or lower base may be set 
where the committee considers 
that there is a genuine business 
benefit in so doing for example 
an individual may be appointed to 
a new role at below market salary 
while gaining experience 
subsequent demonstration of 
strong performance may result  
in a salary increase that is higher 
than for the wider workforce
executive directors’ 
performance is reviewed  
in line with the established 
performance review process 
in place across the group
no recovery or 
withholding applies
annual performance bonus cash and shares
provides a direct link 
between the achievement of 
annual business performance 
targets and reward
bonus payment level is determined by the committee  
by reference to performance against the targets set by  
the committee prior to the commencement of the 
performance year the cash element of the bonus is 
normally payable in december 
up to half of any bonus award is payable in cash at least 
half of any bonus award is deferred as shares under the 
terms of the stdip below executive directors may request 
that the committee exercise its discretion to defer more 
than half of any annual bonus awarded into shares
nonpensionable
key terms of the stdip are
•  deferred bonus share awards are normally released in 
two equal amounts 12 and 24 months after deferral
•  at the discretion of the committee dividend accrued 
shares may be awarded on vested shares 
under the plan rules a matching share award may also  
be made although there is currently no intention to make 
matching share awards
the normal maximum payment is 
100 of base salary
at the discretion of the committee 
the maximum earnings potential 
may be increased in line with  
the plan rules to up to 200 of 
base salary
the maximum may comprise any 
combination of cash deferred 
shares and matching shares  
save that no more than half of  
any bonus award is paid in cash
annual bonus is currently 
payable based wholly on 
the eps performance of 
the group 
threshold vesting applies at 
100 of target and pays 50 
of base salary 
maximum vesting applies  
at 110 of target with  
straight line vesting between 
these points
no bonus is payable for 
performance below target
the nature of the 
performance measures and 
the targets are reviewed in 
advance of each new award 
the committee has the 
discretion to amend the 
measures andor the targets 
to reflect business need it is 
intended that any change will 
not result in targets which are 
materially less challenging
as the bonus is subject to 
performance conditions any 
deferred bonus is not subject 
to further conditions 
no recovery or 
withholding applies to 
any bonus paid in cash
the deferred bonus 
share awards may be 
subject to forfeiture 
where the participant 
leaves the employment 
of the group prior  
to vesting 
clawback applies to the 
deferred share award 
where it is subsequently 
identified that there  
has been a material 
misstatement of the 
performance which  
led to the award
performance restricted share plan ‘prsp’
to incentivise delivery of 
sustained growth through 
superior longterm 
performance provide an 
element of retention and 
increase alignment with 
shareholders
discretionary annual award of nominal cost options 
vested options are exercisable immediately following 
confirmation of performance
at the discretion of the committee vested options attract 
dividend accrued shares between award and vesting
under the rules of the prsp  conditional share awards  
may also be granted although there is currently no plan  
to grant such awards
nonpensionable
annual award of nominal cost 
options up to a maximum of  
200 of salary
performance condition is 
measured over three financial 
years
the performance condition 
has two elements each with 
equal weighting eps growth 
and total shareholder return 
tsr relative to a peer group 
of comparator companies
for each element 25 of the 
award will vest for threshold 
performance 100 of the 
award will vest for maximum 
performance straight line 
vesting applies between 
threshold and maximum
the committee has the 
discretion to amend the 
measures andor the targets 
to reflect business need it is 
intended that any change will 
not result in targets which are 
materially less stretching
the award may be 
subject to forfeiture 
where the participant 
leaves the employment 
of the group prior  
to vesting 
52
mitchells  butlers plc annual report and accounts 2013 purpose and  
link to strategy operation opportunity
performance  
metrics
recovery or  
withholding
allemployee share plans
to underpin the employee 
engagement strategy and 
encourage employees to  
have a financial stake in the 
future of the company
all eligible employees can participate in the hm revenue  
 customs ‘hmrc’ approved sharesave and sip 
sharesave all eligible employees can save between £5  
and £250 per month over a three or five year maturity 
period proceeds from the savings contract may be used  
to acquire shares in the company at an option price fixed  
at the date of invitation 
sip all eligible employees are invited to participate  
a free share award is made annually free shares are 
typically held in trust for at least three years in addition 
eligible employees may purchase from their gross pay 
partnership shares partnership shares are held in trust 
and can be released at any time income tax and national 
insurance contributions are normally payable on the value 
of shares released within five years of purchase 
the committee has discretion under the sip rules to 
operate matching shares and dividend shares elements 
although there is currently no plan to do so 
sharesave maximum savings of 
£250 per month over a three or 
five year maturity period
sip maximum free share award 
with a value of £1500 per tax 
year partnership shares with an 
initial value of up to £1500 per  
tax year
sharesave no performance 
metrics apply
sip no performance  
metrics apply
sharesave  
no recovery or 
withholding applies
sip no recovery or 
withholding applies
pension or cash allowance
to provide a marketaligned 
retirement benefit
defined contribution scheme or cash allowance in lieu  
of company pension contributions once statutory limits 
fixed protection and annual allowance are reached or  
a combination of both
where as a result of fixed protection the executive  
director is unable to join the pension plan a cash allowance 
equivalent to the net cost to the company of 20 of base 
salary applies
see page 61 for further detail on pension where the  
annual allowance or fixed protection apply 
the company contribution is a 
maximum of 20 of base salary
the maximum cash allowance is 
equivalent to the net ie after 
deduction of employers’ national 
insurance contributions cost to 
the company of an equivalent 
pension contribution
no performance metrics 
apply
the trust deed and rules 
of the executive pension 
plan provide the plan 
trustees with a power to 
deduct the value of any 
unpaid contributions 
from the pension 
benefits of any member 
whose contributions are 
in arrears the trustees 
may also repay scheme 
funds to the company  
in the event that the 
trustees are required to 
make such a payment as 
a result of the criminal 
conduct negligence or 
fraud of any member of 
the scheme
other benefits
to provide marketaligned 
benefits
benefits include private healthcare life assurance annual 
health check employee assistance programme use of a 
company vehicle or cash equivalent and discounts on 
food and associated drinks purchased in our businesses 
private healthcare is provided for the executive spouse  
or partner and dependent children
pension plan members and eligible employees who are 
prevented from joining the plan as a result of holding fixed 
protection have life assurance cover of 6x plan pay other 
non members have life assurance cover of 1x plan pay
discount vouchers are provided on the same basis to all 
employees and can be redeemed in any of our managed 
businesses provided the purchase is a personal not a 
business expense
relocation or the temporary provision of accommodation 
may be offered where the company requires a director  
to relocate 
in line with market practice no performance metrics 
apply
no recovery or 
withholding applies
a

shareholding policy
to align the interests of the 
executive directors with 
shareholders and promote  
a longterm approach
executive directors are required to hold mitchells  
butlers’ shares to the value of a minimum of one times 
salary within five years of appointment to the board
except for those sold to cover the subscription cost 
together with the associated income tax and national 
insurance contributions executive directors will  
normally be required to retain shares arising from share 
schemes until the minimum level of ownership required  
has been achieved
only shares owned outright by the executive director or  
a connected person are included shares or share options 
which are subject to a performance condition are not 
included deferred shares and options which are vested 
but unexercised are also not included
where the shareholding requirement is not met within  
five years of appointment the committee retains the 
discretion dependent on circumstances to either  
extend the time period or approve on a temporary basis  
a lower shareholding
na na na
a a proportion of any relocation costs may be recovered where a director leaves the employment of the group within two years of appointment or date of relocation 
53
mitchells  butlers plc annual report and accounts 2013
company overview 01 – 05 strategic and business review 07 – 34 governance 35 – 64 financial statements 65 – 106 shareholder information 107 – 108 report on directors’ remuneration
continued
notes to the policy table 
table 1 summarises the reasons behind the selection of the performance metrics and sets out the categories of employee other than executive 
directors who are eligible to participate in each scheme table 2 compares the remuneration and benefits received by executive directors with that 
received by other group employees
table 1
element notes
annual performance bonus eps was chosen as the annual bonus measure as it aligns the interests of shareholders and executives performance targets are determined annually by the 
committee with on target performance being set in line with the company’s annual budget
all salaried employees participate in a bonus scheme save for certain operational and operational support roles where some or all of the annual bonus 
relates directly to the performance of the business or area for which the participant is responsible a common eps annual bonus target and weighting apply 
across all participating employees
retail staff do not participate in any bonus scheme
prsp around 60 senior employees including executive directors and members of the executive committee participate in the prsp  no longterm incentive plans 
apply for any other employees
eps was chosen as it is a measure of overall profitability of the business for investors over the long term and therefore is a fundamental element of aligning 
shareholders’ interests with those of executives
tsr was chosen as relative tsr performance provides a measure of longterm success of the company relative to the market in which it operates this part 
of the award is also subject to a share price underpin and may only be exercised where the mitchells  butlers’ share price has equalled or exceeded the 
share price at the date of award within six months of vesting if this condition is not met then the vested tsr element of the option will lapse
table 2
remuneration and benefits
provision of company  
car or cash alternative
a company car or cash alternative is provided only where it is determined that there is a commercial requirement or business need to do so
private healthcare the majority of employees entitled to receive private healthcare do so on an employee only basis private healthcare is not provided to assistant 
management appointed on or after 30 september 2012 or to retail staff employees
health check a company funded health check is available on request to senior and middle management retail support employees other salaried employees have  
access to online health and wellbeing support through the company’s employee assistance programme ’eap’ 
employee assistance 
programme 
the eap is available to all salaried employees and provides employees with confidential health and wellbeing help and support the eap is not available  
to retail staff
pension the company contribution to the dc choice pension plan is between 45 and 15 of base salary assistant management and retail staff employees  
who are not eligible for the dc choice pension receive a company contribution of either 1x the member contribution up to 3 of qualifying earnings  
assistant management scheme or the statutory minimum automatic enrolment scheme
life assurance assistant management and retail staff employees who are not eligible to join the dc choice pension plan do not have life assurance
relocation relocation may be made available to retail support centre employees where the company requires an employee to relocate for business purposes 
relocation is not normally provided to retail management or retail staff
discount vouchers the discount voucher scheme is approved by hmrc as the amount payable by the employee after application of the discount exceeds the cost of goods  
the scheme is not considered to be a benefit in kind for tax purposes
other benefits other benefits such as childcare vouchers bike to work and private dental cover are not listed above as a taxable benefit to the executive directors  
where an executive director participates he does so at his own cost as the benefit is administered by but not funded by the company nicwise a  
national insurance efficient way for a member to make contributions to the pension plan is provided at no cost to the employee or company the range  
of benefits offered to executive directors is offered to all senior management employees of the group
shareholding policy the shareholding policy is only in place for executive directors
 as defined by legislation
the table below summarises each element of the remuneration policy applicable to nonexecutive directors
purpose and  
link to strategy operation opportunity
performance  
metrics
recovery or  
withholding
fees
to attract and retain 
nonexecutive directors  
of appropriate calibre and 
experience
payable in cash fourweekly throughout the year
fees are normally reviewed annually with any increase 
usually taking effect from 1 january each year
determined by the company chairman and  
executive board by reference to companies of similar  
size and complexity as well as time commitment and 
responsibilities nonexecutive directors receive a  
base fee and an additional fee for chairing a committee 
details are set out on page 59
where a non executive  
director undertakes additional 
responsibilities other than the 
chairing of a committee additional 
fees may be set
no performance  
metrics apply
no recovery or 
withholding applies
nonexecutive directors do not participate in the company’s bonus arrangements share schemes benefit schemes other than the allemployee 
discount voucher scheme or pension plans
54
mitchells  butlers plc annual report and accounts 2013 illustrations of application of remuneration policy
a key principle of the group’s remuneration policy is that variable short and longterm reward should be linked to the financial performance of the 
group the charts below show the composition of each executive director’s remuneration at minimum ontarget and maximum performance
ceo
0
500
1000
1500
2000
2500
100 546
227
476
238
227
286
631
1156
2206
minimum ontargetmaximum
£000
finance director
0
500
1000
1500
2000
2500
100 589
169
387
276
242
337
8522
502
14908
minimum ontargetmaximum
£000
 fixed pay
 shortterm incentives
 longterm incentives
the performance scenarios demonstrate the proportion of maximum remuneration which would be payable in respect of each remuneration element 
at each of the performance levels in developing these scenarios the following assumptions have been made
minimum
only the fixed elements of remuneration are payable the fixed element consists of base salary benefits and pension base salary is the salary 
effective at 28 september 2013 benefits are as detailed in the directors’ remuneration table on page 58 pension is the cash allowance andor 
company pension contribution payable in respect of base salary 
 
target
reflects the amount payable for ontarget performance under the short and longterm incentive plans being
• 50 of base salary under the shortterm incentive plan and 
• 25 of the award 50 of base salary for the ceo and 35 of base salary for the finance director under the longterm incentive plan
maximum
maximum payment is achieved under both the short and longterm incentive plans such that 
• 100 of base salary is payable under the shortterm plan and 
• 200 of base salary for the ceo and 140 for the finance director vests under the longterm incentive plan
a breakdown of the elements included in the application of remuneration policy charts is shown in the table below
 
fixed £000 shortterm plan £000 longterm plan £000
base pay benefits pension total fixed on target maximum on target maximum
ceo 5250 140 920 6310 2625 5250 2625 1050
finance director 4120 140 760
a
5020 2060 4120 1442 5768
a comprising employer’s contribution of £29538 and cash supplement of £46452
55
mitchells  butlers plc annual report and accounts 2013
company overview 01 – 05 strategic and business review 07 – 34 governance 35 – 64 financial statements 65 – 106 shareholder information 107 – 108 report on directors’ remuneration
continued
service contracts
executive directors’ contracts
the table below summarises key elements of the service contracts 
applicable to executive directors
notice period • executive directors are employed under service 
contracts that may be terminated by the company 
at any time on one year’s notice
• any payment made in lieu of notice will comprise 
base salary only
a
 and be payable in instalments in 
line with the established salary payment dates until 
the expiry of the notice period or if earlier the 
date on which alternative employment is secured
termination • where an executive director’s employment with 
the group ends for reasons of resignation or 
dismissal any entitlement to annual bonus in 
respect of the year in which the employment 
terminated will be forfeit unless by exception the 
committee considers it appropriate to pay a pro
rated bonus for the period of service in the year 
any bonus due in respect of the prior year will also 
be forfeit if payment has not been made at the 
point of resignation or dismissal by exception the 
committee may consider it appropriate to pay 
bonus due in respect of a prior year 
• unless the committee determines otherwise  
an executive director who resigns from the 
employment of the group or who is dismissed  
will lose his entitlement if any to vesting and if 
applicable exercise of vested options under each 
of the discretionary prsp and stdip share plans 
• where employment with the group is ended for 
reasons of illhealth injury disability retirement 
redundancy death or as a result of the sale of the 
business or company by which the executive 
director is employed any unvested award under 
the prsp  andor the stdip will unless the 
committee decides otherwise be prorated for 
both time served and performance against the 
relevant targets vested awards must be exercised 
within six months of the date on which 
employment with the group terminated 
• the committee has no discretion in relation to 
shares or options held under the allemployee 
share plans sip and sharesave on termination 
these will vest become exercisable or lapse in 
accordance with hmrcapproved rules
a  this arrangement applies to alistair darby any payments in lieu of notice in respect of 
tim jones whose appointment and service contract predates 27 june 2012 the relevant 
date for the purposes of the new regulations and does not fall within the current policy 
will comprise base salary and contractual benefits
in the event that the company terminates an executive director’s service 
contract other than in accordance with the terms of his contract the 
committee will act in the best interests of the company and ensure 
there is no reward for failure when determining what compensation  
if any is to be paid to the departing executive director the committee 
will give full consideration to the circumstances of the termination the 
executive director’s performance the terms of the service contract 
relating to notice and payments in lieu of notice and the obligation of that  
executive director to mitigate any loss which he may suffer as a result 
although the company would seek to minimise termination costs the 
committee may in appropriate circumstances provide other elements in 
a leaving director’s termination package including without limitation 
compensation for the waiver of statutory rights in exchange for the 
director executing a settlement agreement payment of the leaving 
director’s legal fees in connection with his termination arrangements 
and payment of outplacement fees in addition the committee  
may determine that the director should continue to be engaged by  
the company on consultancy or other terms following cessation of  
his directorship
details of the service contracts of executive directors who served during 
fy 2013 are set out below
director
contract
start date
unexpired
term
notice period
from company
minimum
notice period
from director
compensation
on change
of control
alistair 
darby 081012 indefinite 12 months 6 months no
tim  
jones 181010
a
indefinite 12 months 6 months no
doug 
evans 261011
b
 nil
c
 12 months 6 months no
a tim jones’ service contact predates the new regulations
b replaced original contract of 17 january 2011
c  mr evans left the employment of the group on 31 january 2013 no termination 
payments were or are due to be made
executive directors may accept one external nonexecutive appointment 
with the company’s prior approval as long as this is not likely to lead  
to conflict fees received may be retained by the executive director  
no such nonexecutive appointments have applied in the year to  
28 september 2013
nonexecutive directors
nonexecutive directors including the company chairman do not have 
service contracts but serve under letters of appointment which provide 
that they are initially appointed until the next agm when they are 
required to stand for election in line with requirement b7 1 of the code 
and the company’s articles all directors including nonexecutive 
directors will stand for reelection at the 2014 agm nonexecutive 
directors’ appointments are terminable without notice and with no 
entitlement to compensation payment of fees will cease immediately on 
termination the dates of appointment of the nonexecutive directors 
to the committee are set out on page 57 
douglas mcmahon and ron robson were appointed to the board under 
the piedmont deed of appointment information on which is set out on 
page 38 
copies of both the individual letters of appointment for nonexecutive 
directors and the service contracts for executive directors are available 
at the registered office of the company during normal business hours 
and will be available to shareholders to view at the 2014 agm
56
mitchells  butlers plc annual report and accounts 2013 recruitment of executive directors
where it is necessary to appoint a replacement or additional executive 
director the committee will set a base salary appropriate to the 
experience and responsibilities of the new appointee
the maximum level of variable pay consistent with the plans approved 
by shareholders at the january 2013 agm is 400 of base salary  
200 in relation to annual cash bonusstdip and 200 in relation  
to the prsp benefits pension company vehicle or cash allowance 
healthcare life assurance health check and where applicable relocation 
assistance would be consistent with the principles of the policy as set 
out on pages 52 to 54
in the event that a buyout award is necessary to secure the services  
of an executive director then the structure of the award will mirror as  
far as is possible the arrangements in place at the incoming executive 
director’s previous employer and may include cash andor an award of 
shares any share awards made outside of the company’s existing plans 
may have no or different performance conditions or a shorter vesting 
period compared to the company’s existing plans shareholders will  
be informed of any buyout arrangements at the time of the executive 
director’s appointment 
recruitment of nonexecutive directors
chairman 
the committee will recommend to the board a fee appropriate to the 
experience and responsibilities of the new appointee
other nonexecutive directors
the fee will be set in line with the fee structure for nonexecutive 
directors in place at the date of appointment
consideration of employment conditions elsewhere in  
the group
the committee is regularly updated on pay and conditions applying to 
group employees and is responsible for approving the variable pay 
structure for all group employees details are provided for information  
at committee meetings normally on an annual basis where significant 
changes are proposed these are highlighted for the attention of the 
committee at an early stage the committee is informed of the base  
pay review budget applicable to other employees and is cognisant of 
changes to the national minimum wage when considering the pay of 
executive directors
employees are not specifically consulted on executive remuneration  
all employees are however invited to take part in our annual your say 
employee engagement survey in which they have an opportunity to 
provide anonymous feedback on a wide range of topics of interest or 
concern to them the results of the survey are reviewed by the board 
any significant concerns over remuneration would be considered 
separately by the committee in meeting and if appropriate accounted 
for when determining the remuneration policy
 
annual report
committee membership and operation
committee members were appointed on 11 july 2013 from that date 
imelda walsh was appointed as committee chair committee members 
are listed below
name
date of 
appointment name
date of 
appointment
imelda walsh chair 11 july 2013 bob ivell 11 july 2013
colin rutherford 11 july 2013 ron robson 11 july 2013
stewart gilliland 11 july 2013 eddie irwin 11 july 2013
 independent nonexecutive directors
during the year the committee has received external advice from 
pricewaterhousecoopers llp ‘pwc’ on prsp performance measures 
salary benchmarking for senior employees and general remuneration 
advice pwc were appointed in 2010 following an independent review  
of advisers fees payable to pwc in respect of remuneration advice  
in the reporting year totalled £43300 in addition during fy 2013  
pwc undertook work in the following areas internal audit project 
assurance and vat pwc also provides pensions audit advice to the 
pension trustees
advice was also received from the company’s general legal  
advisers freshfields bruckhaus deringer llp ‘fbd’ on the operation  
of the company’s employee share schemes and on corporate 
governance matters 
the committee is satisfied that the advice received from its advisers  
was objective and independent 
the committee determines the policy and individual remuneration 
package for each executive director and the company chairman  
in addition the committee makes recommendations to the board on  
any new longterm incentive plans but such plans are approved by the 
board as a whole and where necessary by shareholders 
members of management including susan martindale the group hr 
director and craig provett the director of compensation  benefits are 
invited to attend meetings on remuneration matters where appropriate 
they are not present when matters affecting their own remuneration 
arrangements are decided the company chairman does not attend 
board or committee meetings when his remuneration is under review 
alistair darby and tim jones were present at meetings where the 
company’s share schemes long and shortterm incentive arrangements 
and pension plan were discussed however each declared an interest in 
the matters under review and did not participate in the discussion
statement of voting at general meeting 
the committee is pleased that last year the remuneration report 
received a 9904 shareholder vote in favour as set out below
votes 
cast
votes 
for
a

votes
against 
votes
withheld
b
349030436 345676383 9904 3354053 096 2398879
a the ‘for’ vote includes those giving the company chairman discretion
b  a vote withheld is not a vote in law and is not counted in the calculation of the votes  
‘for’ or ‘against’ the resolution
votes ‘for’ and ‘against’ are expressed as a percentage of votes cast 
pay outcomes
the tables and related disclosures set out on pages 58 to 61 on directors’ 
remuneration stdip  2010 ltip  share options share incentive plan and 
pension benefits have been audited by deloitte llp 
57
mitchells  butlers plc annual report and accounts 2013
company overview 01 – 05 strategic and business review 07 – 34 governance 35 – 64 financial statements 65 – 106 shareholder information 107 – 108 report on directors’ remuneration
continued
directors’ remuneration
the tables below set out the single figure remuneration received by the executive directors and the nonexecutive directors during the reporting 
year details of performance under the annual bonus measure are set out on page 59
executive directors
basic 
salaries benefits
a
shortterm 
incentives
b
cash paid 
in lieu of 
contribution to 
pension plan
total 
emoluments
longterm 
incentives
c
employer’s 
contribution to 
pension plan
total 
remuneration
£000 £000 £000 £000 £000 £000 £000 £000 £000
2013 2012 2013 2012 2013 2012 2013 2012 2013 2012 2013 2012 2013 2012 2013 2012
alistair darby
d
513 – 14 – 365 – 90 – 982 – – – – – 982 –
tim jones 408 404 14 14 290 – 46 44 758 462 – – 30 31 788 493
doug evans
e
87 233 5 17 – – 3 10 95 260 – – 14 35 109 295
sub total 
executive 
directors  1008 637 33 31 655 – 139 54 1835 722 – – 44 66 1879 788
nonexecutive directors
fees benefits
a
total 
emoluments
total 
remuneration
£000 £000 £000 £000 £000
2013 2012 2013 2012 2013 2012 2013 2012
bob ivell
f
319 582 – – 319 582 319 582
ron robson
g
188 203 7 76 195 279 195 279
stewart gilliland
h
18 – – 18 – 18 –
eddie irwin 50 27 – 50 27 50 27
douglas e 
mcmahon 50 51 – 50 51 50 51
colin rutherford
i
24 – – 24 – 24 –
imelda walsh
i
24 – – 24 – 24 –
other
j
– 86 – – 86 – 86
sub total non
executive 
directors  673 949 7 76 680 1025 680 1025 
total executive 
directors and  
nonexecutive 
directors 1681 1586 40 107 655 – 139 54 2515 1747 – – 44 66 2559 1813
figures shown for 2012 are for a 53 week financial year
 or from date of appointment to the board if this was on or after 25 september 2011
a excludes the award of free shares under the allemployee sip as set out on page 61 £2997 in respect of tim jones
b  the shortterm incentives are granted in the form of an annual bonus 50 is paid in cash and the remainder is deferred into shares and is subject to the rules of the stdip  the deferred  
remuneration is not subject to a performance condition see page 52
c  the longterm incentives are in the form of awards under the prsp  see page 60 for details of the performance condition weighting and performance period applicable to such awards 
d alistair darby was appointed to the board on 8 october 2012 
e doug evans left the employment of the group on 31 january 2013
f bob ivell stepped down as executive chairman and resumed the role of nonexecutive chairman from 12 november 2012
g  benefits relate to the reimbursement of taxable expenses and the provision of serviced accommodation the prior year total includes £7 716 in respect of expenses incurred but unclaimed 
in the financial year ended 24 september 2011
h stewart gilliland was appointed to the board on 23 may 2013
i colin rutherford and imelda walsh were appointed to the board on 22 april 2013
j in respect of jeremy blood who retired from the board on 26 october 2011
executive directors’ salaries
tim jones’ salary was reviewed from 1 january 2013 based on performance an increase of 3 from £400000 to £412000 was awarded  
alistair darby’s salary £525000 has remained unchanged since his appointment in october 2012
there were no payments made to former directors during the year and no payments were or are due to be made in respect of loss of office 
58
mitchells  butlers plc annual report and accounts 2013 nonexecutive directors’ fee level and structure
from july 2013 the fee structure applicable to the nonexecutive directors was amended as set out below 
dates
basic fee 
£
committee 
chair fee
£
committee
 member fee
£
from 31 january 2011 to 10 july 2013 50000 8000 6000
from 11 july 2013 to date 50000 10000 –
 not applicable to nomination committee the committee member fee was payable in addition to the committee chair fee 
no committee membership or chair fee was paid in the reporting year up to 10 july 2013 as the matters to be determined by the committee were 
determined by the board 
chairman 
bob ivell resumed the role of nonexecutive chairman from 12 november 2012 on the same terms as applied prior to his taking up the executive 
chairman role being a fee of £275000 per year terminable by either party at any time without notice and without compensation 
deputy chairman
ron robson has served as deputy chairman since 14 july 2011 until 31 august 2013 mr robson’s annual fee was £200000 from 1 september 2013 
his annual fee reduced to £50000 per year in line with the policy applicable to other nonexecutive directors
annual performance bonus and stdip
the annual bonus and stdip operate as set out in the policy section of this report details of the 2013 stdip are set out below
annual bonus performance measure performance  of base salary payable
adjusted earnings per share eps target 335p 50
maximum 110 of target 369p 100
 bonus is payable on a straight line basis between target and maximum
the group delivered eps of 349p being 1042 of target performance resulting in bonus payments of 71 of executive directors’ base salary
half of the bonus earned by each of the executive directors was deferred into a conditional award of bonus under the terms of the stdip  
shares are released in two equal amounts 12 and 24 months after deferral the ‘release dates’ 
if a participant leaves the employment of the group before the release date then unless termination is on the grounds of illhealth injury disability 
retirement redundancy death or as a result of the sale of the business or company by which the executive director is employed he may lose 
entitlement to deferred shares as well as to any dividend accrued shares unless the committee determines otherwise
performance measurement under the annual performance bonus is reviewed and certified by the company’s auditor deloitte llp  
as no annual bonus was payable in respect of performance in fy 2012 no deferred award was made under the stdip in the reporting year
longterm incentives
longterm incentive plan 2010 ‘2010 ltip’
all participants in the 2010 ltip cancelled without payment their rights to any vesting under that plan and the 2010 ltip was closed in  
february 2013
details of awards made in prior years to participating executive directors and which have subsequently lapsed or been cancelled are set out below 
end of year 
to which
 performance
 is based
 for award
maximum 
2010
ltip share
 awards 
held at 
290912 awarded
award
 date
market
 price at 
award p
performance 
condition 
determination 
date
actual
 planned 
vesting date
maximum 
2010
ltip share
 awards 
held at 
280913 
director
tim jones 2013 nil a 291110 3456 290713 b nil
former director
doug evans 2013 nil a 170111 3514 290713 b nil
a the participation percentage of the ltip pool in respect of tim jones was 464 and in respect of doug evans it was 338
b  mr jones cancelled without payment his entitlement to any award under the 2010 ltip in february 2013 mr evans’ entitlement lapsed when he left the employment of the group on  
31 january 2013
59
mitchells  butlers plc annual report and accounts 2013
company overview 01 – 05 strategic and business review 07 – 34 governance 35 – 64 financial statements 65 – 106 shareholder information 107 – 108 report on directors’ remuneration
continued
longterm incentive awards made in fy 2013 
following approval by shareholders at the january 2013 agm of the performance restricted share plan ‘prsp’ an award was made in accordance 
with the details set out in the policy section of this report
the independent elements of the performance measure for the february 2013 award each of which accounts for 50 of the award are  
summarised below
threshold vesting target maximum vesting target
1  compound annual adjusted earnings per 
share ‘eps’ growth measured before 
exceptional items and other adjustments
25 will vest if the compound annual eps  
growth is 8
100 will vest if compound annual eps growth  
is at least 16
2  total shareholder return tsr relative to  
a peer group of comparator companies
25 will vest for tsr performance equivalent  
to the median of the comparator group
100 will vest for tsr performance equivalent  
to the median of the comparator group x 135
the tsr element of the award is also subject to a share price underpin and may only be exercised where the mitchells  butlers share price has 
equalled or exceeded the share price at the date of award within six months of the vesting date if this condition is not met then the vested tsr 
element of the option will lapse
 between threshold and maximum vesting under each measure is on a straight line basis below threshold the award will lapse
 enterprise inns punch taverns fuller smith  turner greene king marston’s whitbread j d wetherspoon spirit pub company and the restaurant group
eps and tsr targets were set by the committee having taken advice from pwc its independently appointed adviser and following consultation  
with shareholders and their representative bodies 
performance measurement under the prsp  which is not retested is reviewed and certified by the company’s auditor 
around 60 senior employees participate in the prsp the award level varies by job category ranging from 50 of base salary for the majority up to 
200 for the ceo details of awards made to executive directors under the prsp are set out below
maximum
 potential
 shares 
held at 
290912
 options
 awarded
 during the
 year to
 280913
basis 
of award 
 of basic
 annual
 salary
award 
date
market 
price per
 share at
 award
date p
lapsed 
during
 fy 2013
exercised
 during
 fy 2013
market 
price per
 share at
 exercise
 p
value at
 exercise 
£
actual
planned 
vesting
 date
maximum
 potential
 options 
held at
 280913
latest 
lapse
 date
face 
value 
£
expected
 value
 based 
on share
 price of
 4097p at
 280913 
£
executive 
directors
alistair 
darby – 307210 200 190213 3396 – – – – 241115 307210 241117 1043285 314652
tim jones – 169846 140 190213 3396 – – – – 241115 169846 241117 576797 173962
total 477056       477056 1620082 488619
  face value is the maximum number of shares that would vest if the performance measure as described above is met in full multiplied by the middle market quotation of a  
mitchells  butlers share on the business day immediately preceding the award
 expected value is based on achievement of threshold performance 25 vesting of each element less £1 exercise price   
the aggregate option price of each award is £1 
allemployee sharesave and sip
an award was made under each of the hmrcapproved allemployee share plans in line with the detail set out on page 53
a grant under the sharesave scheme was made in june 2013 executive directors’ entitlements under the sharesave schemes are set out on page 61 
a free share award under the sip was made in june 2013 executive directors’ entitlements under the sip are also set out on page 61
tim jones has participated in the partnership share element of the sip since its launch in october 2012 doug evans was also a participant until his 
employment with the group ended in january 2013 executive directors’ entitlements under the partnership share element of the sip are set out  
on page 61
60
mitchells  butlers plc annual report and accounts 2013 the tables below show directors’ share options under the sharesave and shares under the sip 
sharesave
 ordinary shares under option
date of 
grant
opening
 balance
 300912
granted
 during 
period
vested 
during 
period
exercised
 during 
period
lapsed
 during 
period
closing
 balance at
 280913
a
option 
price 
p
market 
share price
 on date of 
exercise
earliest
 exercise
 date
last 
expiry
 date
director
tim jones 200612 4945 – – – – 4945 1820 – 011015 310316
total 4945 – – – – 4945 – – – –
former director
doug evans 200612 8241 – – – 8241
b
 – 1820 – – –
total  8241 – – – 8241 – – – – – 
a or date of termination of employment if earlier
b lapsed on 31 january 2013 when mr evans’ employment with the group ended
sip 
as at 28 september 2013 or date of leaving if earlier the executive directors had the following entitlements under the free share element of the  
allemployee sip  
shares 
held at 
290912
shares 
awarded
during 
the year 
300912 
to 280913
award
 date
market
price per
share
 at award
 p
normal 
vesting
 date
market 
price per 
share at 
normal 
vesting date
 p
shares 
held at 
280913
a
 
director
tim jones 1204 – 200612 2493 200615 – 1204
– 800 280613 3746 280616 – 800
total 1204 800 – – – – 2004
former director
doug evans 769
b
– 200612 2493 200615 – 769
b
total 769 – – – – – 769
a or date of termination of employment if earlier
b lapsed on 31 january 2013 when mr evans’ employment with the group ended
directors’ pension benefits
pension or cash allowance
tim jones participates in the defined contribution section of the mitchells  butlers executive pension plan the ‘plan’ under the plan executive 
directors’ contributions of up to 5 of salary are matched on a four times basis by the company doug evans also participated in the plan until his 
employment with the group ended on 31 january 2013
as an alternative to the company’s contribution to the plan a member who has i aggregate pension savings at or above the lifetime allowance 
threshold £15m in tax year 201213 and 201314 or ii who has fixed protection or iii whose combined employee and company contributions 
to the plan would otherwise be in excess of the annual allowance £50000 in tax year 201213 and 201314 may elect to receive a cash allowance 
equivalent to the net cost to the company of the contribution which would otherwise have been made to the plan
the plan provides for a normal pension age of 60 and in the event of death there is life assurance cover of up to six times plan pay the plan also 
provides for full and partial incapacity benefit where the member is unable to continue in employment due to ill health active members of the plan 
have the option to pay additional voluntary contributions
alistair darby is not a member of the plan mr darby receives a cash allowance equivalent to the net cost to the company of a 20 of base  
salary contribution
company contribution £ cash allowance £
directors
alistair darby – 90245
tim jones 29620 2012 30725 45647 2012 44036
former director
doug evans 13512 2012 35080    3125 2012 10208
61
mitchells  butlers plc annual report and accounts 2013
company overview 01 – 05 strategic and business review 07 – 34 governance 35 – 64 financial statements 65 – 106 shareholder information 107 – 108 directors’ interests
to align the interest of the executive directors with shareholders and promote a longterm approach the company operates the following 
shareholding guidelines
• executive directors are expected to hold mitchells  butlers’ shares to the value of a minimum of one times salary within five years of 
appointment to the board
• except for those sold to cover the subscription cost together with the associated income tax and national insurance contributions executive 
directors will normally be required to retain shares arising from share schemes until the minimum level of ownership required has been 
achieved and
• only shares owned outright by the executive director or a connected person are included shares or share options which are subject to  
a performance condition are not included deferred bonus shares and options which are vested but unexercised are also not included
where the shareholding requirement is not met within five years of appointment the committee retains the discretion dependent on circumstances 
to either extend the time period or approve on a temporary basis a lower shareholding
based on the share price on 28 september 2013 of 4097pence alistair darby’s shareholding was 0604 times his basic annual salary and tim jones’ 
shareholding was 009 2012 003 times his basic annual salary 
the interests of the directors in the ordinary shares of the company as at 28 september 2013 and at 29 september 2012 or date of appointment if 
later were as set out below
shares without 
performance conditions
shares with
performance conditions
unvested options 
awards without  
performance conditions
unvested options 
awards with  
performance conditions
vested but  
unexercised options
total 
sharesoptions
28092013 29092012
a
28092013 29092012
a
28092013 29092012
a
28092013 29092012
a
28092013 29092012
a
28092013 29092012
a
executive 
directors 
alistair darby 77423 – – – – – 307210
d
– – – 384633 –
tim jones 9048
b
4704
b
– – 11466
c
17986
c
169846
d
  – – 190360 22690
former director
doug evans 912
e
769 – – 8241
e
8241 – – – – 9153
e
9010
nonexecutive 
directors            
bob ivell – – – – – – – – – – – –
ron robson – – – – – – – – – – – –
stewart gilliland – – – – – – – – – – – –
eddie irwin 10000 – – – – – – – – – 10000 –
douglas e 
mcmahon – – – – – – – – – – – –
colin rutherford – – – – – – – – – – – –
imelda walsh – – – – – – – – – – – –
total 97383 5473 – – 19707 26227 477056 – 594146 31700
a or date of appointment if later
b includes free shares and partnership shares granted under the sip  as detailed on page 61
c options granted under the sharesave as detailed in the table on page 61 and any award granted under the stdip 
d options granted under the prsp as detailed in the table on page 60
e at 31 january 2013 the date on which mr evans left the employment of the group
no share options were exercised in the year by either alistair darby or tim jones
directors’ shareholdings shares without performance conditions include shares held by connected persons
the above shareholdings are beneficial interests and are inclusive of directors’ holdings under the share incentive plan both free share and 
partnership share elements
under the partnership share element of the share incentive plan tim jones has acquired 58 shares of the company between the end of the  
financial year and one month prior to the notice of the annual general meeting 
none of the directors has a beneficial interest in the shares of any subsidiary or in debenture stocks of the company or any subsidiary
the market price per share on 28 september 2013 was 4097 pence and the range during the year to 28 september 2013 was 2895 pence  
to 4600 pence per share
the executive directors as a group beneficially own less than 002 of the company’s shares
report on directors’ remuneration
continued
62
mitchells  butlers plc annual report and accounts 2013 tsr performance graph
the company’s tsr performance for the last five financial years is shown below against the ftse 250 index the ftse 250 index has been 
chosen to show tsr performance as the company is a member of the ftse 250
total shareholder return from 26 september 2008 to 28 september 2013 rebased to 100
2010 2008 2009 2011 2012 2013
mitchells  butlers plc
ftse 250 source datastream
40
60
80
100
120
140
160
180
200
220
ceo fiveyear earnings history
year ended 260909 250910 240911 290912 280913
alistair darby
single figure remuneration £000 – – – – 982
a
annual bonus outcome  of max – – – – 710
ltip vesting outcome  of max – – – – na
b
bob ivell
single figure remuneration £000 – – – 557 69
c
annual bonus outcome  of max – – – na
d
na
d
ltip vesting outcome  of max – – – na
d
na
d
jeremy blood
single figure remuneration £000 – – 397 50 –
annual bonus outcome  of max – – –
e
na
d
–
ltip vesting outcome  of max – – na
d
– –
adam fowle
single figure remuneration £000 237
f
1315 483
g
– –
annual bonus outcome  of max – 876 160 – –
ltip vesting outcome  of max 207 162 242 – –
tim clarke
single figure remuneration £000 385 – – – –
annual bonus outcome  of max – – – – –
ltip vesting outcome  of max – – – – –
a   alistair darby formally took up the position of ceo on 12 november 2012 following a short period of induction and handover the figure shown reflects the date of his appointment  
to the board 8 october 2012
b no longterm incentive plan which is due to vest in respect of the year ended 28 september 2013
c figure shown is up to and including 11 november 2012 as bob ivell remained executive chairman to this date
d  the director was not a participant in the plan
e  jeremy blood was not a participant in the shortterm incentive plan at the discretion of the board a payment of £100000 was made in respect of his contribution as interim  
chief executive this payment is included in the single remuneration figure £397 000 above earnings exclude the fee payable for the period 26 september 2010 to 14 march 2011 
during which mr blood served as a nonexecutive director
f adam fowle was appointed acting ceo from 21 may 2009 and as ceo from 3 august 2009 earnings disclosed above are from the period from 21 may 2009
g earnings disclosed are to 15 march 2011 when mr fowle stepped down as ceo
change in remuneration of the ceo
salary £ taxable benefits £ bonus £
2013 2012  change 2013 2012  change 2013 2012  change
ceo 582534 606467 40 14445 – 100 364580 – 100
salaried 
employees 30419 30025 13 236 208 135 3364 2558 315
the fy 2013 ceo figures shown are the combined earnings of bob ivell whilst executive chairman and alistair darby from the date he was 
appointed to the board the percentage change in salary benefits and bonus is compared to the fy 2012 combined earnings of bob ivell whose  
role was that of executive chairman from 26 october 2011 and jeremy blood who until 26 october 2011 held the role of interim chief executive 
the ceo figures do not include ltip awards or pension benefits as disclosed in the single figure table
the change in ceo remuneration is compared to the change in remuneration of all full time salaried employees which includes general 
managers assistant managers and kitchen managers employed in our businesses salaried employees with part year service in either fy 2012  
or fy 2013 have been excluded from the comparison figures retail staff employees have been excluded from the comparator group as they are 
hourly paid are largely part time and do not participate in any bonus plans
63
mitchells  butlers plc annual report and accounts 2013
company overview 01 – 05 strategic and business review 07 – 34 governance 35 – 64 financial statements 65 – 106 shareholder information 107 – 108 a
relative importance of spend on pay
0
200
400
600
06
164
00
483 480
144
40 40
16
185 182
124
00
wages and salaries pension deficit contributions principal taxes dividend and share buy back debt service
£m
28092013
 fy 2013 – 52 weeks
 fy 2012 – 53 weeks
 from note 6 accounts excludes sharebased payments  
 business rates corporation tax employer’s ni
figures shown for wages and salaries are all earnings including bonus 
in fy 2013 £234m 05 was paid to executive and nonexecutive 
directors 2012 £158m 03 
implementation of remuneration policy in financial year 2014 
executive directors’ salary review
salaries are next due to be reviewed with effect from 1 january 2014 
from this date alistair darby’s salary will be increased to £535500 
2 and tim jones’ salary will be increased to £420250 2
annual performance bonus
the performance measure and vesting schedule are unchanged  
from those which applied in fy 2013 these are set out on page 52 
ontarget performance is defined as performance in line with the 
company’s annual budget the actual eps value is not disclosed in 
advance as the committee considers that such disclosure may be 
advantageous to competitors and as a result could damage the 
company’s commercial interests the eps target and performance 
against it will be disclosed in the annual report in respect of the  
year in which the award vests there is also no change to the  
deferred share element of the annual performance bonus stdip  
for fy 2014
long term incentive plans
an award is due to be made under the prsp on 28 november 2013 
the committee has determined that the performance measures and 
targets applicable to the 2014 award will be unchanged from those 
which applied in 2013 these are set out on page 60 the grant  
levels are also unchanged from those which applied in 2013 
all other aspects of the remuneration structure as intended to apply in 
respect of financial year 2014 are as set out in the remuneration policy 
table on pages 52 to 54 
report on directors’ remuneration
continued
nonexecutive directors’ fee review
nonexecutive directors’ fees are next due to be reviewed on  
1 january 2014 as three of the nonexecutive directors have only 
recently been appointed the board has determined that it would not 
be appropriate to review the fee structure at this time the board may 
choose to review nonexecutive directors’ fees later in fy 2014 as the 
newly appointed directors become more established in their roles 
the fees applicable to the chairman and deputy chairman will next be 
reviewed in january 2015
approved by the board
imelda walsh
chair of the remuneration committee
25 november 2013
64
mitchells  butlers plc annual report and accounts 2013 financial 
statements
in this section
66  independent auditor’ s 
report to the members 
of mitchells  butlers plc
68  group income statement
69  group statement of 
comprehensive income
70  group balance sheet
71  group statement of 
changes in equity
72  group cash flow 
statement
73  notes to the financial 
statements
99  five year review 
  income statement 
information
100  company balance sheet
101  notes to the company 
financial statements
a
company overview 01 – 05 strategic and business review 07 – 34 governance 35 – 64 shareholder information 107 – 108 financial statements 65 – 106
65
mitchells  butlers plc annual report and accounts 2013 independent auditor’s report to the 
members of mitchells  butlers plc
opinion on financial statements of mitchells  butlers plc
in our opinion
• the financial statements give a true and fair view of the state of the 
group’s and of the company’s affairs as at 28 september 2013 and 
of the group’s profit for the 52 weeks then ended
• the group financial statements have been properly prepared in 
accordance with international financial reporting standards 
ifrss as adopted by the european union
• the company financial statements have been properly prepared in 
accordance with united kingdom generally accepted accounting 
practice and
• the financial statements have been prepared in accordance with 
the requirements of the companies act 2006 and as regards the 
group financial statements article 4 of the ias regulation
the financial statements comprise the group and company balance 
sheets the group income statement the group statement of 
comprehensive income the group statement of changes in equity the 
group cash flow statement and the related notes 1 to 29 on the group 
financial statements and the related notes 1 to 10 on the company 
financial statements the financial reporting framework that has been 
applied in the preparation of the group financial statements is applicable 
law and ifrss as adopted by the european union the financial reporting 
framework that has been applied in the preparation of the company 
financial statements is applicable law and united kingdom accounting 
standards united kingdom generally accepted accounting practice
going concern
as required by the listing rules we have reviewed the directors’ 
statement on page 40 that the group is a going concern 
we confirm that
• we have not identified material uncertainties related to events or 
conditions that may cast significant doubt on the group’s ability  
to continue as a going concern which we believe would need to  
be disclosed in accordance with ifrss as adopted by the european 
union and
• we have concluded that the directors’ use of the going concern 
basis of accounting in the preparation of the financial statements  
is appropriate
however because not all future events or conditions can be predicted 
this statement is not a guarantee as to the group’s ability to continue as  
a going concern
our application of materiality
we determined planning materiality for the group to be £9m which is 
approximately 5 of pretax profit before exceptional items and other 
adjustments including impairment these items are excluded due to their 
volatility and this is consistent with the group’s internal and external 
reporting to facilitate a better understanding of the underlying trading 
performance we agreed with the audit committee that we would 
report to the committee all audit differences in excess of £180000  
as well as differences below that threshold that in our view warranted 
reporting on qualitative grounds
an overview of the scope of our audit and our assessment  
of risks of material misstatement
our group audit scope focused on the uk retail operating business and 
uk property business both of which were subject to a full scope audit 
for the 52 weeks ended 28 september 2013 and are managed from the 
same location the uk based divisions account for 100 of the group’s 
noncurrent assets and 97 of the group’s revenue audits of these 
divisions are performed using a local statutory materiality which is lower 
than group materiality 
the assessed risks of material misstatement and the way in which we 
scoped our responses are described below these are the risks that had 
the greatest effect on our audit strategy the allocation of resources in  
the audit and directing the efforts of the engagement team
audit risks and key judgements our response
the key assumptions and  
estimates used in the valuation  
of the pub estate the market  
value is determined with reference 
to judgemental factors such as 
future projected income levels and 
comparable market transactions
we worked with our property 
valuation specialists and 
management’s external  
advisers cbre to challenge the 
methodology as described in note 
14 to the financial statements and 
underlying assumptions to the pub 
estate valuation this included 
assessing the appropriateness of 
any changes to assumptions since 
the prior period and benchmarking 
valuations to comparable market 
transactions where data was 
available we also tested the 
integrity of the data used in the 
valuations by agreeing a sample  
to source data and reviewed post 
period end trading to verify that it 
supported the valuations as at  
28 september 2013
the value of the tax provisions 
recorded in respect of a number  
of uncertain tax positions which 
require judgements in respect of  
the likely outcome of negotiations 
with and enquiries from tax 
authorities 
we utilised our tax specialists to 
appraise the likely outcome of 
technical tax treatments and 
reviewed correspondence  
with the revenue authorities to 
assess the reasonableness of  
the provisions made
the actuarial assumptions used in 
the measurement of the group’s  
net pension liability which are 
inherently judgemental such  
as longterm interest rates  
and inflation
we tested the actuarial 
assumptions used to calculate  
the net pension liability using our 
actuarial specialists to perform  
a critical assessment of the key 
assumptions as described in  
note 8 to the financial statements 
with reference to comparable 
market data
we considered whether the 
restatement of the prior period  
end pension deficit as described  
in note 8 to the financial 
statements appropriately  
applied the recent guidance  
on additional contributions as 
issued by the financial reporting 
review panel
66
mitchells  butlers plc annual report and accounts 2013 our audit procedures relating to these matters were designed in the 
context of our audit of the financial statements as a whole and not to 
express an opinion on individual accounts or disclosures our opinion  
on the financial statements is not modified with respect to any of the risks 
described above and we do not express an opinion on these individual 
matters the audit committee’s consideration of these judgements is  
set out on page 48
opinion on other matters prescribed by the companies  
act 2006
in our opinion
• the information given in the directors’ report and the strategic  
and business review for the 52 week period for which the  
financial statements are prepared is consistent with the financial 
statements and
• the part of the report on directors’ remuneration to be audited  
has been properly prepared in accordance with the companies  
act 2006
matters on which we are required to report by exception
adequacy of explanations received and accounting records
under the companies act 2006 we are required to report to you if  
in our opinion
• we have not received all the information and explanations we 
require for our audit or
• adequate accounting records have not been kept by the company 
or returns adequate for our audit have not been received from 
branches not visited by us or
• the company financial statements are not in agreement with the 
accounting records and returns
we have nothing to report in respect of these matters
directors’ remuneration
under the companies act 2006 we are also required to report if in our 
opinion certain disclosures of directors’ remuneration have not been 
made or the part of the report on directors’ remuneration to be audited 
is not in agreement with the accounting records and returns under the 
listing rules we are required to review certain elements of the report on 
directors’ remuneration we have nothing to report arising from these 
matters or our review
corporate governance statement
under the listing rules we are also required to review the part of the 
corporate governance statement relating to the company’s compliance 
with nine provisions of the uk corporate governance code we have 
nothing to report arising from our review
our duty to read other information in the annual report
under the international standards on auditing uk and ireland  
we are required to report to you if in our opinion information in the 
annual report is
• materially inconsistent with the information in the audited financial 
statements or 
• apparently materially incorrect based on or materially inconsistent 
with our knowledge of the group acquired in the course of 
performing our audit or
• otherwise misleading
in particular we are required to consider whether we have identified  
any inconsistencies between our knowledge acquired during the audit 
and the directors’ statement that they consider the annual report is  
fair balanced and understandable and whether the annual report 
appropriately discloses those matters that we communicated to the  
audit committee which we consider should have been disclosed  
we confirm that we have not identified any such inconsistencies or 
misleading statements
respective responsibilities of directors and auditor
as explained more fully in the directors’ responsibilities statement set  
out on page 41 the directors are responsible for the preparation  
of the financial statements and for being satisfied that they give a true 
and fair view
our responsibility is to audit and express an opinion on the financial 
statements in accordance with applicable law and isas uk and ireland 
those standards require us to comply with the auditing practices board’s 
ethical standards for auditors
this report is made solely to the company’s members as a body in 
accordance with chapter 3 of part 16 of the companies act 2006 our 
audit work has been undertaken so that we might state to the company’s 
members those matters we are required to state to them in an auditor’s 
report and for no other purpose to the fullest extent permitted by law 
we do not accept or assume responsibility to anyone other than the 
company and the company’s members as a body for our audit work  
for this report or for the opinions we have formed
scope of the audit of the financial statements
an audit involves obtaining evidence about the amounts and disclosures 
in the financial statements sufficient to give reasonable assurance that 
the financial statements are free from material misstatement whether 
caused by fraud or error this includes an assessment of whether the 
accounting policies are appropriate to the group’s and company’s 
circumstances and have been consistently applied and adequately 
disclosed the reasonableness of significant accounting estimates made 
by the directors and the overall presentation of the financial statements 
in addition we read all the financial and nonfinancial information in  
the annual report to identify material inconsistencies with the audited 
financial statements and to identify any information that is apparently 
materially incorrect based on or materially inconsistent with the 
knowledge acquired by us in the course of performing the audit  
if we become aware of any apparent material misstatements or 
inconsistencies we consider the implications for our report
stephen griggs 
senior statutory auditor
for and on behalf of deloitte llp
chartered accountants and statutory auditor
london united kingdom
25 november 2013
67
mitchells  butlers plc annual report and accounts 2013
company overview 01 – 05 strategic and business review 07 – 34 governance 35 – 64 financial statements 65 – 106 shareholder information 107 – 108 group income statement
for the 52 weeks ended 28 september 2013
2013 
52 weeks
2012 
53 weeks
notes
before 
exceptional 
items 
and other 
adjustments 
£m
exceptional 
items and 
other 
adjustments
a
 £m
total
 £m
before 
exceptional 
items
and other 
adjustments
£m
exceptional 
items and 
other 
adjustments
a
 
£m
total
 £m
revenue 3 1895 – 1895 1889 – 1889 
operating costs before depreciation 
amortisation movements in the valuation of 
the property portfolio and impairment of 
goodwill 4 9 1473 – 1473 1474 20 1494
ebitda
b
422 – 422 415 20 395 
depreciation amortisation movements in the 
valuation of the property portfolio and 
impairment of goodwill 4 9 110 29 139 111 52 163
operating profitloss 3 312 29 283 304 72 232 
finance costs 10 130 – 130 140 – 140
finance revenue 10 2 – 2 2 – 2 
net pensions finance charge 8 9 10 – 5 5 – 11 11
profitloss before tax 184 34 150 166 83 83
tax expensecredit 9 11 41 26 15 41 28 13
profit for the period 143 8 135 125 55 70 
earnings per ordinary share
 basic 12 349p 329p 305p 171p
 diluted 12 347p 327p 302p 170p
a exceptional items and other adjustments are explained in note 1 and analysed in note 9
b earnings before interest tax depreciation amortisation movements in the valuation of the property portfolio and impairment of goodwill
the notes on pages 73 to 98 form an integral part of these financial statements
all results relate to continuing operations
68
mitchells  butlers plc annual report and accounts 2013 group statement of comprehensive income
for the 52 weeks ended 28 september 2013
notes
2013
52 weeks
 £m
2012 
53 weeks
restated
 £m
profit for the period 135 70 
items that will not be reclassified subsequently to profit or loss
unrealised gain on revaluation of the property portfolio 14 60 10 
actuarial losses on defined benefit pension schemes 8 65 81
movement in pension liability recognised due to minimum funding requirements 8 57 78 
tax relating to items not reclassified 11 17 20 
69 27
items that may be reclassified subsequently to profit or loss
exchange differences on translation of foreign operations 1 1
cash flow hedges
 – gainslosses arising during the period 19 53 103
 – reclassification adjustments for losses included in profit or loss 19 47 54 
tax relating to items that may be reclassified 11 30 6 
71 44
other comprehensive incomeexpense after tax 140 17
total comprehensive income for the period 275 53
 restatement for movement in pension liability recognised due to minimum funding requirements see note 1
the notes on pages 73 to 98 form an integral part of these financial statements
 
69
mitchells  butlers plc annual report and accounts 2013
company overview 01 – 05 strategic and business review 07 – 34 governance 35 – 64 financial statements 65 – 106 shareholder information 107 – 108 group balance sheet
28 september 2013
notes
2013
 
£m
2012 
restated
£m
2011 
restated
£m
assets
goodwill and other intangible assets 13 5 5 10 
property plant and equipment 14 3895 3848 3848 
lease premiums 2 1 6 
deferred tax asset 20 105 150 149 
derivative financial instruments 19 5 4 18 
total noncurrent assets 4012 4008 4031 
inventories 15 24 26 25 
trade and other receivables 16 72 56 70 
other cash deposits 26 25 25 50 
cash and cash equivalents 26 340 311 306 
total current assets 461 418 451 
total assets 4473 4426 4482
liabilities
pension liabilities 8 40 40 40
trade and other payables 17 263 265 298
current tax liabilities 17 28 17
borrowings 18 57 53 49
derivative financial instruments 19 46 45 44
total current liabilities 423 431 448
pension liabilities 8 208 236 263
other payables 17 12 12 12
borrowings 18 2075 2133 2197
derivative financial instruments 19 182 280 235
deferred tax liabilities 20 345 382 429
longterm provisions 21 9 9 6
total noncurrent liabilities 2831 3052 3142
total liabilities 3254 3483 3590
net assets 1219 943 892
equity
called up share capital 22 24 35 35 35 
share premium account 24 23 21 21 
capital redemption reserve 24 3 3 3 
revaluation reserve 24 869 793 768 
own shares held 24 4 3 5
hedging reserve 24 187 257 214
translation reserve 24 12 11 12 
retained earnings 468 340 272 
total equity 1219 943 892
 restatement for movement in pension liability recognised due to minimum funding requirements see note 1
the notes on pages 73 to 98 form an integral part of these financial statements
signed on behalf of the board on 25 november 2013
alistair darby
tim jones
70
mitchells  butlers plc annual report and accounts 2013 group statement of changes in equity
for the 52 weeks ended 28 september 2013
called
 up share
 capital
 £m
share
 premium
 account
 £m
capital
 redemption
 reserve 
£m
revaluation
 reserve
 £m
own
 shares
 held 
£m
hedging
 reserve
 £m
translation
 reserve
 £m
retained
 earnings
 £m
total
 equity 
£m
at 24 september 2011 35 21 3 768 5 214 12 472 1092 
prior period restatement – – – – – – – 200 200
at 24 september 2011 restated 35 21 3 768 5 214 12 272 892 
profit for the period – – – – – – – 70 70 
other comprehensive incomeexpense – – – 25 – 43 1 2 17
total comprehensive incomeexpense – – – 25 – 43 1 72 53
purchase of own shares – – – – 1 – – – 1
release of own shares – – – – 3 – – 2 1 
charge in respect of sharebased payments – – – – – – – 1 1
tax on sharebased payments – – – – – – – 1 1
at 29 september 2012 restated 35 21 3 793 3 257 11 340 943
profit for the period – – – – – – – 135 135
other comprehensive incomeexpense – – – 76 – 70 1 7 140
total comprehensive incomeexpense – – – 76 – 70 1 128 275 
share capital issued – 2 – – – – – – 2 
purchase of own shares – – – – 5 – – – 5
release of own shares – – – – 4 – – 2 2 
credit in respect of sharebased payments – – – – – – – 2 2 
at 28 september 2013 35 23 3 869 4 187 12 468 1219
 restatement for movement in pension liability recognised due to minimum funding requirements see note 1
71
mitchells  butlers plc annual report and accounts 2013
company overview 01 – 05 strategic and business review 07 – 34 governance 35 – 64 financial statements 65 – 106 shareholder information 107 – 108 group cash flow statement
for the 52 weeks ended 28 september 2013
notes
2013 
52 weeks 
£m
2012 
53 weeks 
£m
cash flow from operations 25 371 347 
cash flow from operating exceptional items 2 17
interest paid 128 131
interest received 2 2 
tax paid 31 25
net cash from operating activities 212 176 
investing activities
purchases of property plant and equipment 126 147
purchases of intangible assets 1 – 
payment of lease premium 1 –
proceeds from sale of property plant and equipment 1 3 
transfers from other cash deposits – 25 
net cash used in investing activities 127 119
financing activities
issue of ordinary share capital 2 – 
purchase of own shares 5 1
proceeds on release of own shares 2 1 
repayment of principal in respect of securitised debt 18 55 52
net cash used in financing activities 56 52
net increase in cash and cash equivalents 29 5 
cash and cash equivalents at the beginning of the period 311 306 
cash and cash equivalents at the end of the period 26 340 311 
cash and cash equivalents are defined in note 1
the notes on pages 73 to 98 form an integral part of these financial statements
72
mitchells  butlers plc annual report and accounts 2013 notes to the financial statements
for the 52 weeks ended 28 september 2013
1 accounting policies
general information
mitchells  butlers plc is a company incorporated in the united kingdom 
under the companies act 
the consolidated financial statements are presented in pounds  
sterling rounded to the nearest million being the functional currency 
of the primary economic environment in which the parent and most 
subsidiaries operate 
basis of preparation
mitchells  butlers plc along with its subsidiaries together ‘the group’ 
is required to prepare its consolidated financial statements in accordance 
with international financial reporting standards ifrss as adopted by 
the european union and in accordance with the companies act 2006
the group’s accounting reference date is 30 september the group 
draws up its financial statements to the saturday directly before or 
following the accounting reference date as permitted by section 390 3 
of the companies act 2006 the period ended 28 september 2013 
includes 52 trading weeks and the period ended 29 september 2012 
includes 53 trading weeks
the financial statements have been prepared on the historical cost basis 
as modified by the revaluation of properties pension obligations and 
financial instruments
the group’s accounting policies have been applied consistently
restatement
recent guidance from the financial reporting review panel frrp  
has clarified the treatment of a schedule of contributions under  
section 227 of the pension act 2004 in relation to the recognition  
of pension liabilities as a result the group has included the schedule  
of contributions as a minimum funding requirement within the  
meaning of ifric 14 ‘ias 19 – the limit on a defined benefit asset 
minimum funding requirements and their interaction’ and accounts  
for this liability within the pension deficit for the period ended  
28 september 2013
to reflect this conclusion the group has restated the comparative 
amounts for the periods ended 29 september 2012 and 24 september 
2011 which has the impact of increasing the pension liability by £188m 
and £266m respectively increasing the deferred tax asset by £43m  
and £66m and reducing brought forward retained earnings through a 
reduction in other comprehensive income by the net amount of £145m 
and £200m there is no change to profit before tax and no cash impact
further details are provided in note 8
basis of consolidation
the consolidated financial statements incorporate the financial 
statements of mitchells  butlers plc ‘the company’ and entities 
controlled by the company its subsidiaries the financial statements  
of the subsidiaries are prepared for the same financial reporting period  
as the company where necessary adjustments are made to the 
financial statements of subsidiaries to bring their accounting policies  
into line with those used by the group intercompany transactions 
balances and unrealised gains and losses on transactions between  
group companies are eliminated on consolidation
the results of subsidiaries acquired during the period are included in  
the consolidated income statement from the date of acquisition
going concern
the group’s business activities together with the factors likely to affect 
its future development performance and position are set out in the 
company overview and strategic and business review on pages 7 to 34 
the financial position of the group its cash flows liquidity position and 
borrowing facilities are also described within the review
in addition note 19 to the financial statements includes the group’s 
objectives policies and processes for managing its capital its financial 
risk management objectives details of its financial instruments and 
hedging activities and its exposures to credit risk and liquidity risk  
as highlighted in note 18 to the financial statements the group’s 
financing is based upon securitised debt 
the directors have at the time of approving the financial statements a 
reasonable expectation that the company and the group have adequate 
resources to continue in operational existence for the foreseeable future 
thus they continue to adopt the going concern basis of accounting in 
preparing the financial statements
intangible assets
goodwill
goodwill arising in respect of acquisitions being the excess of the 
purchase consideration over the fair value attributed to the separately 
identifiable assets liabilities and contingent liabilities acquired is stated 
at cost less any impairment in value goodwill is not amortised but 
is reviewed for impairment annually or more frequently if events or 
changes in circumstances indicate that the carrying value may be 
impaired the impairment review requires management to undertake 
certain judgements including estimating the recoverable value of the 
business to which the goodwill relates based on either the fair value  
less costs to sell or the value in use in order to reach a conclusion as to 
whether the goodwill is recoverable value in use estimates are based  
on management’s projection of the cash flows that the business will 
generate after applying a suitable discount rate fair value less costs to 
sell is based on management’s assessment of the net proceeds which 
could be generated through disposing of the business to which the 
goodwill relates any impairment is recognised immediately in the 
income statement and is not subsequently reversed on disposal  
of a subsidiary the attributable amount of goodwill is included  
in the determination of the profit or loss on disposal
computer software
computer software and associated development costs which are not  
an integral part of a related item of hardware are capitalised as an 
intangible asset and amortised on a straight line basis over their useful 
life the period of amortisation ranges between three and seven years 
with the majority being five years
property plant and equipment
the group revalues the majority of its freehold and long leasehold 
licensed properties to fair value for accounting purposes short 
leasehold properties unlicensed properties fixtures and fittings  
are held at deemed cost less depreciation and impairment provisions  
noncurrent assets held for sale are held at their carrying value or their 
fair value less costs to sell where this is lower the revaluation includes 
significant accounting judgements in respect of valuation multiples 
which are determined via third party inspection of 20 of the sites  
such that all sites are individually valued approximately every five  
years and assumptions made in determining fair maintainable trade  
the directors believe that their estimates which are based on the 
current state of the uk property market are appropriate surpluses 
which arise from the revaluation exercise are included within other 
comprehensive income in the revaluation reserve unless they are 
73
mitchells  butlers plc annual report and accounts 2013
company overview 01 – 05 strategic and business review 07 – 34 governance 35 – 64 financial statements 65 – 106 shareholder information 107 – 108 notes to the financial statements
for the 52 weeks ended 28 september 2013 continued
1 accounting policies continued
reversing a revaluation adjustment which has been recognised in the 
income statement previously in which case an amount equal to a 
maximum of that recognised in the income statement previously is 
recognised in income where the revaluation exercise gives rise to a 
deficit this is reflected directly within the income statement unless  
it is reversing a previous revaluation surplus against the same asset  
in which case an amount equal to the maximum of the revaluation 
surplus is recognised within other comprehensive income in the 
revaluation reserve
depreciation is charged to the income statement on a straight line basis 
over the estimated useful lives of items of property plant and equipment 
freehold land is not depreciated freehold and long leasehold properties 
are depreciated so that the difference between their carrying value and 
estimated residual value is written off over 50 years from the date of 
acquisition the residual value of freehold and long leasehold properties 
is reviewed at least annually leasehold properties are depreciated over 
the unexpired term of the lease where this is less than 50 years the cost 
less residual value at the balance sheet date of plant machinery fixtures 
and fittings and equipment is spread by equal instalments over the 
estimated life of the relevant assets namely
information technology equipment 37 years
fixtures and fittings 320 years
expected useful lives and residual values are reviewed each year and 
adjusted if appropriate
profits and losses on disposal of property plant and equipment are 
calculated as the difference between the net sales proceeds and the 
carrying amount of the asset at the date of disposal 
the carrying values of property plant and equipment which are not 
revalued to fair market value are reviewed on an outlet basis for 
impairment if events or changes in circumstances indicate that the 
carrying amount may not be recoverable an impairment loss is 
recognised whenever the carrying amount of an outlet exceeds its 
recoverable amount the recoverable amount is the higher of an 
outlet’s fair value less costs to sell and value in use in determining  
the value in use of an outlet the group is required to make various 
judgements regarding the outlet’s projected cash flows and the 
appropriate discount rate to apply to these these judgements 
include estimating the future growth rate and profitability of  
the outlet
where an impairment loss subsequently reverses the carrying amount  
of the asset is increased to the revised estimate of its recoverable amount 
but only so that the increased carrying amount does not exceed the 
carrying amount that would have been determined had no impairment 
loss been recognised for the asset in prior periods a reversal of an 
impairment loss is recognised as income immediately an impairment 
reversal is only recognised where there is a change in the estimates  
used to determine recoverable amounts not where it results from 
the passage of time
operating leases
leases in which substantially all the risks and rewards of ownership  
are retained by the lessor are classified as operating leases payments 
made under operating leases and subleases are charged to the income 
statement on a straight line basis over the period of the lease lease 
incentives are recognised as a liability and a subsequent reduction  
in the rental expense over the lease term on a straight line basis
premiums paid on acquiring a new lease are spread on a straight line 
basis over the lease term such premiums are classified in the balance 
sheet as current or noncurrent prepayments with the current portion 
being the element which relates to the following period
the group’s policy is to account for land held under both long and short 
leasehold contracts as operating leases since it has no expectation that 
title will pass on expiry of the lease contracts
the group is party to a small number of leases on properties which are 
no longer trading profitably whilst every effort is made to sublet these 
properties it is not always possible where a lease is onerous to the 
group a provision is established based on the directors’ best estimate  
of the present value of the payments up until the point it is judged the 
lease will no longer be onerous
inventories
inventories are stated at the lower of cost and net realisable value  
cost is calculated using the weighted average method work in progress 
is in respect of property development activities and includes the direct 
costs of the developments and associated professional fees
financial instruments
financial assets and financial liabilities are recognised in the group’s 
balance sheet when the group becomes a party to the contractual 
provisions of the instrument
financial assets
all financial assets are recognised and derecognised on a trade date where 
the purchase or sale of a financial asset is under a contract whose terms 
require delivery of the financial asset within the timeframe established  
by the market concerned and are initially measured at fair value plus 
transaction costs except for those financial assets classified as at fair  
value through profit or loss which are initially measured at fair value 
financial assets are classified into the following specified categories 
financial assets ‘at fair value through profit or loss’ fvtpl derivative 
instruments in designated hedge accounting relationships ‘heldto
maturity’ investments ‘availableforsale’ afs financial assets and ‘loans 
and receivables’ the classification depends on the nature and purpose of 
the financial assets and is determined at the time of initial recognition
impairment of financial assets
financial assets other than those at fvtpl are assessed for indicators 
of impairment at each balance sheet date financial assets are impaired 
where there is objective evidence that as a result of one or more events 
that occurred after the initial recognition of the financial asset the 
estimated future cash flows of the investment have been affected 
for listed and unlisted equity investments classified as afs a significant 
or prolonged decline in the fair value of the security below its cost is 
considered to be objective evidence of impairment 
for all other financial assets including redeemable notes classified as 
afs and finance lease receivables objective evidence of impairment 
could include
• significant financial difficulty of the issuer or counterparty or
• default or delinquency in interest or principal payments or
• it becoming probable that the borrower will enter bankruptcy  
or financial reorganisation
74
mitchells  butlers plc annual report and accounts 2013 for certain categories of financial asset such as trade receivables  
assets that are assessed not to be impaired individually are in addition 
assessed for impairment on a collective basis objective evidence of 
impairment for a portfolio of receivables could include the group’s past 
experience of collecting payments an increase in the number of delayed 
payments in the portfolio past the average credit period of 60 days as 
well as observable changes in national or local economic conditions that 
correlate with default on receivables
for financial assets carried at amortised cost the amount of the 
impairment is the difference between the asset’s carrying amount  
and the present value of estimated future cash flows discounted  
at the financial asset’s original effective interest rate
the carrying amount of the financial asset is reduced by the impairment 
loss directly for all financial assets with the exception of trade receivables 
where the carrying amount is reduced through the use of an allowance 
account when a trade receivable is considered uncollectable it is  
written off against the allowance account subsequent recoveries  
of amounts previously written off are credited against the allowance 
account changes in the carrying amount of the allowance account  
are recognised in profit or loss
when an afs financial asset is considered to be impaired cumulative 
gains or losses previously recognised in other comprehensive income  
are reclassified to profit or loss in the period
with the exception of afs equity instruments if in a subsequent period 
the amount of the impairment loss decreases and the decrease can  
be related objectively to an event occurring after the impairment was 
recognised the previously recognised impairment loss is reversed through 
profit or loss to the extent that the carrying amount of the investment at the 
date the impairment is reversed does not exceed what the amortised cost 
would have been had the impairment not been recognised 
in respect of afs equity securities impairment losses previously 
recognised in profit or loss are not reversed through profit or loss  
any increase in fair value subsequent to an impairment loss is  
recognised in other comprehensive income
derecognition of financial assets and liabilities
the group derecognises a financial asset only when the contractual 
rights to the cash flows from the asset expire or when it transfers the 
financial asset and substantially all the risks and rewards of ownership  
of the asset to another entity if the group neither transfers nor retains 
substantially all the risks and rewards of ownership and continues to 
control the transferred asset the group recognises its retained interest  
in the asset and an associated liability for amounts it may have to pay  
if the group retains substantially all the risks and rewards of ownership  
of a transferred financial asset the group continues to recognise the 
financial asset and also recognises a collateralised borrowing for the 
proceeds received
trade and other receivables
trade and other receivables are recognised and carried at original cost 
less an allowance for any uncollectable amounts
cash and cash equivalents
cash and cash equivalents comprise cash at bank and in hand and other 
shortterm highly liquid deposits with an original maturity at acquisition 
of three months or less cash held on deposit with an original maturity  
at acquisition of more than three months is disclosed as other cash 
deposits for the purposes of the cash flow statement cash and cash 
equivalents are net of bank overdrafts that are repayable on demand
trade and other payables
trade and other payables are recognised at original cost
borrowings
borrowings which include the group’s secured loan notes are stated 
initially at fair value normally the amount of the proceeds net of issue 
costs thereafter they are stated at amortised cost using an effective 
interest basis finance costs which are the difference between the net 
proceeds and the total amount of payments to be made in respect of the 
instruments are allocated over the term of the debt using the effective 
interest method
effective interest method
the effective interest method is a method of calculating the amortised 
cost of a debt instrument and of allocating interest income over the 
relevant period the effective interest rate is the rate that exactly 
discounts estimated future cash receipts including all fees and points 
paid or received that form an integral part of the effective interest  
rate transaction costs and other premiums or discounts through  
the expected life of the debt instrument or where appropriate  
a shorter period to the net carrying amount on initial recognition
income is recognised on an effective interest basis for debt instruments 
other than those financial assets classified as at fvtpl 
derivative financial instruments and hedge accounting
the group uses interest rate and currency swap contracts to hedge  
its exposure to changes in interest rates and exchange rates these 
contracts are designated as cash flow hedges and hedge accounting is 
applied where the necessary criteria under ias 39 financial instruments 
recognition and measurement are met derivative financial instruments 
are not used for trading or speculative purposes
derivative financial instruments are initially measured at fair value on the 
contract date and are remeasured to fair value at subsequent reporting 
dates fair value is calculated as the present value of the estimated future 
cash flows
changes in the fair value of derivative instruments that are designated 
and effective as hedges of highly probable future cash flows are 
recognised in equity the cumulative gain or loss is transferred from 
equity and recognised in the income statement at the same time as  
the hedged transaction affects profit or loss the ineffective part of  
any gain or loss is recognised in the income statement immediately
movements in the fair value of derivative instruments which do  
not qualify for hedge accounting are recognised in the income  
statement immediately
hedge accounting is discontinued when the hedging instrument expires 
or is sold terminated or no longer qualifies for hedge accounting at 
that point the cumulative gain or loss in equity remains in equity and  
is recognised in accordance with the above policy when the transaction 
affects profit or loss if the hedged transaction is no longer expected to 
occur the cumulative gain or loss recognised in equity is recognised in 
the income statement immediately
equity instruments
an equity instrument is any contract that evidences a residual interest  
in the assets of an entity after deducting all liabilities equity instruments 
issued by the company are recorded at the fair value of the proceeds 
received net of direct issue costs
foreign currencies
transactions in foreign currencies are recorded at the exchange rates 
ruling on the dates of the transactions monetary assets and liabilities 
denominated in foreign currencies are translated into the functional 
currency at the relevant rates of exchange ruling at the balance sheet 
date foreign exchange differences arising on translation are recognised 
in the income statement nonmonetary assets and liabilities are 
measured at cost using the exchange rate on the date of the initial 
transaction
75
mitchells  butlers plc annual report and accounts 2013
company overview 01 – 05 strategic and business review 07 – 34 governance 35 – 64 financial statements 65 – 106 shareholder information 107 – 108 notes to the financial statements
for the 52 weeks ended 28 september 2013 continued
1 accounting policies continued
on consolidation the assets and liabilities of the group’s overseas 
operations are translated into sterling at the relevant rates of exchange 
ruling at the balance sheet date the results of overseas operations are 
translated into sterling at average rates of exchange for the period 
exchange differences arising from the translation of the results and the 
retranslation of opening net assets denominated in foreign currencies are 
taken directly to the group’s translation reserve when an overseas 
operation is sold such exchange differences are recognised in the 
income statement as part of the gain or loss on sale
revenue
revenue is the fair value of goods and services sold to third parties as 
part of the group’s trading activities after deducting salesbased taxes 
coupons and staff discounts
the majority of revenue comprises food and beverages sold in the 
group’s outlets this revenue is recognised at the point of sale to the 
customer revenue arising from the sale of development property is 
recognised on legal completion of the sale 
operating profit
operating profit is stated after charging operating exceptional costs but 
before investment income and finance costs
tax
the income tax expense represents both the income tax payable based 
on profits for the period and deferred tax and is calculated using tax 
rates enacted or substantively enacted at the balance sheet date taxable 
profit differs from net profit as reported in the income statement because 
it excludes items of income or expense which are not taxable income tax 
is recognised in the income statement except when it relates to items 
charged or credited directly to equity in which case the income tax is 
also charged or credited to equity
deferred tax is recognised on all temporary differences between the 
carrying amounts of assets and liabilities for financial reporting purposes 
and the amount of their tax bases deferred tax is not recognised in respect 
of temporary differences associated with investments in subsidiaries where 
the timing of the reversal of the temporary difference can be controlled  
and it is probable that the temporary difference will not reverse in the 
foreseeable future the amount of deferred tax provided is based on the 
expected manner of realisation or settlement of the carrying amount of 
assets and liabilities deferred tax assets are recognised only to the extent 
that it is probable that future taxable profits will be available against which 
the asset can be utilised
assessing the outcome of uncertain tax positions requires judgements  
to be made in relation to the likely outcome of negotiations with and 
enquiries from tax authorities and in some cases an assessment of  
the likely outcome of other case law
pension obligations
the group has both defined benefit and defined contribution  
pension arrangements
the actuarial liability recognised in the balance sheet in respect of the 
group’s defined benefit arrangements is the present value of the defined  
benefit obligation less the fair value of the scheme assets the cost  
of providing benefits is determined using the projected unit credit 
method as determined annually by qualified actuaries this is based  
on a number of financial assumptions and estimates the determination  
of which is significant to the balance sheet valuation these are set out 
and discussed in note 8 and include judgements in relation to longterm 
interest rates inflation investment returns and longevity of current and 
future pensioners 
following recent guidance from the financial reporting review panel 
the total liability recognised in the balance sheet in respect of the group’s 
defined benefit arrangements is the greater of the minimum funding 
requirements calculated as the present value of the agreed schedule of 
contributions and the actuarial calculated liability
there is no current service cost as all defined benefit schemes are  
closed to future accrual the interest cost and the expected return  
on assets are shown as a net amount within finance income or finance 
expense actuarial gains and losses are recognised in full in the period  
in which they occur in the statement of comprehensive income rather 
than the income statement curtailments and settlements relating to the 
group’s defined benefit plan are recognised in the income statement in 
the period in which the curtailment or settlement occurs
for the defined contribution arrangements the charge against profit is 
equal to the amount of contributions payable for that period
sharebased compensation
the group operates a number of equitysettled sharebased 
compensation plans whereby subject to meeting any relevant conditions 
employees are awarded shares or rights over shares the cost of such 
awards is measured at fair value excluding the effect of non marketbased 
vesting conditions on the date of grant the expense is recognised over 
the vesting period and is adjusted for the estimated effect of non market
based vesting conditions and forfeitures on the number of shares that will 
eventually vest due to employees leaving the employment of the group 
fair values are calculated using either the blackscholes binomial or monte 
carlo simulation models depending on the conditions attached to the 
particular share scheme
own shares
the cost of own shares held in employee share trusts and in treasury  
are deducted from shareholders’ equity until the shares are cancelled 
reissued or disposed where such shares are subsequently sold or 
reissued the fair value of any consideration received is also included  
in shareholders’ equity
provisions
provisions are recognised when the group has a present legal or 
constructive obligation as a result of past events it is more likely than  
not that an outflow of resources will be required to settle the obligation 
and the amount can be reliably estimated provisions are measured  
using the directors’ best estimate of the expenditure required to settle 
the obligation at the balance sheet date and are discounted to present 
value where the effect is material
dividends
dividends proposed by the board but unpaid at the period end are not 
recognised in the financial statements until they have been approved  
by shareholders at the annual general meeting interim dividends are 
recognised when paid no dividends were proposed or paid in either  
the current or the prior period
adjusted profit
in addition to presenting information on an ifrs basis the group  
also presents adjusted profit and earnings per share information that 
excludes exceptional items and other adjustments including the related 
tax on these items this adjusted information is disclosed to allow a 
better understanding of the underlying trading performance of the 
group and is consistent with the group’s internal management reporting 
exceptional items are those which are separately identified by virtue  
of their size or incidence and include movements in the valuation of  
the property portfolio as a result of the annual revaluation exercise 
impairment review of short leasehold and unlicensed properties and 
restructuring costs see note 9 other adjustments excluded from 
adjusted profit and earnings per share comprise the ias 19 net  
pensions finance charge which can be volatile as it is calculated  
with reference to longterm interest rates and represents a  
noncash charge
 
76
mitchells  butlers plc annual report and accounts 2013 recent accounting developments
the international accounting standards board iasb and international 
financial reporting interpretations committee ifric have issued the 
following standards and interpretations which have been adopted by 
the group in these financial statements for the first time
amendments to ias 1 presentation of financial statements amended june 
2011 – increased the required level of disclosure within the statement of 
other comprehensive income the impact of this amendment has been to 
analyse items within the statement of comprehensive income between 
items that will not be reclassified subsequently to profit or loss and items 
that will be reclassified subsequently to profit or loss in accordance with the 
respective ifrs standard to which the item relates the financial statements 
have also been amended to analyse tax on the same basis see note 11  
the amendments have been applied retrospectively and hence the 
presentation of items of other comprehensive income have been  
restated to reflect the change
the iasb and ifric have issued the following standards and interpretations 
which could impact the group with an effective date after the date of these 
financial statements they have not been adopted early by the group and 
are not expected to have any material impact
ias 19 employee benefits revised june 2011 – mandates the use of  
the ias 19 discount rate in calculating the expected return on pension 
scheme assets rather than using the return that might be expected from  
a balanced portfolio of equities bonds and other assets this will be 
effective for the group in 201314
ifrs 9 financial instruments – simplifies the classification recognition  
and measurement requirements for financial assets financial liabilities 
and some contracts to buy or sell nonfinancial items this will be 
effective for the group in 201516 if adopted by the european union
ifrs 7 amended disclosures – offsetting financial assets and  
financial liabilities – increases disclosure requirements where netting 
arrangements are in place for financial assets and financial liabilities
the following standards will be effective for the group in 201314
ifrs 10 consolidated financial statements ifrs 11 joint arrangements 
ifrs 12 disclosure of interests in other entities and ifrs 13 fair value 
measurements
the directors do not expect that the adoption of the standards listed 
above will have a material impact on the financial statements of the group 
in future periods except ifrs 13 which will impact the measurement  
of fair value for certain assets and liabilities as well as the associated 
disclosures beyond this it is not practicable to provide a reasonable 
estimate of the effect of these standards until a detailed review has  
been completed 
exchange rates
the results of overseas operations have been translated into sterling at 
the weighted average euro rate of exchange for the period of £1  € 119 
2012 £1  €123 where this is a reasonable approximation to the rate  
at the dates of the transactions euro and us dollar denominated assets 
and liabilities have been translated at the relevant rate of exchange at  
the balance sheet date of £1  € 119 2012 £1  €126 and £1  161 
2012 £1  161 respectively
2 critical accounting judgements and estimates
the preparation of the consolidated financial statements requires 
management to make judgements estimates and assumptions in  
the application of accounting policies that affect reported amounts 
of assets liabilities income and expense
estimates and judgements are periodically evaluated and are based on 
historical experience and other factors including expectations of future 
events that are believed to be reasonable under the circumstances actual 
results may differ from these estimates the group’s critical accounting 
judgements and estimates are in respect of property plant and equipment 
asset impairments exceptional items and other adjustments pensions and 
taxation details of these judgements and estimates are described in the 
relevant accounting policy and detailed notes to the financial statements  
as set out below
• property plant and equipment – assumptions are made in the 
valuation of properties in relation to fair maintainable trading levels 
and the property market assumptions are also made regarding 
assets’ useful lives and residual value in relation to plant and 
equipment see accounting policy on property plant and 
equipment and note 14
• asset impairments – assumptions are made in relation to the  
value in use calculation including projected cash flows future 
growth rates and the appropriate discount rate to apply to these 
see accounting policies on property plant and equipment  
and goodwill
• exceptional items and other adjustments – determination of items 
which are separately identified by virtue of their size or incidence 
so as to allow a better understanding of the underlying trading 
performance of the group see accounting policy on adjusted 
profit and note 9
• pensions – actuarial assumptions in respect of the defined benefit 
pension scheme liability include judgements in relation to long
term interest rates inflation investment returns and longevity of 
current and future pensioners see accounting policy on pension 
obligations and note 8 and
• taxation – assessing the outcome of uncertain tax positions 
requires judgements to be made in relation to the likely outcome  
of negotiations with and enquiries from tax authorities and in 
some cases an assessment of the likely outcome of other case  
law see accounting policy on tax and notes 11 17 and 20
77
mitchells  butlers plc annual report and accounts 2013
company overview 01 – 05 strategic and business review 07 – 34 governance 35 – 64 financial statements 65 – 106 shareholder information 107 – 108 notes to the financial statements
for the 52 weeks ended 28 september 2013 continued
3 segmental analysis
ifrs 8 operating segments requires operating segments to be based on the group’s internal reporting to its chief operating decision maker 
codm the codm is regarded as the chief executive together with other board members the codm uses profit before interest and exceptional 
items operating profit preexceptionals as the key measure of the segment results group assets are reviewed as part of this process but are not 
presented on a segment basis
the retail operating business operates all of the group’s retail operating units and generates all of its external revenue the property business holds 
the group’s freehold and long leasehold property portfolio and derives all of its income from the internal rent levied against the group’s retail 
operating units the internal rent charge is eliminated at the total group level
retail operating business property business total
2013 
52 weeks
 £m
2012 
53 weeks
 £m
2013 
52 weeks
 £m
2012 
53 weeks
 £m
2013 
52 weeks
 £m
2012 
53 weeks
 £m
revenue
a
1895 1889 – – 1895 1889 
ebitda preexceptionals 230 220 192
b
 195
b
422 415 
operating profit preexceptionals 133 123 179 181 312 304 
exceptional items and other adjustments
  
note 9 29 72
operating profit 283 232
net finance costs 133 149
profit before tax 150 83 
tax expense 15 13 
profit for the period 135 70 
a revenue includes other income of £7m 2012 £7m in respect of franchise operations
b the ebitda preexceptionals of the property business relates entirely to rental income received from the retail operating business
geographical segments
substantially all of the group’s business is conducted in the united kingdom in presenting information by geographical segment segment revenue 
and noncurrent assets are based on the geographical location of customers and assets
uk germany total
2013 
52 weeks
 £m
2012
 53 weeks
 £m
2013 
52 weeks
 £m
2012 
53 weeks
 £m
2013
 52 weeks
 £m
2012 
53 weeks 
£m
revenue – sales to third parties 1837 1837 58 52 1895 1889 
segment noncurrent assets
a
3895 3849 7 5 3902 3854 
a includes balances relating to intangibles property plant and equipment and noncurrent lease premiums
4 operating costs
2013 
52 weeks
 £m
2012
 53 weeks 
 £m
raw materials and consumables recognised as an expense 530 547 
changes in inventory of finished goods and work in progress 2 1
employee costs note 6 525 519 
hire of plant and machinery 18 17 
property operating lease costs 49 52 
other costs 349 360
operating costs before depreciation amortisation movements in the valuation of the property portfolio and  
impairment of goodwill 1473 1494
depreciation of property plant and equipment note 14 109 111 
amortisation of intangible assets note 13 1 – 
impairment of goodwill note 13 – 5 
net movement in the valuation of the property portfolio note 9 29 47 
depreciation amortisation movement in the valuation of the property portfolio and impairment of goodwill 139 163 
total operating costs 1612 1657 
78
mitchells  butlers plc annual report and accounts 2013 5 auditor’s remuneration
2013
52 weeks
 £m
2012 
53 weeks
 £m
fees payable to the group’s auditor for the
 – audit of the consolidated group financial statements 01 01 
 – audit of the company’s subsidiaries financial statements 02 02 
total audit fees 03 03 
other fees to auditors
 – other services 01 01 
total nonaudit fees 01 01 
auditor remuneration of £03m was paid in the uk and £01m was paid in germany
6 employees and directors
2013
52 weeks
 £m
2012
 53 weeks 
£m
costs
wages and salaries 483 480 
sharebased payments note 7 2 – 
total wages and salaries 485 480 
social security costs 35 34 
pensions note 8 5 5 
total employee costs 525 519 
the average number of employees including parttime employees was 40476 pub and 849 support 2012 40310 pub and 868 support
information regarding key management personnel is included in note 29 detailed information regarding directors’ emoluments pensions longterm 
incentive scheme entitlements and their interests in share options is given in the report on directors’ remuneration on pages 50 to 64
7 sharebased payments
the net charge recognised for sharebased payments in the period was £2m 2012 £nil following the reversal of prior year provision for the  
long term incentive plan of £32m
the group had six share schemes all of which are equitysettled in operation during the period
the vesting of all awards or options is generally dependent upon participants remaining in the employment of a participating company during the 
vesting period
details of schemes in operation during the period are shown below
sharesave plan
the sharesave plan is an hmrc approved savings scheme whereby the proceeds from a savings contract of either three or five years duration may 
be used to purchase shares under option providing the employee remains in employment until the contract matures options are typically granted in 
june or july of each year at a discount of up to 20 of the market value of the shares at the date of invitation there are no performance conditions 
the scheme is open to all uk employees provided that they have at least 12 months’ service at the date of invitation the vesting period is 39 months 
or 63 months and options may be exercised up to six months after the vesting date
share incentive plan
the share incentive plan is an hmrc approved savings scheme open to all uk employees with at least 12 months’ service at the date of invitation 
the plan awards free shares to participating employees up to a maximum award of £3000 per employee per year with individual value being  
prorated on salary there are no performance conditions other than remaining in employment for two years from the date of award hence there 
is a vesting period of two years from the award date shares are generally held in the share incentive plan trust for at least three years and are  
capable of being released to participants at any time thereafter
short term deferred incentive plan
under the short term deferred incentive plan the annual bonuses of the executive directors and other eligible employees may be deferred into 
mitchells  butlers plc shares at the discretion of the remuneration committee at least 50 of the annual bonus for the executive directors and  
any excess over 75 of base salary earned in the year for the other eligible employees will normally be deferred and released in equal tranches  
12 and 24 months after deferral participants may receive dividend accrued shares on vesting equal to the value of the ordinary dividends that  
would have been paid on the vested shares during the performance period if a participant leaves the employment of the group before the  
‘release dates’ then in certain circumstances they may lose entitlement to bonus shares and dividend accrued shares
all deferrals of bonuses into shares to date have been entirely at the discretion of the remuneration committee
79
mitchells  butlers plc annual report and accounts 2013
company overview 01 – 05 strategic and business review 07 – 34 governance 35 – 64 financial statements 65 – 106 shareholder information 107 – 108 notes to the financial statements
for the 52 weeks ended 28 september 2013 continued
7 sharebased payments continued
performance restricted share plan
the performance restricted share plan prsp allows executive directors and other eligible employees to receive nominal cost options subject to the 
satisfaction of performance conditions set by the remuneration committee which are normally measured over a three year period 
vesting is conditional upon the achievement of a total shareholder return tsr performance condition and an adjusted earnings per share growth 
performance condition
in respect of the tsr performance condition monte carlo simulations incorporate the market condition in the measurement of the fair value based 
on an index of competitors participants will be entitled to receive dividend accrued shares on vesting equal to the value of the ordinary dividends 
that would have been paid on the vested shares during the performance period
executive share option plan
the grant of options under the executive share option plan was discontinued following shareholder approval of changes to executive director 
remuneration in 2006
the vesting period for these options is three years from grant followed by a seven year exercise period the latest possible exercise date for any of 
these options outstanding at 28 september 2013 is 24 may 2015
longterm incentive plan
an award was made under the longterm incentive plan ltip on 30 july 2010 with participants receiving a conditional right to receive mitchells  butlers 
plc shares with a value determined by their percentage of the ltip pool overall vesting of awards was dependent upon the achievement of an adjusted 
earnings per share underpin whereby the award would be capable of vesting only if adjusted eps growth from financial year 2010 to 2013 was at least 
equal to rpi plus 12 percentage points if the eps condition was not met no awards would vest
during 2012 the directors believed that it was unlikely that the performance condition would be achieved and a provision of £32m was released  
this award was subsequently cancelled without payment
the group has used separate option pricing models and assumptions for each plan the following tables set out weighted average information about 
how the fair value of each option grant was calculated
2013
performance 
restricted 
share plan
sharesave 
plan
valuation model monte carlo and binomial blackscholes
weighted average share price 3497p 3709p 
exercise price
a
– 3090p 
expected dividend yield
b
– – 
riskfree interest rate 097 103
volatility
c
34 314
expected life years
d
260 394 
2012 longterm incentive plan sharesave plan
valuation model monte carlo blackscholes
weighted average share price 2648p 2490p
exercise price – 1820p
expected dividend yield
b
200 200
riskfree interest rate 073 058
volatility
c
330 362
expected life years
d
372 395 
a the exercise price for the performance restricted share plan is £1 per participating employee
b  the expected dividend yield for the sharesave plan and ltip has used historical dividend information for details on the group’s current dividend policy refer to the financial review on 
page 34 the expected dividend yield for the performance restricted share plan options is zero as participants are entitled to dividend accrued shares to the value of ordinary dividends 
paid during the vesting period
c the expected volatility is determined by calculating the historical volatility of the company’s share price commensurate with the expected term of the options and share awards
d the expected life of the options represents the average length of time between grant date and exercise date
the fair value of awards under the short term deferred incentive plan and the share incentive plan are equal to the share price on the date of award 
as there is no price to be paid and employees are entitled to dividend accrued shares the assumptions set out above are therefore not relevant to 
these schemes
80
mitchells  butlers plc annual report and accounts 2013 movements in the awards and options outstanding under these schemes for the periods ended 28 september 2013 and 29 september 2012  
are as follows
short term
 deferred
 incentive plan
performance 
restricted 
share plan
share
 incentive 
plan
number of 
shares
 thousands
number of
 shares
 thousands
number of
 shares
 thousands
outstanding at 24 september 2011 72  5444 1388
granted 13 – 401 
exercised 40 577 166
forfeited – 2568 70
expired 20 34 – 
outstanding at 29 september 2012 25 2265 1553 
granted – 1598 265 
exercised 18 563 177
forfeited – 1533 69
expired – 8 – 
outstanding at 28 september 2013 7 1759 1572 
fair value of options granted during the period pence
a
at 28 september 2013 – 2139 3709 
at 29 september 2012 2239 – 2493 
weighted average remaining contract life years
at 28 september 2013 02 38 –
b
at 29 september 2012 04 21 –
b
a fair value is based on the date of grant
b sip shares are capable of remaining within the sip trust indefinitely while participants continue to be employed by the group
executive share option plan sharesave plan
number of
 shares 
thousands
weighted
 average
 option price 
pence
number of 
shares 
thousands
weighted 
average
 option price
 pence
options outstanding at 24 september 2011 2323 2857 4160 2373 
granted – – 1294 1820 
exercised 312 2382 120 2392 
forfeited – – 757
a
2432 
expired 501 3167 478 2708 
options outstanding at 29 september 2012 1510 2853 4099 2148 
granted – – 759 3090 
exercised 694 2613 903 1965 
forfeited – – 409
a
2088 
expired 84 3261 108 3365 
options outstanding at 28 september 2013 732 3033 3438 2373 
options exercisable
at 28 september 2013 732 3033 – – 
at 29 september 2012 1510 2853 – – 
fair value of options granted during the period pence
b
at 28 september 2013 – 1246
at 29 september 2012 – 868
range of prices pence of options outstanding
at 28 september 2013 2522 – 326 1 1820 – 3090
at 29 september 2012 2190 – 3261 1820 – 2590
a the number of forfeited shares in the period includes 219464 2012 526886 cancellations
b weighted average fair value based on the date of grant has been shown for the sharesave plan
the weighted average share price during the period was 3553p 2012 2521p
81
mitchells  butlers plc annual report and accounts 2013
company overview 01 – 05 strategic and business review 07 – 34 governance 35 – 64 financial statements 65 – 106 shareholder information 107 – 108 notes to the financial statements
for the 52 weeks ended 28 september 2013 continued
7 sharebased payments continued
summarised information about options outstanding at 28 september 2013 under the share option schemes is as follows
options outstanding options exercisable
range of exercise prices pence
number of
 shares 
outstanding 
thousands
weighted 
average 
remaining 
contract life 
 years
weighted 
average 
option price 
 pence
number of
shares
 exercisable 
thousands
weighted 
average
 remaining 
contract life
 years
weighted 
average 
option price 
pence
performance restricted share plan
negligible
a
1759 38 – 
a 
199 09 – 
a 
executive share option plan
2525 226 07 2525 226 07 2525
3261 506 17 3261 506 17 3261
732 13 3033 732 13 3033
sharesave plan
2590 144 05 2590 – – –
1960 400 15 1960 – – –
2570 455 11 2570 – – –
2530 613 21 2530 – – –
1820 1071 29 1820 – – –
3090 755 39 3090 – – –
3438 25 2373 – – –
a the exercise price relating to the performance restricted share plan is £1 per participating employee per exercise
8 pensions
background
retirement and death benefits are provided for eligible employees in the united kingdom principally by the mitchells  butlers pension plan 
mabpp and the mitchells  butlers executive pension plan mabepp these plans are funded hmrc approved occupational pension schemes 
with defined contribution and defined benefit sections the defined benefit sections of the plans closed to new entrants during 2002 with new 
members provided with defined contribution arrangements on 13 march 2011 the defined benefit plan closed to future accrual at the same time 
mitchells  butlers plc implemented a revised defined contribution benefit structure the defined benefit liability relates to these funded plans 
together with an unfunded unapproved pension arrangement the executive topup scheme or mabetus in respect of certain mabepp 
members the assets of the plans are held in selfadministered trust funds separate from the company’s assets
in addition from 1 january 2013 mitchells  butlers plc implemented a workplace pension plan in line with the workplace pensions reform 
regulations this automatically enrols all eligible workers into a qualifying workplace pension plan
restatement in relation to ifric 14 and minimum funding requirements
following recent guidance from the frrp regarding the treatment of a schedule of contributions in relation to a minimum funding requirement under 
ifric 14 the group has reconsidered the appropriate accounting treatment for its pension funding obligations as a result the group now includes 
the schedule of contributions within the overall pension liability recorded at the period end
82
mitchells  butlers plc annual report and accounts 2013 the group has restated the comparative amounts for the periods ended 29 september 2012 and 24 september 2011 which has the impact of 
increasing the pension liability by £188m and £266m respectively increasing the deferred tax asset by £43m and £66m and reducing brought 
forward retained earnings through a reduction in other comprehensive income by the net amount of £145m and £200m the tables below  
provide a summary of the amounts previously reported the adjustments made and the restated amounts
group balance sheet
2012
£m
2011
£m
actuarial deficit as reported 88 37
additional liability recognised due to minimum funding requirements 188 266
net liability restated 276 303
associated deferred tax asset
deferred tax relating to retirement benefit obligations as reported 20 9 
additional deferred tax asset recognised due to minimum funding requirements 43 66 
deferred tax relating to retirement benefit obligations restated note 20 63 75 
group statement of comprehensive income
2012
53 weeks
£m
2011
52 weeks
£m
actuarial lossgain recognised as reported 81 84 
movement in pension liability recognised due to minimum funding requirements 78 266
total movement in pension liability restated 3 182
tax relating to actuarial lossgain as reported 16 25
tax relating to movement in pension liability recognised due to minimum funding requirements 23 66 
total tax relating to movement in pension liability restated 7 41 
actuarial lossgain recognised after tax as reported 65 59 
movement in pension liability recognised due to minimum funding requirements after tax 55 200
total movement in pension liability recognised after tax restated 10 141
measurement of scheme assets and liabilities – ias 19
the valuations used for ias 19 purposes are based on the results of the latest full actuarial valuation carried out at 31 march 2010 and updated by the 
schemes’ independent qualified actuaries to 28 september 2013 scheme assets are stated at market value at 28 september 2013 and the liabilities  
of the schemes have been assessed as at the same date using the projected unit method ias 19 requires that the scheme liabilities are discounted 
using market yields at the end of the period on high quality corporate bonds see ‘discount rate’ assumption in the table below
pension costs are assessed in accordance with the advice of independent qualified actuaries 
principal financial assumptions
the principal financial assumptions adopted following the advice of independent qualified actuaries at the balance sheet date were
2013 2012
pensions increases 33 28 
discount rate 44 43 
inflation rate 34 28 
the discount rate applied to the pension schemes’ liabilities is a significant driver of the net balance sheet valuation of the schemes and is  
subject to a high degree of judgement and complexity it is estimated that a 01 increase or decrease in the discount rate used would in isolation 
reduce or increase the actuarial deficit by approximately £34m 2012 £32m 2011 £26m with no material impact on the income statement charge  
a similar increase or decrease of 01 in the inflation rate would in isolation increase or reduce the actuarial deficit by approximately £30m  
2012 £30m 2011 £24m
83
mitchells  butlers plc annual report and accounts 2013
company overview 01 – 05 strategic and business review 07 – 34 governance 35 – 64 financial statements 65 – 106 shareholder information 107 – 108 notes to the financial statements
for the 52 weeks ended 28 september 2013 continued
8 pensions continued
mortality assumptions
the mortality assumptions were reviewed following the full actuarial valuation in march 2010 and are based on the s1na mortality tables for the 
mabpp and s1na ‘light’ tables for the mabepp  an allowance was made for medium cohort projection with a 1 underpin ages are rated up by  
one year for pensioners of the mabpp and rated down by two years for all members of the mabepp  assumptions are consistent across both the 
current and previous period a summary of the average life expectancies assumed is as follows
2013 2012
main plan
 years
executive 
plan
years
main plan 
years
executive 
plan
years
male member aged 65 current life expectancy 203 246 203 246
male member aged 45 life expectancy at 65 230 264 230 264
female member aged 65 current life expectancy 231 260 231 260
female member aged 45 life expectancy at 65 258 280 258 280
 
amounts recognised in respect of defined benefit schemes
the longterm rates of return on assets at 28 september 2013 shown below form the basis of the calculation of the expected return on pension 
scheme assets for the 2014 financial year the 2012 rates shown are used in calculating the 2013 expected return
to develop the expected longterm rate of return on assets assumptions the group considered the current level of expected returns on riskfree 
investments primarily government bonds the historical level of the risk premium associated with the other asset classes in which the portfolio  
is invested and the expectations for future returns of each asset class the expected return for each asset class is weighted based on the asset 
allocation to develop the expected longterm rate of return on assets assumption for the portfolio resulting in a weighted average assumption  
of 42 2012 45 2011 52 the actual investment return achieved on the scheme assets over the period was 92 2012 112 2011 58 
which represented a gain of £145m 2012 £162m 2011 £79m
the combined assets of the mabpp and mabepp  their expected rates of return and the value of the pension scheme assets and liabilities at the 
balance sheet date can be summarised as follows
2013 2012 2011
longterm
 rates
of return
 expected
 
value
 £m
longterm 
rates 
of return 
expected
 
value
a
 £m
longterm 
rates 
of return 
expected
 
value
a
 £m
equities 74 545 69 488 69 420
bonds 36 1120 32 1058 37 999
other 50 67 49 64 55 53
fair value of assets 1732 1610 1472
present value of scheme liabilities 1849 1698 1509
actuarial deficit in the schemes 117 88 37
additional liability recognised due to minimum  
funding requirements 131 188 266
total pension liability 248 276 303
associated deferred tax asset 50 63 75
a restated further details are provided in the narrative on page 73
the following amounts relating to the group’s defined benefit and defined contribution arrangements have been recognised in the group income 
statement and group statement of comprehensive income
group income statement
2013 
52 weeks
£m
2012
 53 weeks 
£m
operating profit
employer contributions defined contribution plans 5 5
charge to operating profit 5 5
finance income
expected return on pension scheme assets 67 66 
interest on pension scheme liabilities 72 77
net finance charge in respect of pensions 5 11
total charge 10 16
84
mitchells  butlers plc annual report and accounts 2013 group statement of comprehensive income
2013 
52 weeks
 £m
2012
53 weeks 
restated
£m
actual return less expected return on pension scheme assets 78 96 
changes in assumptions underlying the present value of the scheme liabilities 143 177
actuarial loss recognised 65 81
movement in pension liability recognised due to minimum funding requirements 57 78 
total movement in pension liability recognised in other comprehensive income 8 3
 restatement for movement in pension liability recognised due to minimum funding requirements see note 1
the movement in the fair value of the schemes’ assets in the period is as follows
scheme assets
2013 
£m
2012
 £m
2011
 £m
fair value of scheme assets at beginning of period 1610 1472 1405
expected return on plan assets 67 66 74
employee contributions – – 1
employer contributions 41 41 44
benefits paid 64 65 57
actuarial gain recognised 78 96 5
at end of period 1732 1610 1472
changes in the present value of defined benefit obligations are as follows
defined benefit obligation
2013
 £m
2012
 £m
2011
 £m
present value of defined benefit obligation at beginning of period 1698 1509 1548
interest cost on benefit obligations 72 77 79
current service cost – – 4
exceptional pension charge curtailment – – 13
employee contributions – – 1
benefits paid 64 65 57
actuarial lossgain recognised 143 177 79
at end of period
a
1849 1698 1509
a the defined benefit obligation comprises £22m 2012 £19m 2011 £17m relating to the mabetus unfunded plan and £1827m 2012 £1679m 2011 £1492m relating to the funded plans
history of experience gains and losses 2013 2012 2011 2010 2009
difference between the expected and actual return on scheme assets
amount £m 78 96 5 65 10 
percentage of scheme assets 4 6 0 5 1
experience gainslosses on scheme liabilities
amount £m 20 – – 34 – 
percentage of the present value of the scheme liabilities 1 – – 2 – 
total amount recognised in the group statement of  
comprehensive income
a
amount £m 65 81 84 43 174 
percentage of the present value of the scheme liabilities 4 5 6 3 12
a before movement in pension liability recognised due to minimum funding requirements
the cumulative amount of actuarial gains and losses recognised since 26 september 2004 in the group statement of comprehensive income is a 
£251m loss 2012 £186m loss 2011 £105m loss the directors are unable to determine how much of the pension scheme deficit recognised on 
transition to ifrs and taken directly to equity is attributable to actuarial gains and losses since inception of the schemes consequently the directors 
are unable to determine the amount of actuarial gains and losses that would have been recognised in the group statement of comprehensive income 
before 26 september 2004
funding valuation and future funding obligations
the results of the 2010 actuarial valuation showed a funding deficit of £400m using a more prudent basis to discount the scheme liabilities than is 
required by ias 19 and on 21 july 2010 the company formally agreed a 10 year recovery plan with the trustees to close the funding deficit in respect 
of its pension scheme liabilities the result of this was that the group agreed to increase additional contributions from £24m to £40m per annum 
commencing from 1 april 2010 in each of the financial years to 2019 and £20m in financial year 2020 this agreement is subject to review following 
completion of the current ongoing actuarial valuation which commenced in march 2013 the group has therefore continued to make additional 
contributions of £40m per annum during the current period
in the 52 weeks ended 28 september 2013 the group paid £5m 2012 £5m in respect of the defined contribution arrangements with £nil 2012 £nil 
outstanding as at the period end
at 28 september 2013 the mabpp owed £1m 2012 £2m to the group in respect of expenses paid on its behalf this amount is included in other 
receivables in note 16
85
mitchells  butlers plc annual report and accounts 2013
company overview 01 – 05 strategic and business review 07 – 34 governance 35 – 64 financial statements 65 – 106 shareholder information 107 – 108 notes to the financial statements
for the 52 weeks ended 28 september 2013 continued
9 exceptional items and other adjustments
notes
2013
 52 weeks
 £m
2012 
53 weeks 
£m
operating exceptional items 
movement in the valuation of the property portfolio and goodwill 
 – impairment arising from the revaluation a 12 35
 – other impairment a 17 12
 – impairment of goodwill b – 5
net movement in the valuation of the property portfolio and goodwill 29 52
other exceptional items 
 – bid defence c – 6
 – business reorganisation d – 7
 – it systems reorganisation d – 7
net loss arising on other exceptional items – 20
total operating exceptional items 29 72
other adjustments
net pensions finance charge note 8 e 5 11
total exceptional items and other adjustments before tax 34 83
tax credit relating to above items 8 18 
exceptional tax charge in respect of previous years f – 1
tax credit in respect of change in tax legislation note 11 g 18 11 
total tax credit 26 28 
total exceptional items and other adjustments charge after tax 8 55
a  movement in the valuation of the property portfolio includes £12m of impairment 2012 £35m arising from the group’s revaluation of its pub estate and £17m 2012 £12m of impairment 
of short leasehold and unlicensed properties where their carrying values exceed their recoverable amount
b goodwill impairment following testing of the value in relation to ha ha bar  grill limited see note 13
c  relates to legal and professional fees incurred in the defence of a possible offer made by piedmont inc in september 2011 to purchase all of the remaining company shares the possible 
offer was withdrawn on 13 october 2011
d  relates to the costs of a reorganisation announced by the company on 22 november 2011 costs were primarily redundancy and severance payments fees in relation to professional 
advisers and oneoff costs connected with the transfer of the it data centre
e the net pensions finance charge is a noncash adjustment which is excluded from adjusted profit
f the charge in the prior period is an adjustment in respect of previous years’ disposals and derivative planning 
g  a deferred tax credit has been recognised in the current period following the enactment of legislation on 17 july 2013 which lowered the uk standard rate of corporation tax from 23 to 
20 with effect from 1 april 2015 the prior period deferred tax credit relates to the enactment of legislation on 17 july 2012 which lowered the uk standard rate of corporation tax from 
25 to 23 with effect from 1 april 2013
10 finance costs and revenue
2013
52 weeks
 £m
2012
 53 weeks 
£m
finance costs
securitised and other debt – loans and receivables
a
130 140
finance revenue
interest receivable – cash 2 2 
net finance charge in respect of pensions note 8 5 11
a includes £nil 2012 £6m in relation to accrued backdated interest on outstanding tax items
11 taxation
2013
52 weeks
 £m
2012
 53 weeks
 £m
tax charged in the income statement
current tax
 – uk corporation tax 34 28 
 – amounts overunder provided in previous years 14 8 
total current tax charge 20 36 
deferred tax
 – origination and reversal of temporary differences 2 5 
 – adjustments in respect of previous years 11 7 
 – change in tax rate 18 11 
total deferred tax credit note 20 5 23 
total tax charged in the income statement 15 13
86
mitchells  butlers plc annual report and accounts 2013 2013
52 weeks
 
£m
2012 
53 weeks 
restated
£m
tax relating to items recognised in other comprehensive income
deferred tax
items that will not be reclassified subsequently to profit or loss
 – unrealised gains due to revaluations – revaluation reserve 16 15 
 – unrealised gains due to revaluations – retained earnings 11 12 
 – actuarial losses on pension schemes 7 16 
 – movement in pension liability recognised due to minimum funding requirements 17 23
17 20
items that may be reclassified subsequently to profit or loss
 – cash flow hedges
 – gainslosses arising during the period 11 24 
 – reclassification adjustments for losses included in profit or loss 19 18
30 6
total tax chargecredit recognised in other comprehensive income 13 26 
 restatement for movement in pension liability recognised due to minimum funding requirements see note 1
2013 
52 weeks
 £m
2012 
53 weeks
 £m
tax relating to items recognised directly in equity
deferred tax
 – tax charge related to sharebased payments – 1
reconciliation of the total tax charge
the tax charge in the income statement for the period is lower 2012 lower than the standard rate of corporation tax in the uk the differences are 
reconciled below
2013
52 weeks 
£m
2012
 53 weeks
 £m
profit before tax 150 83 
accounting profit multiplied by the uk standard rate of corporation tax of 235 2012 25 35 21 
expenses not deductible 2 5 
income not taxable 1 3
adjustments in respect of previous years 3 1 
tax credit in respect of change in tax rate 18 11
total tax charge reported in the income statement 15 13 
factors which may affect future tax charges
the finance act 2013 was enacted on 17 july 2013 and reduced the main rate of corporation tax from 23 to 20 from 1 april 2015 the effect of this 
change has been reflected on the closing deferred tax balance shown in note 20
12 earnings per share
basic earnings per share eps has been calculated by dividing the profit or loss for the period by the weighted average number of ordinary shares in 
issue during the period excluding own shares held in treasury and by employee share trusts
for diluted earnings per share the weighted average number of ordinary shares is adjusted to assume conversion of all dilutive potential ordinary shares
adjusted earnings per ordinary share amounts are presented before exceptional items and other adjustments and the net pensions finance charge 
see note 9 in order to allow a better understanding of the underlying trading performance of the group
profit 
£m
basic eps
 pence per 
ordinary
 share
diluted eps 
pence per 
ordinary 
share
52 weeks ended 28 september 2013
profiteps 135 329p 327p 
exceptional items and other adjustments net of tax 4 10p 10p 
net pensions finance charge net of tax 4 10p 10p 
adjusted profiteps 143 349p 347p 
53 weeks ended 29 september 2012
profiteps 70 171p 170p 
exceptional items and other adjustments net of tax 46 112p 111p 
net pensions finance charge net of tax 9 22p 21p 
adjusted profiteps 125 305p 302p 
87
mitchells  butlers plc annual report and accounts 2013
company overview 01 – 05 strategic and business review 07 – 34 governance 35 – 64 financial statements 65 – 106 shareholder information 107 – 108 notes to the financial statements
for the 52 weeks ended 28 september 2013 continued
12 earnings per share continued
the weighted average number of ordinary shares used in the calculations above are as follows
2013
52 weeks
 m
2012 
53 weeks 
m
for basic eps calculations 410 409 
effect of dilutive potential ordinary shares
 – contingently issuable shares – 2 
 – other share options 2 1 
for diluted eps calculations 412 412 
at 28 september 2013 521591 2012 4274023 other share options were outstanding that could potentially dilute basic eps in the future but were 
not included in the calculation of diluted eps as they are antidilutive for the periods presented
13 goodwill and other intangible assets
goodwill 
£m
computer
 software 
£m
total 
£m
cost
at 24 september 2011 7 8 15 
additions – – – 
disposals
a
– 4 4
at 29 september 2012 7 4 11 
additions – 1 1 
disposals
a
– 1 1
at 28 september 2013 7 4 11 
accumulated amortisation and impairment
at 24 september 2011 – 5 5 
provided during the period – – – 
disposals
a
– 4 4
impairment 5 – 5 
at 29 september 2012 5 1 6 
provided during the period – 1 1 
disposals
a
– 1 1
at 28 september 2013 5 1 6 
net book value
at 28 september 2013 2 3 5 
at 29 september 2012 2 3 5 
at 24 september 2011 7 3 10 
a includes assets which are fully depreciated and have been removed from the fixed asset register
there are no intangible assets with indefinite useful lives all amortisation charges have been expensed through operating costs
the period of amortisation for computer software ranges between three and seven years with the majority being five years
goodwill has been tested for impairment on a sitebysite basis using forecast cash flows discounted by applying a pretax discount rate of 10  
2012 9 for the purposes of the calculation of the recoverable amount the cash flow projections beyond the two year period include 2 2012 2 
growth per annum
88
mitchells  butlers plc annual report and accounts 2013 14 property plant and equipment
land and 
buildings
 £m
fixtures
 fittings and
 equipment
 £m
total
 £m
cost or valuation
at 24 september 2011 3454 943 4397 
exchange differences 2 2 4
transfers fromto other categories 10 6 4 
additions 55 92 147 
disposals
a
19 67 86
revaluation
b
30 7 37
at 29 september 2012 3468 953 4421 
exchange differences 1 1 2 
additions 45 81 126 
disposals
a
18 58 76
revaluation
b
39 8 31 
at 28 september 2013 3535 969 4504 
depreciation
at 24 september 2011 119 430 549 
exchange differences 2 2 4
transfers from other categories 2 – 2 
provided during the period 23 88 111 
disposals
a
18 67 85
at 29 september 2012 124 449 573 
exchange differences 1 1 2 
provided during the period 22 87 109 
disposals
a
18 57 75
at 28 september 2013 129 480 609 
net book value
at 28 september 2013 3406 489 3895 
at 29 september 2012 3344 504 3848 
at 24 september 2011 3335 513 3848 
a includes assets which are fully depreciated and have been removed from the fixed asset register
b  the impact of the property revaluation is a net book value increase of £48m 2012 decrease of £25m comprising an impairment of £12m 2012 £35m net of a revaluation reserve  
credit of £60m 2012 £10m shown in the group statement of comprehensive income in addition a review of the short leasehold and unlicensed property estate has resulted in an 
impairment of £17m 2012 £12m see note 9
certain assets with a net book value of £37m 2012 £33m owned by the group are subject to a fixed charge in respect of liabilities held by the 
mitchells  butlers executive topup scheme mabetus
properties
a policy of valuing the majority of the group’s freehold and long leasehold licensed properties for accounting purposes was adopted on  
29 september 2007  short leasehold properties unlicensed properties and fixtures fittings and equipment are held at cost less depreciation  
and impairment the group accounts for long leasehold land as an operating lease
the freehold and long leasehold properties have been valued at market value as at 28 september 2013 using information provided by cbre 
independent chartered surveyors the valuation was carried out in accordance with the provisions of rics appraisal and valuation standards  
‘the red book’ assuming each asset is sold as part of the continuing enterprise in occupation individually as a fully operational trading entity  
the market value has been determined having regard to factors such as current and future projected income levels taking account of location 
quality of the pub restaurant and recent market transactions in the sector changes in these assumptions such as the valuation basis applied in 
comparable market transactions or the income level generated by a pub could materially impact the valuation of the freehold and long leasehold 
properties it is estimated that a £1 change in the ebitda of the freehold and long leasehold properties would generate approximately an £8 
movement in their valuation
the carrying values of property plant and equipment which are not revalued to fair market value are reviewed on an outlet basis for impairment if 
events or changes in circumstances indicate that their carrying amount may not be recoverable
included within property plant and equipment are assets with a net book value of £3569m 2012 £3541m which are pledged as security for the 
securitisation debt and over which there are certain restrictions on title
89
mitchells  butlers plc annual report and accounts 2013
company overview 01 – 05 strategic and business review 07 – 34 governance 35 – 64 financial statements 65 – 106 shareholder information 107 – 108 notes to the financial statements
for the 52 weeks ended 28 september 2013 continued
14 property plant and equipment continued
net book value
a
the split of the net book value of land and buildings is as follows
2013
 £m
2012 
£m
2011
£m
freehold 3047 2984 2967
long leasehold 263 253 260
short leasehold 96 107 108
total land and buildings net book value 3406 3344 3335
a  the carrying value of freehold and long leasehold land and buildings based on their historical cost or deemed cost at transition to ifrs is £2068m and £167m respectively 2012 
£2070m and £166m
in addition to the above premiums paid on acquiring a new lease are classified separately in the balance sheet at 28 september 2013 an amount of 
£2m 2012 £1m was included in the balance sheet
15 inventories
2013
£m
2012
 £m
2011
£m
work in progress
a
3 4 4
goods held for resale 21 22 21
total inventories 24 26 25
a work in progress is in respect of property developments
16 trade and other receivables
2013 
£m
2012 
£m
2011
£m
trade receivables 2 1 1
other receivables 21 22 20
prepayments 36 26 18
other financial assets
a
13 7 31
total trade and other receivables 72 56 70
 
a other financial assets relate to cash collateral provided by the swap counterparty see note 19
all amounts fall due within one year
trade and other receivables are noninterest bearing and are classified as loans and receivables and are therefore held at amortised cost trade and 
other receivables past due and not impaired are immaterial and therefore no further analysis is presented the directors consider that the carrying 
amount of trade and other receivables approximately equates to their face value
credit risk is considered in note 19
17 trade and other payables
2013
 £m
2012 
£m
2011 
£m
current
trade payables 84 74 99
other taxation and social security 55 63 57
accrued charges 84 81 66
other payables 27 40 45
other financial liabilities note 16 13 7 31
total trade and other payables 263 265 298
noncurrent
other payables
a
12 12 12
a  noncurrent other payables comprise an amount held in respect of the group’s gaming machine vat claim a decision was released during 2010 in respect of rank plc’s gaming claim  
and this ruling fell in the taxpayer’s favour as a result the group was able to further pursue its own gaming claim which was submitted in april 2006 hmrc agreed to make a repayment 
of the existing claim subject to the group providing a guarantee to hmrc that in the event that the existing decision is overturned in a higher court the amount will be repayable in full 
the rank case was appealed by hmrc to the european court of justice ecj in 2011 however no final decision was reached on gaming and the case was referred back to the uk upper 
tribunal the case is progressing through the uk courts and was heard in the court of appeal in may 2013 the decision in this case was released on 30 october 2013 and found in  
favour of hmrc rank has subsequently requested to appeal to the supreme court which has now been refused by the court of appeal it is expected that rank will now appeal directly 
to the supreme court the group continues to hold the original repayment amount of £12m as a liability as under the guarantee provided to hmrc in 2010 this amount could  now be 
repayable in full 
current trade and other payables are noninterest bearing
90
mitchells  butlers plc annual report and accounts 2013 18 borrowings
2013
£m
2012
£m
2011
£m
current
securitised debt
ab
57 53 49
noncurrent 
securitised debt
ab
2075 2133 2197
total borrowings 2132 2186 2246
a further details of the assets pledged as security against the securitised debt are given on page 89
b stated net of deferred issue costs
2013
 £m
2012
 £m
2011
 £m
analysis by year of repayment
due within one year or on demand 57 53 49
due between one and two years 69 66 729
due between two and five years 223 202 182
due after five years 1783 1865 1286
total borrowings 2132 2186 2246
securitised debt
on 13 november 2003 the group refinanced its debt by raising £1900m through a securitisation of the majority of its uk pubs and restaurants 
owned by mitchells  butlers retail limited ‘mab retail’ on 15 september 2006 the group completed a further debt ‘tap’ issue to borrow an 
additional £655m and refinance £450m of existing debt at lower cost
the loan notes consisted of 10 tranches as follows
principal outstanding
tranche
initial principal 
borrowed
 £m interest
principal 
repayment period
all by instalments
effective
interest rate 

28 september
 2013 
£m
29 september 
2012
 £m
expected 
wal
a
a1n 200 floating 2011 to 2028 621
b
 178 186 9 years
a2 550 fixed – 557 2003 to 2028 601 324 339 9 years
a3n 250 floating 2011 to 2028 629
b
 223
c
233
c
9 years
a4 170 floating 2016 to 2028 597
b
 170 170 10 years
ab 325 floating 2020 to 2032 574
b
 325 325 15 years
b1 350 fixed – 597 2003 to 2023 612 199 220 5 years
b2 350 fixed – 601 2015 to 2028 612 350 350 11 years
c1 200 fixed – 647 2029 to 2030 656 200 200 16 years
c2 50 floating 2033 to 2034 647
b
 50 50 20 years
d1 110 floating 2034 to 2036 668
b
 110 110 22 years
2555 2129 2183 
a expected weighted average life wal assumes no early redemption in respect of any loan notes
b after the effect of interest rate swaps
c a3n notes are us notes which are shown as translated to sterling at the hedged swap rate values at the period end spot rate are £231m 2012 £242m
the notes are secured on the majority of the group’s property and future income streams therefrom all of the floating rate notes are hedged using 
interest rate swaps which fix the interest rate payable
interest and margin is payable on the floating rate notes as follows
tranche interest margin
a1n 3 month libor 045
a3n 3 month us libor 045
a4
a
3 month libor 058
ab
a
3 month libor 060
c2
a
3 month libor 188
d1
a
3 month libor 213
a the margin on the a4 ab c2 and d1 notes increased in line with the agreed stepup on the note payment date in september 2013
the overall cash interest rate payable on the loan notes is 61 2012 59 after taking account of interest rate hedging and the cost of the provision  
of a financial guarantee provided by ambac in respect of the class a and ab notes
91
mitchells  butlers plc annual report and accounts 2013
company overview 01 – 05 strategic and business review 07 – 34 governance 35 – 64 financial statements 65 – 106 shareholder information 107 – 108 notes to the financial statements
for the 52 weeks ended 28 september 2013 continued
18 borrowings continued
the securitisation is governed by various covenants warranties and events of default many of which apply to mitchells  butlers retail limited  
the group’s main operating subsidiary these include covenants regarding the maintenance and disposal of securitised properties and restrictions  
on its ability to move cash by way of dividends for example to other group companies at 28 september 2013 mitchells  butlers retail limited  
had cash and cash equivalents of £99m 2012 £133m which were governed by the covenants associated with the securitisation of this amount  
£43m 2012 £42m representing disposal proceeds was held on deposit in an account over which there are a number of restrictions the use of  
this cash requires the approval of the securitisation trustee and may only be used for certain specified purposes such as capital enhancement 
expenditure and business acquisitions
the carrying value of the securitised debt in the group balance sheet is analysed as follows
 
2013 
£m
2012 
£m
principal outstanding at beginning of period 2192 2255 
principal repaid during the period 55 52
exchange on translation of dollar loan notes – 11
principal outstanding at end of period 2137 2192 
deferred issue costs 9 10
accrued interest 4 4 
carrying value at end of period 2132 2186 
undrawn committed borrowing facilities
the group holds an undrawn £295m 2012 £295m liquidity facility against the securitised arrangements sized to cover 18 months’ debt service 
which is not available for any other purpose this facility will expire on 29 august 2014
19 financial instruments
financial risk management
financial risk is managed by the group’s treasury function the group’s treasury function is governed by a board treasury policy statement which 
details the key objectives and policies for the group’s treasury management the treasury committee ensures that the treasury policy is adhered to 
monitors its operation and agrees appropriate strategies for recommendation to the board the treasury policy statement is reviewed annually with 
recommendations for change made to the board as appropriate the group treasury function is operated as a cost centre and is the only area of the 
business permitted to transact treasury deals it must also be consulted on other related matters such as the provision of guarantees or the financial 
implications of contract terms
an explanation of the group’s financial instrument risk management objectives and strategies is set out below
the main financial risks which impact the group result from funding and liquidity risk credit risk capital risk and market risk principally as a result  
of changes in interest and currency rates derivative financial instruments principally interest rate and foreign currency swaps are used to manage 
market risk derivative financial instruments are not used for trading or speculative purposes
funding and liquidity risk
in order to ensure that the group’s longterm funding strategy is aligned with its strategic objectives the treasury committee regularly assesses the 
maturity profile of the group’s debt alongside the prevailing financial projections this enables it to ensure that funding levels are appropriate to 
support the group’s plans
the current funding arrangements of the group consist of the securitised notes issued by mitchells  butlers finance plc and associated liquidity 
facility the terms of the securitisation contain a number of financial covenants compliance with these covenants is monitored by group treasury
the group prepares a rolling daily cash forecast covering a six week period and an annual cash forecast by period these forecasts are reviewed  
on a daily basis and are used to manage the investment and borrowing requirements of the group a combination of cash pooling and zero balancing 
agreements are in place to ensure the optimum liquidity position is maintained the group maintains sufficient cash balances or committed facilities 
outside the securitisation to ensure that it can meet its mediumterm anticipated cash flow requirements
the maturity table below details the contractual undiscounted cash flows both principal and interest for the group’s financial liabilities after taking 
into account the effect of interest rate swaps trade and other payables note 17 are shortterm and excluded from the table
within
 1 year 
£m
12 years
 £m
23 years 
£m
34 years 
£m
45 years
 £m
more than 
5 years
 £m
total
 £m
28 september 2013
a
fixed rate
securitised debt
b
186 186 188 193 194 2665 3612
29 september 2012
a
fixed rate
securitised debt
b
181 186 186 188 193 2859 3793
a assumes no early redemption in respect of any loan notes
b includes the impact of the cash flow hedges
92
mitchells  butlers plc annual report and accounts 2013 credit risk
the group treasury function enters into contracts with third parties in respect of derivative financial instruments for risk management purposes and 
the investment of surplus funds these activities expose the group to credit risk against the counterparties to mitigate this exposure group treasury 
operates policies that restrict the investment of surplus funds and the entering into of derivative transactions to counterparties that have a minimum 
credit rating of ‘a’ longterm and ‘a1’ ‘p1’ ’f1’ shortterm counterparties may also be required to post collateral with the group where their credit 
rating falls below a predetermined level an amount of £13m 2012 £7m of collateral was posted by a swap counterparty within the securitisation as 
at 28 september 2013 the amount that can be invested or transacted at various ratings levels is restricted under the policy to minimise credit risk 
exposure against individual counterparties investments and derivative transactions are entered into with a range of counterparties the group 
treasury function reviews credit ratings as published by moody’s standard  poor’s and fitch ratings current exposure levels and the maximum 
permitted exposure at given credit ratings for each counterparty on a daily basis any exceptions are required to be formally reported to the treasury 
committee on a fourweekly basis
included in other receivables are amounts due from certain group suppliers included in trade and other payables at the period end are amounts  
due to some of these suppliers this reduces the group’s credit exposure
the group’s credit exposure at the balance sheet date was
2013 
£m
2012
 £m
cash and cash equivalents
a
340 311
other cash deposits 25 25
trade receivables 2 1
other receivables 21 22
derivatives
a
5 4
a as disclosed in notes 16 and 17  the group has £13m 2012 £7m of cash collateral which is not included in this balance
capital management
the group’s capital base is comprised of its net debt analysed in note 26 plus total equity disclosed on the face of the group balance sheet the 
objective is to maintain a capital base which is sufficiently strong to support the ongoing development of the business as a going concern including 
the amenity and cash flow generation of the pub estate by keeping debt see also ‘funding and liquidity risk’ above and headroom against its debt 
facilities at an appropriate level the group ensures that it maintains a strong credit position whilst maximising value for shareholders and adhering  
to its covenants and other restrictions associated with its debt see note 18 in managing its capital structure from time to time the group may  
realise value from noncore assets buy back or issue new shares initiate and vary its dividend payments and seek to vary or accelerate debt 
repayments the group’s policy is to ensure that the maturity of its debt profile supports its strategic objectives the board considers the latest 
covenant compliance headroom projections and projected balance sheet positions at each of its meetings based on the advice of the treasury 
committee which meets on a fourweekly basis the treasury committee is chaired by the group treasurer and monitors treasury performance  
and compliance with boardapproved policies the group finance director is also a member of the committee
total capital at the balance sheet date is as follows
2013
 £m
2012
 £m
2011
 £m
net debt note 26 1759 1841 1870
total equity 1219 943 892
total capital 2978 2784 2762
market risk
the group is exposed to the risk that the fair value of future cash flows of its financial instruments will fluctuate because of changes in market prices 
market risk comprises foreign currency and interest rate risk
foreign currency risk
the group faces currency risk in two main areas
at issuance of the class a3n floating rate notes the group entered into a cross currency interest rate swap to manage the foreign currency exposure 
resulting from both the us principal and initial interest elements of the notes the a3n notes form part of the securitised debt see note 18
further to the stepup on the a3n notes on 15 december 2010 the group has additional foreign currency exposure as a result of the increase  
in us finance costs a movement of 10 in the us exchange rate would have £nil 2012 £nil impact on the reported group profit and £5m  
2012 £4m impact on the reported group net assets
the group has no significant profit and loss exposure as a result of retranslating monetary assets and liabilities at different exchange rates  
as the group is predominantly uk based and acquires the majority of its supplies in sterling it has no significant direct currency exposure  
from its operations
interest rate risk
the group has a mixture of fixed and floating interest rate debt instruments and manages the variability in cash flows resulting from changes in 
interest rates by using derivative financial instruments where the necessary criteria are met the group minimises the volatility in its financial 
statements through the adoption of the hedge accounting provisions permitted under ias 39 the interest rate exposure resulting from the group’s 
£21bn securitisation is largely fixed either as a result of the notes themselves being issued at fixed interest rates or through a combination of floating 
rate notes against which effective interest rate swaps are held which are eligible for hedge accounting
93
mitchells  butlers plc annual report and accounts 2013
company overview 01 – 05 strategic and business review 07 – 34 governance 35 – 64 financial statements 65 – 106 shareholder information 107 – 108 notes to the financial statements
for the 52 weeks ended 28 september 2013 continued
19 financial instruments continued
the group’s sensitivity to a 100 basis point movement in interest rates is detailed below
 
2013
 £m
2012 
£m
interest income
a
4 3 
interest expense
b
– – 
profit impact 4 3 
derivative financial instruments fair values
c
110 124 
total equity 114 127 
a represents interest income earned on cash and cash equivalents these are defined in note 26
b  the element of interest expense which is not matched by payments and receipts under cash flow hedges see below which would otherwise offset the interest rate exposure of the group
c the impact on total equity from movements in the fair value of cash flow hedges see below
derivative financial instruments
cash flow hedges
changes in cash flow hedge fair values are recognised in the hedging reserve in equity to the extent that the hedges are effective the cash flow 
hedges detailed below have been assessed as being highly effective during the period and are expected to remain highly effective over the remaining 
contract lives
during the period a gain of £53m 2012 loss of £103m on cash flow hedges was recognised in equity a loss of £47m 2012 £54m was recycled from 
equity and included in the group income statement for the period
cash flow hedges – securitised borrowings
at 28 september 2013 the group held 10 2012 10 interest rate swap contracts with a nominal value of £1056m 2012 £1075m designated as a 
hedge of the cash flow interest rate risk of £1056m 2012 £1075m of the group’s floating rate borrowings comprising the a1n a3n a4 ab c2 
and d1 loan notes
the cash flows on these contracts occur quarterly receiving a floating rate of interest based on libor and paying a fixed rate of 48805 2012 
48856 the contract maturity dates match those of the hedged item the 10 interest rate swaps above are held on the balance sheet at fair market 
value which is a liability of £228m 2012 £325m
at 28 september 2013 the group held one 2012 one cross currency interest rate swap contract with a nominal value of £223m 2012 £233m 
designated as a hedge of the cash flow interest rate and currency risk of the group’s a3n floating rate 373m 2012 390m borrowings the cross 
currency interest rate swap is held on the balance sheet at a fair value asset of £5m 2012 £4m
the cash flows on this contract occur quarterly receiving a floating rate of interest based on us libor and paying a floating rate of interest  
at libor in sterling
the fair values of the derivative financial instruments were measured at 28 september 2013 and may be subject to material movements in the period 
subsequent to the balance sheet date the fair values of the derivative financial instruments are reflected on the balance sheet as follows
derivative financial instruments – fair value
noncurrent
 assets
 £m
current
 assets 
£m
current
 liabilities
 £m
noncurrent 
liabilities 
£m
total 
£m
cash flow hedges
 – interest rate swaps – – 46 182 228
 – cross currency swap 5 – – – 5 
28 september 2013 5 – 46 182 223
29 september 2012 4 – 45 280 321
24 september 2011 18 – 44 235 261
 
94
mitchells  butlers plc annual report and accounts 2013 the fair value and carrying value of financial assets and liabilities by category is as follows
2013 2012
book
 value 
£m
fair 
value 
£m
book 
value
 £m
fair
 value
 £m
financial assets
 – cash 365 365 336 336 
 – derivative instruments in designated hedge accounting relationships 5 5 4 4 
 – loans and receivables 23 23 23 23 
financial liabilities
 – amortised cost 2132 2073 2186 1927
 – derivative instruments in designated hedge accounting relationships 228 228 325 325
 – other 166 166 177 177
2133 2074 2325 2066
the various tranches of the securitised debt have been valued using period end quoted offer prices as the securitised debt is traded on an active 
market the market value represents the fair value of this debt the fair value of interest rate and currency swaps is the estimated amount which the 
group could expect to pay or receive on termination of the agreements these amounts are based on quotations from counterparties which 
approximate to their fair market value and take into consideration interest and exchange rates prevailing at the balance sheet date other financial 
assets and liabilities are either shortterm in nature or their book values approximate to fair values
fair value of financial instruments
the group’s financial instruments are all categorised as level 2 as defined under ifrs 7 financial instruments disclosures
20 deferred tax
the deferred tax included in the group balance sheet and group income statement is as follows
2013
 
£m
2012
restated
£m
2011
restated
£m
deferred tax liability
accelerated capital allowances 46 52 56
rolled over and held over gains 139 161 177
unrealised gains on revaluations 153 161 188
depreciated nonqualifying assets 7 8 8
total deferred tax liability 345 382 429
deferred tax asset
retirement benefit obligations note 8 50 63 75
sharebased payments 2 3 5
derivative financial instruments 46 76 69
nontrade tax losses 7 8 –
total deferred tax asset 105 150 149
 restatement for movement in pension liabilities recognised due to minimum funding requirements see note 1
2013 
£m
2012
 £m
2011
£m
deferred tax in the income statement
accelerated capital allowances 6 4 18
retirement benefit obligations 3 5 5
rolled over and held over gains 11 8 15
depreciated nonqualifying assets 1 1 1
unrealised gainslosses on revaluations 8 7 1
short term temporary differences 1 – 1
nontrade tax losses 1 8 5
total deferred tax credit in the income statement note 11 5 23 22
unrecognised tax losses
at the balance sheet date the group had unused losses of £6m 2012 £6m available for offset against future profits
a deferred tax asset has not been recognised on tax losses with a value of £1m 2012 £1m because it is not certain that future taxable profits will be 
available against which the group can utilise the benefit these tax losses can be carried forward indefinitely
95
mitchells  butlers plc annual report and accounts 2013
company overview 01 – 05 strategic and business review 07 – 34 governance 35 – 64 financial statements 65 – 106 shareholder information 107 – 108 notes to the financial statements
for the 52 weeks ended 28 september 2013 continued
21 provisions
property 
leases 
£m
at 24 september 2011 6 
additionsreleases 6 
utilised 3
at 29 september 2012 9 
additionsreleases 3 
utilised 3
at 28 september 2013 9 
onerous property provisions represent the expected unavoidable losses on onerous and vacant property leases and comprise the lower of the  
net rent payable or the operating loss after rental costs the provision is calculated on a site by site basis with an estimated period of future losses 
ranging from three to five years other contractual dilapidations costs are also recorded as provisions as appropriate over a period of five years  
prior to lease expiry
22 called up share capital
2013 2012
number 
of shares £m
number
 of shares £m
allotted called up and fully paid
ordinary shares of 8
13
 24p each
at start of period 409923805 35 409467 418 35
share capital issued 1087293 – 456387 – 
at end of period 411011098 35 409923805 35
all of the ordinary shares rank equally with respect to voting rights and rights to receive ordinary and special dividends there are no restrictions on 
the rights to transfer shares
no dividends have been declared or paid in the period 2012 £nil
details of options granted under the group’s share schemes are contained in note 7 
23 employee share trusts
the company has established two employee share trusts
share incentive plan sip trust
the sip trust was established in 2003 to purchase shares on behalf of employees participating in the company’s share incentive plan under this 
scheme eligible employees are awarded free shares which are normally held in trust for a holding period of at least three years after five years the 
shares may be transferred to or sold by the employee free of income tax and national insurance contributions the sip trust buys the shares in the 
market or subscribes for newly issued shares with funds provided by the company during the holding period dividends are paid directly to the 
participating employees at 28 september 2013 the trustees equiniti share plan trustees limited held 1592802 2012 1584896 shares in the 
company of these shares 376215 2012 260283 shares are unconditionally available to employees 362927 2012 426313 shares have been 
conditionally awarded to employees 832704 2012 866754 shares have been awarded to employees but are still required to be held within the  
sip trust and the remaining 20956 2012 31546 shares are unallocated
employee benefit trust ebt
the ebt was established in 2003 in order to satisfy the exercise or vesting of existing and future share options and awards under the executive share 
option plan performance restricted share plan short term deferred incentive plan and the sharesave plan the ebt purchases shares in the market 
or subscribes for newly issued shares using funds provided by the company based on expectations of future requirements dividends are waived by 
the ebt at 28 september 2013 the trustees sanne trust company limited were holding 521295 2012 546560 shares in the company
24 equity reserves
the group’s main operating subsidiary mitchells  butlers retail limited had retained earnings under uk gaap of £227m at 28 september 2013 
2012 £181m its ability to distribute these reserves by way of dividends is restricted by the securitisation covenants see note 18
share premium account
the share premium account represents amounts received in excess of the nominal value of shares on issue of new shares
capital redemption reserve
the capital redemption reserve movement arose on the repurchase and cancellation by the company of ordinary shares during prior periods
revaluation reserve
the revaluation reserve represents the unrealised gain generated on revaluation of the property estate with effect from 29 september 2007  
it comprises the excess of the fair value of the estate over deemed cost net of related deferred taxation
96
mitchells  butlers plc annual report and accounts 2013 own shares held
own shares held by the group represent the shares in the company held in treasury ‘treasury shares’ and by the employee share trusts
during the period 429 treasury shares were released to employees on the exercise of options for a total consideration of £nil there are no treasury 
shares remaining at 28 september 2013 29 september 2012 429
 
during the period the employee share trusts acquired 1250000 2012 350000 and subscribed for 181578 2012 335794 shares at a cost of £5m 
2012 £1m released 1448937 2012 1094326 shares to employees on the exercise of options and other share awards for a total consideration of 
£2m 2012 £1m the 2114097 shares held by the trusts at 28 september 2013 had a market value of £9m 29 september 2012 2131456 shares held 
had a market value of £6m further details regarding the employee share trusts are given in note 23
hedging reserve
the hedging reserve comprises the effective portion of the cumulative net change in the fair value of cash flow hedging instruments related to 
hedged future cash flows
translation reserve
the translation reserve is used to record exchange differences arising from the translation of the financial statements of foreign subsidiaries
25 cash flow from operations
2013
 52 weeks
 £m
2012
 53 weeks 
£m
operating profit 283 232
add back operating exceptional items note 9 29 72
operating profit before exceptional items 312 304 
add back
depreciation of property plant and equipment note 4 109 111 
amortisation of intangibles note 4 1 – 
cost charged in respect of sharebased payments note 6 2 – 
operating cash flow before exceptional items movements in working capital and additional pension contributions 424 415 
movements in working capital and pension contributions
decreaseincrease in inventories 2 1
increase in trade and other receivables 10 9
decrease in trade and other payables 5 21
increase in provisions – 3 
additional pension contributions note 8 40 40
cash flow from operations 371 347 
26 analysis of net debt
2013
 £m
2012 
£m
2011 
£m
cash and cash equivalents see below 340 311 306
other cash deposits see below 25 25 50
securitised debt note 18 2132 2186 2246
derivatives hedging balance sheet debt
a
 note 18 8 9 20
1759 1841 1870
a  represents the element of the fair value of currency swaps hedging the balance sheet value of the group’s us dollar denominated loan notes see note 18 this amount is disclosed 
separately to remove the impact of exchange movements which are included in the securitised debt amount
cash and cash equivalents
cash and cash equivalents comprise cash at bank and in hand including overnight deposits of £268m 2012 £286m and cash deposits with an 
original maturity of three months or less of £72m 2012 £25m
other cash deposits
other cash deposits at 28 september 2013 comprise £25m 2012 £25m of cash at bank with an original maturity of three months or more
27 movement in net debt
2013 
52 weeks
 £m
2012 
53 weeks
 £m
net increase in cash and cash equivalents note 26 29 5 
add back cash flows in respect of other components of net debt
transfers from other cash deposits – 25
repayment of principal in respect of securitised debt 55 52 
decrease in net debt arising from cash flows 84 32 
movement in capitalised debt issue costs net of accrued interest 2 3
decrease in net debt 82 29 
opening net debt 1841 1870
closing net debt 1759 1841
97
mitchells  butlers plc annual report and accounts 2013
company overview 01 – 05 strategic and business review 07 – 34 governance 35 – 64 financial statements 65 – 106 shareholder information 107 – 108 notes to the financial statements
for the 52 weeks ended 28 september 2013 continued
28 financial commitments
leases
the vast majority of the group’s leases are industry standard uk pub or commercial property leases which provide for periodic rent reviews to open 
market value and enjoy statutory rights to renewal on expiry they generally do not contain conditions relating to rent escalation rights to purchase 
concessions residual values or other material provisions of an unusual nature
where sublet arrangements are in place future minimum lease payments and receipts are presented gross
operating lease commitments – group as lessee
total future minimum lease rental payments under noncancellable operating leases are as follows
2013
 £m
2012 
£m
due within one year 42 41
between one and five years 158 153
after five years 424 443
624 637
operating lease receivables – group as lessor
total future minimum lease rental receipts under noncancellable operating leases are as follows
2013 
£m
2012 
£m
due within one year 6 7 
between one and five years 20 23 
after five years 49 56 
75 86 
lease income recognised in the year was as follows
2013
52 weeks
 £m
2012 
53 weeks 
£m
standard lease income 8 9 
capital commitments
2013
 £m
2012
 £m
contracts placed for expenditure on property plant and equipment not provided for in the financial statements 18 16 
29 related party disclosures
transactions between the company and its subsidiaries which are related parties have been eliminated on consolidation 
mitchells  butlers plc is the beneficial owner of all of the equity share capital either itself or through subsidiary undertakings of the following 
principal operating companies
name of subsidiary country of incorporation country of operation nature of business
mitchells  butlers retail limited england and wales united kingdom leisure retailing
mitchells  butlers retail no 2 limited england and wales united kingdom leisure retailing
mitchells  butlers property limited england and wales united kingdom property management
mitchells  butlers leisure retail limited england and wales united kingdom service company
mitchells  butlers finance plc england and wales united kingdom finance company
mitchells  butlers germany gmbh
a
germany germany leisure retailing
standard commercial property developments limited england and wales united kingdom property development
a shares held directly by mitchells  butlers plc
 
a full list of subsidiary undertakings will be annexed to the next annual return of mitchells  butlers plc to be filed with the registrar of companies
compensation of key management personnel of the group
2013 
£m
2012 
£m
shortterm employee benefits 2 3
termination payments – 1
sharebased payments – –
pension benefits – –
2 4
only employees of the mitchells  butlers group who are members of the board of directors or the executive committee of mitchells  butlers plc are 
deemed to be key management personnel it is the board who have responsibility for planning directing and controlling the activities of the group
movements in share options held by the employees of mitchells  butlers plc are summarised in note 4 of the company accounts
98
mitchells  butlers plc annual report and accounts 2013 five year review
income statement information
2013
52 weeks
 £m
2012 
53 weeks 
£m
2011
52 weeks 
£m
2010
 52 weeks
 £m
2009
 52 weeks 
£m
revenue 1895 1889 1796 1980 1958 
operating profit before exceptional items 312 304 294 322 300 
operating exceptional items 29 72 19 289 87
total operating profit 283 232 275 33 213 
finance revenue 2 2 3 – – 
interest on net debt 130 140 141 153 166
exceptional interest charge – – – – 51
net pensions finance charge 5 11 5 7 6
profitloss before taxation 150 83 132 127 10
taxation chargecredit 15 13 7 43 14 
profitloss for the period 135 70 125 84 4 
earningsloss per share
basic 329p 171p 307p 206p 10p
diluted 327p 170p 305p 206p 10p
adjusted basic 349p 305p 280p 297p 236p
dividends paid and proposed
a
normal dividends £m – – – – – 
normal dividends per share – – – – – 
a dividend information represents interim and final dividends for each period presented
adjusted earnings per share is stated after removing the impact of exceptional items and other adjustments as explained in note 1 less tax thereon
 
99
mitchells  butlers plc annual report and accounts 2013
company overview 01 – 05 strategic and business review 07 – 34 governance 35 – 64 financial statements 65 – 106 shareholder information 107 – 108 company balance sheet
28 september 2013 registered number 04551498
notes
2013
 £m
2012
restated
 £m
2011
restated
 £m
fixed assets
investments 5 1719 1718 1720
1719 1718 1720
current assets
debtors amounts falling due within one year 6 225 237 142
debtors amounts falling due in more than one year 6 – – 1
other cash deposits 97 50 75
cash and cash equivalents 151 140 131
473 427 349
creditors amounts falling due within one year 7 1328 1326 1338
net current liabilities 855 899 989
net assets before net pension liabilities 864 819 731
net pension liabilities 2 198 213 228
net assets 666 606 503
capital and reserves
called up share capital 8 9 35 35 35
share premium account 9 23 21 21
capital redemption reserve 9 3 3 3
profit and loss account 9 605 547 444
shareholders’ funds 666 606 503
 restatement for movement in pension liability recognised due to minimum funding requirements see note 1
signed on behalf of the board on 25 november 2013
alistair darby
tim jones 
the accounting policies and the notes on pages 101 to 106 form an integral part of these financial statements
100
mitchells  butlers plc annual report and accounts 2013 notes to the company  
financial statements
1 accounting policies
basis of accounting
the financial statements have been prepared under the historical cost 
convention the financial statements comply with applicable accounting 
standards in the united kingdom
the company has not presented its own profit and loss account as 
permitted by section 408 of the companies act 2006
no statement of recognised gains and losses is provided as the only 
additional loss is the actuarial movement which is disclosed in note 9
the company’s accounting policies have been applied consistently
restatement
recent guidance from the financial reporting review panel frrp  
has clarified the treatment of a schedule of contributions under  
section 227 of the pension act 2004 in relation to the recognition  
of pension liability as a result the company has included the  
schedule of contributions as a minimum funding requirement within  
the meaning of ifric 14 ‘ias 19 – the limit on a defined benefit asset 
minimum funding requirements and their interaction’ and accounts  
for this liability within the pension deficit for the period ended  
28 september 2013
to reflect this conclusion the company has restated the comparative 
amounts for the periods ended 29 september 2012 and 24 september 
2011 which has the impact of increasing the pension liability by  
£188m and £266m respectively increasing the deferred tax asset by 
£43m and £66m and reducing brought forward retained earnings 
through a reduction in other comprehensive income by the net  
amount of £145m and £200m there is no change to profit before  
tax and no cash impact
fixed asset investments
the company’s investments in group undertakings are held at cost less 
provision for impairment except for those amounts designated as being 
in a fair value hedge see below 
current taxation
the tax currently payable is based on taxable profit for the period 
taxable profit differs from net profit as reported in the profit and loss 
account because it excludes items of income or expense that are taxable 
or deductible in other periods and it further excludes items that are  
never taxable or deductible the company’s liability for current tax  
is calculated using tax rates that have been enacted or substantively 
enacted by the balance sheet date
deferred taxation
deferred tax assets and liabilities are recognised subject to certain 
exceptions in respect of all material timing differences between the 
recognition of gains and losses in the financial statements and for 
tax purposes 
deferred tax assets are recognised to the extent that it is regarded as 
more likely than not that they will be recovered
deferred tax is calculated on a nondiscounted basis at the tax rates that 
are expected to apply in the periods in which timing differences reverse 
based on tax rates and laws enacted or substantively enacted at the 
balance sheet date
pension obligations
the company has both defined benefit and defined contribution 
pension arrangements
the actuarial liability recognised in the balance sheet in respect of the 
company’s defined benefit arrangements is the present value of the 
defined benefit obligation less the fair value of the scheme assets shown 
net of deferred tax the cost of providing benefits is determined using 
the projected unit credit method as determined annually by qualified 
independent actuaries 
following recent guidance from the financial reporting review panel 
the total liability recognised in the balance sheet in respect of the 
company’s defined benefit arrangements is the greater of the minimum 
funding requirements calculated as the present value of the agreed 
schedule of contributions and the actuarial calculated liability
there is no current service cost as all defined benefit schemes are closed 
to future accrual the interest cost and the expected return on assets are 
shown as a net amount within finance income or expense actuarial 
gains and losses are recognised immediately in equity curtailments and 
settlements relating to the company’s defined benefit plan are 
recognised in the period in which the curtailment or settlement occurs
for the company’s defined contribution arrangements the charge 
against profit is equal to the amount of contributions payable
sharebased compensation
the company operates a number of equitysettled sharebased 
compensation plans whereby subject to meeting any relevant conditions 
employees are awarded shares or rights over shares the cost of such 
awards is measured at fair value excluding the effect of non market
based vesting conditions on the date of grant the expense is generally 
recognised over the vesting period and is adjusted for the estimated 
effect on the number of shares that will eventually vest of non market
based vesting conditions and forfeitures due to employees leaving the 
employment of the company fair values are calculated using either the 
blackscholes binomial or monte carlo simulation models depending on 
the conditions attached to the particular share scheme
foreign currencies
transactions in foreign currencies are recorded at the exchange rates 
ruling on the dates of the transactions monetary assets and liabilities 
denominated in foreign currencies are translated into sterling at the 
relevant rates of exchange ruling at the balance sheet date
in accordance with frs 26 the company applies fair value accounting  
in order to hedge part of its euro loan with mitchells  butlers germany 
gmbh against part of its investment in mitchells  butlers germany 
gmbh foreign exchange differences arising on translation on both of 
these items using the period end rate are taken to the profit and loss 
account the remainder of the investment in mitchells  butlers 
germany gmbh is held at cost as described above
profit and loss account
the company recorded a profit after tax of £77m 2012 £114m less 
dividends of £nil 2012 £nil
auditors’ remuneration for audit services to the company was £22000 
2012 £22000 this is borne by another group company as are any 
other costs relating to nonaudit services see note 5 to the consolidated 
financial statements
cash flow statement
the company has taken advantage of the exemption under frs 1  
cash flow statements and not produced a cash flow statement
related party transactions
the company has taken advantage of the exemption under frs 8 
related party disclosures and not disclosed details of transactions  
with wholly owned subsidiaries
101
mitchells  butlers plc annual report and accounts 2013
company overview 01 – 05 strategic and business review 07 – 34 governance 35 – 64 financial statements 65 – 106 shareholder information 107 – 108 2 pensions
the net pension liability of £198m 2012 £213m 2011 £228m is shown net of a deferred tax asset of £50m 2012 £63m 2011 £75m the 2012  
and 2011 pension liability and associated deferred tax asset have been restated to reflect recent guidance from the frrp regarding the treatment  
of a schedule of contributions in relation to a minimum funding requirement under ifric 14 see note 8 to the consolidated financial statements
the company is the sponsoring employer of the group’s pension plans information concerning the pension scheme arrangements operated by 
the company and associated current and future contributions is contained within note 8 on pages 82 to 85 to the consolidated financial statements
although the company accounts for pensions under frs 17 retirement benefits the pension amounts and disclosures included in note 8 to the 
consolidated financial statements in accordance with ias 19 employee benefits are equivalent to those which are applicable under frs 17 
3 employees and directors
2013 
52 weeks
2012 
53 weeks
average number of employees including parttime employees 2 3
employees of mitchells  butlers plc consist of executive directors
4 sharebased payments
the charge recognised for sharebased payments in the period is £nil 2012 credit of £1m which comprises share option schemes and share awards 
to the employees of the company
details of employee share schemes and options granted over the shares of the company are included under note 7 of the consolidated financial 
statements
movements in the awards and options outstanding under these schemes in respect of the employees of the company for the periods ended  
28 september 2013 and 29 september 2012 are as follows
short term
 deferred 
incentive plan
performance
 restricted
 share plan
share 
incentive 
plan
number of 
shares 
thousands
number of 
shares
 thousands
number of
 shares
 thousands
outstanding at 24 september 2011 39 2164 15 
granted 13 – 2 
exercised 19 230 15
forfeited – – – 
expired 20 1121 – 
outstanding at 29 september 2012 13 813 2 
granted – 477 1 
exercised 7 201 – 
forfeited – – 1
expired – 612 – 
outstanding at 28 september 2013 6 477 2 
fair value of options granted during the period pence
a
at 28 september 2013 – 2139 3709 
at 29 september 2012 2239 – 2493 
weighted average remaining contract life years
at 28 september 2013 02 42 –
b
at 29 september 2012 07 22 –
b
a fair value is calculated on the date of grant
b sip shares are capable of remaining within the sip trust indefinitely while participants continue to be employed by the group
notes to the company  
financial statements
continued
102
mitchells  butlers plc annual report and accounts 2013 executive share option plan
sharesave plan
number of 
shares 
thousands
weighted 
average 
option price
 pence
number of 
shares 
thousands
weighted 
average 
option price
 pence
options outstanding at 24 september 2011 371 3108 19 2157 
granted – – 13 1820 
exercised 77 2525 8 1960 
forfeited – – 11 2293 
expired 294 3261 – – 
options outstanding at 29 september 2012 – – 13 1820 
granted – – – – 
exercised – – – – 
forfeited – – 8 1820 
expired – – – – 
options outstanding at 28 september 2013 – – 5 1820 
options exercisable
at 28 september 2013 – – – – 
at 29 september 2012 – – – – 
fair value of options granted during the period pence
a
at 28 september 2013 – – 
at 29 september 2012 – 868 
range of prices pence of options outstanding
at 28 september 2013 – 1820 
at 29 september 2012 – 1820 
a fair value is calculated on date of grant
the weighted average share price during the period was 3553p 2012 2521p
summarised information about options over the company’s shares outstanding at 28 september 2013 under the share option schemes in respect of 
the employees of the mitchells  butlers group is shown on page 82
103
mitchells  butlers plc annual report and accounts 2013
company overview 01 – 05 strategic and business review 07 – 34 governance 35 – 64 financial statements 65 – 106 shareholder information 107 – 108 notes to the company  
financial statements
continued
5 fixed asset investments
shares in
subsidiary
undertakings 
£m
cost
at 24 september 2011 1750 
exchange differences 2
at 29 september 2012 1748 
exchange differences 1 
at 28 september 2013 1749 
provision
at 24 september 2011 30 
provided during period – 
at 29 september 2012 30 
provided during period – 
at 28 september 2013 30 
net book value
at 28 september 2013 1719 
at 29 september 2012 1718 
at 24 september 2011 1720 
mitchells  butlers plc is the beneficial owner of all of the equity share capital of companies within the group either itself or through subsidiary 
undertakings see note 29 of the consolidated financial statements 
 
a full list of subsidiary undertakings will be annexed to the next annual return of mitchells  butlers plc to be filed with the registrar of companies
6 debtors
2013
 £m
2012
 £m
2011
 £m
amounts owed by subsidiary undertakings 224 237 142
prepayments 1 – –
deferred tax asset – – 1
225 237 143
all amounts falls due within one year except for the deferred tax asset which falls due after more than one year
7 creditors amounts falling due within one year
2013 
£m
2012 
£m
2011
 £m
bank overdraft 26 26 26
amounts owed to subsidiary undertakings 1300 1298 1310
other creditors 2 2 2
1328 1326 1338
104
mitchells  butlers plc annual report and accounts 2013 8 called up share capital
details of the amount and nominal value of allotted called up and fully paid share capital are contained in note 22 to the consolidated  
financial statements
 
9 capital and reserves
profit and loss account reserve
share 
capital 
£m
share 
premium 
£m
capital 
redemption
 reserve 
£m
own shares
 £m
other 
£m
total 
£m
at 24 september 2011 35 21 3 5 649 644 
prior period restatement – – – – 200 200
at 24 september 2011 restated 35 21 3 5 449 444
share capital issued – – – – – –
purchase of own shares – – – 1 – 1
charge in respect of employee share schemes – – – – 1 1
release of own shares – – – 3 2 1 
actuarial loss on pension schemes – – – – 81 81
movement in pension liability due to minimum  
funding requirements – – – – 78 78
deferred tax relating to actuarial loss – – – – 16 16
deferred tax relating to movement in pension liability  
due to minimum funding requirements – – – – 23 23
profit after taxation – – – – 114 114 
at 29 september 2012 restated 35 21 3 3 550 547 
share capital issued – 2 – – – –
purchase of own shares – – – 5 – 5
credit in respect of employee share schemes – – – – 2 2 
release of own shares – – – 4 2 2 
actuarial loss on pension schemes – – – – 65 65
movement in pension liability due to minimum  
funding requirements – – – – 57 57 
deferred tax relating to actuarial loss – – – – 7 7 
deferred tax relating to movement in pension liability  
due to minimum funding requirements – – – – 17 17
profit after taxation – – – – 77 77 
at 28 september 2013 35 23 3 4 609 605 
 restatement for movement in pension liability recognised due to minimum funding requirements see note 1
the profit and loss account reserve is wholly distributable after the deduction for own shares
105
mitchells  butlers plc annual report and accounts 2013
company overview 01 – 05 strategic and business review 07 – 34 governance 35 – 64 financial statements 65 – 106 shareholder information 107 – 108 10 deferred tax asset
£m
at 24 september 2011 restated 76
charged to profit and loss account 6
charged to profit and loss account reserves restated 7
at 29 september 2012 restated 63 
charged to profit and loss account 3
charged to profit and loss account reserves 10 
at 28 september 2013 50 
analysed as tax timing differences related to
2013
£m
2012
restated
£m
2011
restated
£m
pensions 50 63 75
sharebased payments – – 1
50 63 76
 restatement for movement in pension liability recognised due to minimum funding requirements see note 1
the pension liability is shown net of the associated deferred tax asset see note 2
further information on the changes to tax legislation are provided in note 11 to the consolidated financial statements
notes to the company  
financial statements
continued
106
mitchells  butlers plc annual report and accounts 2013 shareholder 
information
in this section
108 shareholder information
108 glossary
107
mitchells  butlers plc annual report and accounts 2013
company overview 01 – 05 strategic and business review 07 – 34 governance 35 – 64 financial statements 65 – 106 shareholder information 107 – 108 shareholder 
information
glossary
contacts
registered office
27 fleet street
birmingham b3 1jp
telephone 44 0121 498 4000
fax 44 0121 233 2246
registrar
equiniti
aspect house
spencer road
lancing
west sussex bn99 6da
from the uk
telephone 0871 384 2065 
fax 0871 384 2100
from nonuk jurisdictions
telephone 44 0121 415 7088
fax 44 01903 833 113
for those with hearing loss a textphone is available on  
0871 384 2255 for uk callers with compatible equipment
  calls to these numbers are charged at 8p per minute plus network extras  
lines are open 830am to 530pm monday to friday excluding bank holidays
key dates
these dates are indicative only and may be subject to change
2013 final results announcement 26 november 2013
annual general meeting 30 january 2014
interim management statement january 2014
announcement of halfyear results may 2014
interim management statement july 2014
preclose trading update september 2014
2014 final results announcement november 2014
awt average weekly take
the average sales per site per week calculated as total sales excluding 
vat divided by the average number of sites trading during the period 
divided by the number of weeks in the period
cash flow from operations
net cash flow resulting directly from regular operations
ebit
earnings before interest and tax
ebitda
earnings before interest tax depreciation and amortisation
ebitdar
earnings before interest tax depreciation amortisation and rent
internal rent
a notional rent charge made against freehold properties to align internal 
performance measurement across freehold and leasehold sites
likeforlike sales growth
the sales this year compared to the sales in the previous year of all uk 
managed sites that were trading in the two periods being compared 
expressed as a percentage
net promoter score
a measure of guest recommendation based on 700000 responses  
per year
offtrade
any retail outlet which has a licence to sell alcohol for consumption off 
the premises
ontrade
any retail outlet which has a licence to sell alcohol for consumption on 
the premises eg pubs restaurants nightclubs clubs
operating profit
earnings before interest and tax
outlet employment ratio
outlet employment costs divided by sales expressed as a percentage
red book valuation
a valuation conducted in compliance with the valuation standards of the 
royal institution of chartered surveyors
retail support centre
all central functions supporting our restaurants and pubs
securitisation
a means of raising finance secured on a particular group of assets and 
the associated cash flows derived from those assets
108
mitchells  butlers plc annual report and accounts 2013 mitchells  butlers online
mitchells  butlers’ comprehensive website gives you fast 
direct access to a wide range of company information
• downloadable annual report and accounts
• latest investor news and press releases
• brand news and offers
• responsibility policies and review
• find a local pub and restaurant
• sign up for latest news
to find out more go to wwwmbplccom
sizzling pubs
wwwsizzlingpubscouk
vintage inns
wwwvintageinncouk
harvester
wwwharvestercouk
ember
wwwemberinnscouk
toby carvery
wwwtobycarverycouk
crown carveries
wwwcrowncarveriescouk
castle
wwwmbplccomfindapub
nicholson’s
wwwnicholsonspubscouk
oak tree pubs
wwwmbplccomfindapub
our brands
all of our popular brands have their own websites helping  
our customers to find the information they need straight away  
latest food and drink menus news and offers email newsletters  
and details of new openings are all available
premium country  
dining group
wwwmbplccomfindapub
o’neill’s
wwwoneillscouk
alex
wwwalexgastrode
all bar one
wwwallbaronecouk
village pub  kitchen
wwwvillagepubandkitchencouk
miller  carter
wwwmillerandcartercouk
browns
wwwbrownsrestaurantscouk
innkeeper’s lodge
wwwinnkeeperslodgecouk
company overview 01 – 05 strategic and business review 07 – 34 governance 35 – 64 shareholder information 107 – 108 financial statements 65 – 106
design and production carnegieorr
printed by cpi colour
the paper used in this report is  
derived from sustainable sources mitchells  butlers plc 
27 fleet street 
birmingham b3 1jp 
tel 44 0121 498 4000 
fax 44 0121 233 2246
wwwmbplccom
mitchells  butlers plc annual report and accounts 2013 wwwmbplccom


Summary:
 chairman’s  
statement
right 
size
this has been a year of good 
progress within your business 
we have strengthened the 
board with three independent 
nonexecutive directors 
continued to make the changes 
necessary to transform the 
business from good to great 
and delivered a 17 increase  
in adjusted earnings per share  
whilst a number of challenges 
remain we can look to the 
future with confidence
balanced  
transformation
we are now reshaping the business so 
that we can consistently deliver great 
service to our guests to drive repeat 
visits and recommendation while 
delivering good financial results
in fy 2012 we restructured our  
retail support centre to reduce 
bureaucracy speed up decision 
making and start the cultural  
change journey
the value creation journey
mitchells  butlers plc annual report and accounts 2013
02 this time last year i wrote that my key focus  
for 2013 would be to enhance the balance 
skills and compliance of the board through  
the selection of appropriately qualified 
independent nonexecutive directors  
i am delighted therefore that during the  
last year we have appointed three board 
directors of exceptional capability
imelda walsh has brought excellent people 
management and retailing skills to the board 
and is therefore an ideal person to fill the role  
of our remuneration committee chair she has 
held senior executive roles at j sainsbury plc 
where she was group hr director from 2004 
to 2010 barclays bank plc and cocacola  
schweppes beverages limited she is a  
nonexecutive director and remuneration 
committee chair of both william hill plc and 
mothercare plc
colin rutherford’s corporate finance and 
accountancy skills are already proving highly 
valuable to the board particularly in his role  
as our audit committee chair he was 
executive chairman of mam funds plc  
a quoted fund management business from  
2009 to 2011 is a member of the institute of 
chartered accountants of scotland and  
has relevant experience in various public  
and private companies in the leisure and  
hospitality industries he is currently  
chairman of brookgate limited european  
care group limited and teachers media 
international limited
stewart gilliland’s senior management 
experience predominantly in the brewing 
sector is highly relevant to many of the 
challenges that our business faces he was 
chief executive officer of muller dairy uk 
limited until 2010 and prior to that held senior 
management positions in inbev sa interbrew 
uk limited and whitbread plc he is currently 
a nonexecutive director of booker group plc 
sutton and east surrey water co tulip group 
limited nature’s way foods limited cc 
group and vianet plc
since i was appointed executive chairman  
in october 2011 we have made significant 
improvements to our corporate governance 
over the past two years the board has 
recruited a strong leader in alistair darby  
and has strengthened the board through the 
appointments of eddie irwin imelda colin and 
stewart as nonexecutive directors in july we 
finalised the membership of our remuneration 
audit and nomination committees and have 
updated their terms of reference which are 
now in line with current best practice my focus 
will continue to be on further improvements  
in this area an example is this annual report 
itself which we have attempted to make  
more useful and understandable for our 
shareholders among other improvements  
we have included a new remuneration report 
provided more information on our market and 
our brands extended our key performance 
indicators and included many of the new 
requirements of the revised uk corporate 
governance code a year earlier than required 
i hope these changes prove helpful
balanced  
transformation
accelerating
forward
as this transformation gains traction 
the performance of the business will 
start to accelerate as we achieve our 
vision that guests love to eat and 
drink with us
for further information go to the  
chief executive’s market and  
business review on pages 22 to 27
the company is in discussions with the trustee 
of the group pension schemes regarding the 
triennial actuarial valuation which is dated as  
at 31 march 2013 in order to agree the funding 
shortfall and schedule of contributions we 
hope to conclude these discussions as quickly 
as possible whilst balancing the interests of all 
stakeholders
lastly i would like to praise the efforts of  
our 40000 employees our vision is that our 
guests love to eat and drink with us and we  
are indebted to all of our people from our 
restaurants pubs and retail support centre  
in birmingham as we work towards this
we are now in the balanced transformation 
stage of our value creation journey over the 
last 12 months we have bedded in the 
organisational changes announced last year 
and refined our brand strategies in light of 
changing consumer and market dynamics  
all this has been achieved whilst still growing 
sales improving operating margin and growing 
adjusted eps by 17 there remains a lot to  
do but the progress we have already made 
gives me great confidence in the future
bob ivell
chairman
  adjusted eps is stated before exceptional items  
and other adjustments growth against last year is 
compared to the 52 week adjusted eps as detailed  
in the financial review
03
mitchells  butlers plc annual report and accounts 2013
strategic and business review 07 – 34 governance 35 – 64 financial statements 65 – 106 shareholder information 107 – 108 company overview 01 – 05