Mitchells & Butlers PLC
LSE:MAB
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Mitchells & Butlers PLC
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All right. Good morning, ladies and gentlemen. Following COVID-19, and of course, all the associated lockdowns, the continuing fallout from the war in Ukraine has fully made the macro landscape challenging to say the least. But despite that, we're actually quite pleased with the progress that the business has made. And had it not been for the eye watering increases in utility costs last year, we would all but recover to pre-COVID levels of profit last year despite the Omicron variant, which wiped out the most crucial festive season, despite the other exceptionally high cost increases, despite the delivery issues and despite the well-reported people issues that we had to contend with.
We've also started the year, as you will have seen very strongly with 6.5% like-for-like sales growth over the first 10 weeks, which is incidentally 9.2% up against 2019. So they are the reasons why we're very pleased with the progress that the business is making.
We're trading ahead of the market again consistently. We have a solid capital program already up and running and in place, which is methodically raising the quality of our amenity. And Ignite, our transformation program, is once again up and running and generating sustained improvements for the way we do business on numerous fronts.
So the macro environment -- so despite the macro environment, where we believe we're absolutely on the right path. So this morning, Tim is going to begin by taking you through the financial results. And then I will return to bring you upstream of how the business developed through the course of last year and to demonstrate to you why we're feeling so positive about the months ahead, which we believe will put us in a very strong position once the macro headwinds start to subside. I'll then move on to the priorities we have for the business and our program will work for this year, which we believe will take the business even further forward. So let me start by handing over to Tim. I missed my first slide, George, and come I'll do that.
Good morning. So I'm going to take through the financial performance of the group. We talked a little bit about the recovery in sales and what we're running at, at the moment. Thoughts on cost challenges, which I think front right mind where we think that's going. And then I'll return to profitability and the cash generation of the group.
But let me start with the income statement for last year. We made a profit of GBP 240 million. Clearly, the prior year was decimated with lockdowns and restrictions. But that GBP 240 million represents a really encouraging and strong bounce back of profitability. And as Phil said, ex utilities, that's very close to the levels that we were pre-pandemic. So it's very encouraging across the whole of the year.
As always, that recovery is built on sales growth since we opened sort of first opened about 18 months ago. We see that clearly on this slide. Now the rate of that obviously changed. So it's probably better to focus on the line rather than the bars, strips out the impact of the change in that. But what you can see is a really robust growth in sales over the whole of that period. Really encouraging to see the consistency of that. And wherever it has come off track, like Omicron, there's a very defined reason for that. And that's continued at the end of the financial year into this year.
The first 10 weeks, as Phil said, we're now at a slightly higher rate at 9.2% against FY '19. So also a really good start to the current financial year. In terms of the general themes of what's driving those sales, a few movements, a bit of volatility. Initially, our sales are driven largely by food, latterly drink has started to be stronger for us. Initially, suburban and rural areas were very much stronger. -- latterly, we're starting to see footfall return to city centers, that's beginning to catch up.
And initially, sales were very much driven by stem ahead premiumization and price, whereas again, latterly, we're starting to see volumes come back. So whilst we're still some way below our FY '19 volumes, year-on-year now in the first 10 weeks of this year were ahead of volumes a year ago. So really good sales performance last year, really great start to this year.
I think I have to say we're mindful of the potential impact of the cost of living crisis, of course, on guest going forward. We don't know what that will hold. But it's fair to say that it's not substantially evident as a risk in terms of what's coming through our tolls at the moment.
I think what we do know is that the future is going to be dynamic and the future is going to be uncertain. So it's probably worth reemphasizing the wide breadth of brands and offers that M&B does have, whether it's a food occasion or a drink occasion, whether it's premium or value and whether the location is rural, suburban or city center. We sort of got most our presence in most parts of the market. And that excellent coverage, I believe, should give us a measure of resilience as we go forward in our market and a sector that is going to continue to be sort of fast moving, fluid and volatile.
I just look at the moving parts of the P&L last year. We continue to invest in our estate. That's very important to us. We've not managed to execute as large a capital plan last year as we'd like, that's entirely due to logistical supply chain reasons and frustration is getting planning consent, but it's very important to us to maintain investment in our estate.
But what dominates this picture, of course, is cost inflation. And this is across 3 years, remember, '19 to '22. But a GBP 70 million increase in energy, so nearly doubling in our energy bill, and an overall cost headwind of GBP 218 million. So that represents a very stiff challenge for us. And I'll talk a little bit about what we think the future holds.
We had a better government support, just over GBP 50 million. Almost all of that is the reduced level of that. And then we've got what we've managed to achieve. And that is, I have to say, despite the impact of Omicron, which cost us the lion's share of last year's festive season, we've still managed to generate efficiencies, drive sales improvements and premiumization and price as well to arrive at GBP 240 million for the year.
The costs and what costs hold for us are very much front of mind and to get a key focus. If we look forward to the rest of the current year, and I have to say, I have to stress really that we're giving you our best view here, but it's still somewhat brave at times, and it's difficult to predict with any certainty. But this is just our best view of what we're sort of heading into.
We think across a GBP 1.8 billion cost base for M&B, we suspect our hedging cost will be about 10% to 12%. So call it 10% on a sort of base case scenario, maybe 12% on a downside scenario. Energy is a big part of that. We're going to benefit from the energy cap in our first half. Whether that gets extended or not, we'll find out in a few weeks' time, but we'll at least have it for the first half.
We've got 45% of our energy brought forward for this year, but we still expect despite the cap and despite that, we still expect a small increase in our energy bill for the whole of this year. Labor is a big cost for us, always has been. It's probably the most stable and predictable actually though, as we look forward to the next year. So we know that living wage is going to go up by 9.7% to GBP 10.42 an hour. That will be 1st of April. So that will only impact the second half of our year.
But longer term, I mean, I see no reason why these levels of inflation are going to continue and why it shouldn't revert to what we've always talked about is our sort of historic cost headwind norm of GBP 65 million, just over 3%. And indeed, in the next year or 2, I would hope we get some form of energy deflations to come down from the very high levels are at the moment, and we might even be below that trend for a year. In the light of that cost challenge, I think it's really encouraging to see our cash performance. So we generated positive cash in the year.
We've reduced our debt further by just over GBP 70 million. So we're now under GBP 1.2 billion debt, excluding IFRS 16 liabilities. So that's GBP 350 million lower or 20% lower than we were going into COVID. So our balance sheet absolutely does continue to strengthen, and we'll look to drive down that level of debt further.
We've revalued our property portfolio, as we do at least every year, resulting in a small downward movement, but we still have net assets across the group of over GBP 2 billion, representing about GBP 3.60 a share. So a strong underpinning of the value of the group.
I think before I hand over to Phil, I would like to say a few words about pensions. We after many, many years of paying GBP 50 million into deficit recovery, we're sort of now starting to believe that we're beginning to the light at the end of the tunnel on this. Our most recent triennial as at March of this year, we're very close to signing that. So we have a degree of confidence in the outcome, although it's not completed. And we expect to see a significant improvement in the funding position.
And our main scheme that constitutes about 80% of our liabilities. We've been putting GBP 40 million a year into that scheme. We're contracted to do that until September next year. So another 10 months. We're well on track for that to be the end of the contributions. And indeed, once we've signed this triennial, we'll look to start to divert those contributions into a blocked escrow account rather than into the scheme themselves.
The executive scheme, which is the other 20% of our liabilities, so you'll know we achieved the buy-in a year ago. So that's scheme been substantially derisked. It's very limited future funding requirements. We've already been putting our contributions into blocked escrow account, and we would hope perhaps 1 day we can even sort of recover some of those contributions at some stage.
So overall, I think a really positive movement in terms of our pensions position. And we're sort of tantalizingly close now as a group, I think not to have this GBP 50 million a year cash outflow that we've had to carry as a constraint. So that really is it. I think pulling it all together, I think, really encouraged with how sales recovered last year and how we started this year ahead of what were our initial plans.
The cost costs are going to remain a challenge, and that outlook is uncertain. But we have a number of plans to try and deal with that and Phil will take you through those in some more depth. And I think we benefit from the fact that we have a great diversified portfolio of strong brands in good locations, which leaves us really as well placed as anyone to face the challenge that we have coming forward in the future. Thank you.
All right. Thanks, Tim. As I said in the introduction, we're pleased with the progress the business is making. And once the macro headwind subside, we think we'll be in a very strong position. So to explain that, I'd like to begin by giving you the reasons why we are feeling so confident about the months ahead.
Now as Tim said, we finished the year with like-for-like sales growth of 1.1% versus FY '19, which when the VAT has stripped out demonstrated a gradual build through all 4 quarters. Now as you know, initially, the food-led businesses in our suburban locations fared better than wet-led and city center businesses did. But as the year progressed and the society learnt to live with COVID, that gradually changed. Towards the end of the year, our wet-led businesses start to fare better. Now for example, Nicholson's, the brand, I'm sure you all know well, was really struggling a year ago when the city centers were relatively empty. The work-from-home [indiscernible] has been pedaled in the media. And there was almost a total absence of foreign tourists.
A year on, and Nicholson's has finished the year very strongly, beating all of our expectations, and it's now in solid growth and arguably is probably leading the way for us. We're seeing our premium food-led businesses with a flatter performance at the moment, as they compare to last year when they shop out of the blocks when the -- our customers were making up for lost time. Of course, if we normalize the 12.5% VAT they were enjoying at the time, then they too would be in a solid growth right now.
So this illustrates, I think, a shifting picture that has been going on across the sector with more people returning to offices, city centers becoming stronger and older guests becoming more confident to venture back out and go back to their locals. So this is the first reason why we are optimistic about the future as we see a strengthening demand as society learns to live with COVID. Last year was also challenging in a number of fronts, notable amongst these was the people issues. The well-reported staffing issues that the sector was facing, driven by losing people during furlough to other sectors and by the absence of the EU talent pool post Brexit.
Now this put a lot of pressure on our recruitments, particularly for back of house roles. Now as we progressed, those recruitment challenges improved apart from certain hotspots around the country, where we had to beef up our recruitment campaigns. However, as recruitment starts to ease, so retention became a bigger issue than it had been historically. Now we put this down to people just struggling to get back into work life again after periods of lockdown. And that is and will continue to settle down. So this is the second reason why we are confident about the year ahead because we achieved last year's results despite huge people issues.
Today, while there are still some issues, they are far less impactful than they were last year. Success in hospitality is inextricably linked to customer satisfaction with the correlation between superior guest scores and strong like-for-like sales being irrefutable. Now when we reopened our doors after COVID, we were delighted to see our guest review scores strengthened from an average of 4 pre-COVID to -- 4 out of 5 pre-COVID to 4.3 post-COVID. Now initially, we put this down to us enjoying a bit of a honeymoon period that people are just pleased to be out again. And to the paired back menus we're operating that allowed us to get the food out quicker.
However, as the year progressed, we were delighted to see those guest scores maintained with critically every single brand being over 4 with scores ranging from 4.1 to 4.6 out of 5. So this is a great foundation to build upon, and all brands are our focus is on strengthening this even further.
So the trust in and love for our brands is the third reason why we're very confident about the months ahead. Clearly, as COVID-19 refuses to disappear entirely, we are keeping fingers crossed that there is no repeat of last year's stay away from Christmas Party standby, which destroyed the last festive season. I think we're getting close now.
Hopefully, that's not going to happen. [indiscernible] all-time comments last year, remember, resulted in immediate cancellation of Christmas bookings. And so last year's result was achieved despite the loss of the most crucial festive season. So as long as those now repeat, we expect a very good December and so far so good. Christmas bookings looking solid as people are looking to make up for their lost Christmases over the last couple of years. So this is the fourth reason why we're optimistic about the current year.
So to recap the strengthening propensity for our guests to come out as they've learned to live with COVID, the gradual improvement in the recruitment market, the improving guest satisfaction scores and a good Christmas season ahead of us are all reasons to feel confident that we can continue to build over the coming months. However, there are some macro challenges to overcome, not least the unprecedented cost headwinds, the biggest of which are undoubtedly utility costs and food COGS.
Utility costs for us moved from GBP 80 million pre-COVID to GBP 150 million post, which as I said earlier, makes up almost the entire shortfall to FY '19 profits. Now you expect we have a number of initiatives underway to try and reduce consumption without contracting from the guest experience, of course. Voltage optimizers and EndoTherm, which makes water boilers more efficient, are examples of capital-driven initiatives that we have in place to drive down usage with voltage optimizers alone projecting an 8% electricity consumption reduction.
On top of that, we have a network of energy ambassadors across the country who work with each site to audit the energy efficiency of each business and to produce an energy action plan specific to that business. Now these plans will include everything from when to turn the [indiscernible] in the morning, to how to reduce [ drafts ] and improve installation. As a result, there's a program of work underway to improve that installation to replace thermostat and to give each business a chance to optimize its energy consumption.
With food costs, we're currently still faced with high commodity across all lines. However, we are flexible in the way we procure and we're constantly looking for ways to limit exposure to those lines that have the high price inflation at any one time. And this may mean we have a high level of product substitution than we would normally have. or we might reduce some items entirely. So for example, Lamb has taken off the carving deck and Toby Carvery for a period of time. I'm pleased to say it's back on now. So that's the sort of thing we can do to try and limit exposure to particular costs.
We also look to use our scale purchasing power where we can, and we look to procure across all brands that gives us some scale advantage. Now food COGS, I'm sure, will remain inflated while the war in Ukraine continues, but we believe we will see some easing this year as the COVID and Brexit-driven side of that cost equation starts to subside.
The next major concern or macro concern is what impact the current cost of living crisis will have on consumer spending, as Tim alluded to. Now there's no denying that our guests will be feeling the impact of rising energy costs, rising food bills, and now rising remortgage payments, too. However, it's also fair to say that we are yet to see any impact on our trade, but we expect it's likely to be January when the festive season needs to be paid for, energy bills will be at the highest -- any impact may be felt.
However, our sector has always proven to be resilient in previous recessions as people tend to cut back on other luxuries before compromising on day-to-day activities. There's also the fact there is still a gradual return to our sector post COVID for some of our guests, and that we think this will partially offset any drop in frequency.
And finally, the high utility and food costs will accelerate supply coming out of the market, which undoubtedly benefits those remain. So we remain cautiously optimistic in our ability to withstand any consumer spending issue. We continue to work on our 3 key strategic priorities that we believe will ensure we can deliver on our aims.
Firstly, maintaining a balanced portfolio so that we're not overexposed to any 1 market segment and that our brands have kept relevant and grounded in deep customer insight. We aim to invest in each business on a circa 7-year cycle, and then when we do invest that we invest fully looking at external or toilets and where possible, bringing unused parts of the business back up to scratch.
The second priority is about driving a commercial edge to the way we do business. And this for us is about ensuring that the guest is at the heart of all our decision-making and that we're constantly listening to their feedback. It's also about being clear on how each pound of sales is converting to bottom line profit. So for example, when the business opened post COVID, it allowed us to be forensic about analyzing how each promotion we ran was really working in the business.
The final priority is about driving an innovation agenda across the business. Firstly, sweating all the technology that we already have deployed. Secondly, ensuring that the digital marketing is an engine room for the business and that we stay ahead of the competitors in this space and finally, ensuring that we invest in new products and new concept development and be willing to take that -- the learnings back into our core business.
Now to achieve our priorities, we have 3 levers that we pull each year, namely the strategic decisions we take around pricing, menu content and offer development. Secondly, the capital program where we decide how much capital to invest and where to deploy it. And finally, Ignite, our change program, which seeks to ensure that we have multiple initiatives underway at any one time together in aggregate add up to a big number.
So how are we doing? Let's start with menu development. Now we've been really cognizant of the current high food cost inflation, and we also try to reflect the need to reduce menu complexity, so we can keep up our speed of service. Most brands have a menu change in the autumn and again in the spring, while some simply run on our annual cycle supplemented by seasonal specials.
Now we have taken more price than we traditionally do during this later cycle, moving price on food and drink by circa 5%, although we work hard to protect entry-level items where we can. We've not just bluntly moved price, we've got sought to introduce more premium items at the same time and hence maintain value for money.
Whilst well below headline inflation numbers, this is still a large increase by our standards and we've worked hard to ensure that there is still something for each of our guests. So far, the guest reaction has been very good, and we can't see any deterioration in frequency but we're remaining very focused on guest sentiment and trying to ensure that service levels and the amenity makes the overall experience positive.
Current volumes are very strong versus last year, and sales after 10 weeks of tracking 6.5% like-for-like sales, as I've said earlier, 11.1% if you normalize the VAT and also up against 2019 at 9.3%. Pleasingly, we're also tracking ahead of the market on the Peach Tracker game, which is the data pool that maps about circa 50 of our competitors on a weekly basis, where we share our sales confidentially.
COVID distorted the ability of the tracker to have clean comparative data and so used FY '19 as this base year, which gave a lot advantage to all the brands that have grown their delivery business since that time. However, despite that, you can now see that the gap to the market that we had pre-COVID has emerged again and we would expect this to strengthen further when Peach starts to use 2022 data in January of next year.
Our capital program is also well underway. Now as previously reported, the construction sector was also massively impacted by COVID and now by the war. So cost and availability of labor and materials has been an issue. The planning authorities are also struggling with a huge backlog of applications, which is slowing development down. However, we still aspire to have a full program this year, which will enable us to get refurbishment back underway in each of our brands.
As predicted at the interims, we opened our first Browns restaurant in the suburban location, converting our Vintage Inns in Beaconsfield. The site has been opened for circa 12 weeks, and we're delighted by the sales up, which we're seeing and the customer comments we've had. With Christmas around the corner, which is -- for Browns is ideally suited to, we have very high hopes. And the second suburban Browns opened in [indiscernible] last Thursday and is already booked out for Christmas Day.
The return on investment from last year's overall program is difficult to calculate given the disrupted base years, but the sales uplift have been very strong, suggesting returns have strengthened. This year, we also intend to invest in solar panels with some of our sites, and so final capital allocation is still being determined.
Moving on to Ignite. Ignite has served us very well since its inception in 2016. And we currently have between 45 and 50 separate initiatives live in the business or in train within the business. From enhancing order of table capability and optimizing Christmas trading between Christmas and New Year, to focusing more forensically on our top 300 businesses and looking at food and drink surpluses in a different way.
As mentioned before, we have also labor rostering being rolled out later this year, which potentially drives a big efficiency gain, but also ensures that our teams are optimally deployed to reflect the patterns of trade. We're pushing on with our delivery and Click and Collect plan, which together drove over GBP 45 million of sales last year. And we've opened a trial of our first Toby Carvery dark kitchen after O'Neill's in Clapham. And we've also opened our first competitive socializing dark concept called Arrowsmiths, out of another O'Neill's in Solihull, that has got off to a very impressive start.
Ignite remains the unrelative for high energy program, a very varied initiatives that together in aggregate, will drive a meaningful incremental profit. The point to remember is that these gains are sustained. And so Ignite is also a program that systematically raises the bar in terms of the quality in the way of M&B does business.
Meanwhile, despite the challenging macro environment, we remain committed to our ambition to enhance the sustainability of our operations and to reduce our environmental impact. We've made good progress during the year with our greenhouse gas footprint, including Scope 1, 2 and crucially 3 emissions, now sitting at 36% below our FY '19 baseline. We're on track to achieve our target of 0 operational waste to landfill by 2030, with 96% diversion in the year just gone. And we've reduced our food waste in our supply chain and our sites combined by 29% against FY '19, putting us on track to deliver our target of halving food waste by 2030.
We have a number of initiatives live in the business, including reduction of food emissions by trialing them all electric kitchens and trials of on-site renewable energy generation to ensure that we continue to push on in this area and ultimately make sustainable operation just part of doing business for the future.
So that is a backdrop to the year ahead with a lot of activity already underway. Whilst we feel confident in where we are and what we plan to do, we are acutely aware that market sentiment for our sector is very poor at the moment, presumably for the macro reasons stated earlier. However, it's worth reminding you that we are still a business backed by 83% freehold or effective freehold estate with strong brands valued at between GBP 4 billion and GBP 4.5 billion with [ GBP 1.2 billion ] of debt. And with a pension deficit, that should disappear by the end of next year -- end of this financial year, which will no longer acquire any contributions.
We've got off to a good start this year, running at 6.5% like-for-like sales growth. And we believe the underlying health of the business is very good in terms of trading. And then the macro headwinds, which we can do little about are and will be temporary. So whilst short-term profit has been negatively impacted, the potential for quick and full recovery once the macro issues abate is very strong. And that is why we're continuing on the same strategic path that we were on pre COVID, as is as valid now as it was then.
As I said in the introduction, and to remind you, we are trading ahead of the market consistently again. We have a solid capital investment program and track record, methodically raising the quality of amenity across the portfolio. And Ignite, our transformation program, is once again in full flow, driving improvements that will be sustained for the way we do business on numerous fronts. So despite the macro environment, we remain confident that the business is on the right path, and we'll now be happy to take your questions. Thank you.
Jamie Rollo from Morgan Stanley. Three, which might all be for Tim, I'm afraid. Tim, first of all, just on the cost mitigation comments earlier, just in terms of the year to scan, it looks like you mitigated about GBP 80 million of sort of GBP 220 million of headwinds, about 1/3. And in the following slide, it looks like you plan to mitigate 2/3 with the arrow going down, I may have misread that. But if you could talk a bit about that. You've obviously not got the government support.
And then secondly, on the pension contribution going down is the blocked escrow account. Does that mean that GBP 40 million, if it carries on, won't come out of all free cash flow. We won't see it and it stays in your consolidated group cash?
And then thirdly, just in terms of the covenants, I've not seen the securitization filings today. But I think the covenants come back in next month. Do you expect to have the need to extend those a bit longer?
Okay. In terms of costs, I mean, that's correct, Jamie, your analysis of last year and where you end up this year. I mean we've got about 40 projects in flight at different stages. Some are robustly delivering benefits other at a very early stage. So it's difficult to commit to a number. But I think if you want to step back, we talked about in the current year a cost headwind of 10%, so GBP 280 million.
We made GBP 240 million last year. I think I can talk about consensus for this year, which is an EBIT of about EUR 190 million. So you've got about GBP 50 million coming down in profit. So that really represents your unmitigated cost headwind with the mitigation coming both through sales or efficiencies sort of shape your number, if you like.
In terms of pensions, yes, so we're committed to make these payments through to the end of September. We hope that once we've signed this triennial, both schemes' contributions will go to a blocked escrow account. I have to be clear that account is under the control of the trustees, not of us, right? So they can call on their account when they want it. It is purely a mechanism in fact that if those are not ever required, it is easier for it to flush back. It's somewhere away from that being the case, but it would give a little bit of flexibility in that scenario.
But we are still writing checks for those amounts for the next 10 months into a bank account that is under someone else's control. So they're still effectively like a contribution.
Covenants, yes. So we're -- January next year is full reinstatement of the securitization covenants already on our unsecured covenants. We talk a lot at length about this in Note 1 to the accounts, which are going concern notes. And what we say there is we have a base case forecast going forward. And under that base case, we would not need to reengage with any of our stakeholders.
However, we have to do what's called a plausible downside scenario, which is sort of the most downside that is still plausible. And when we throw that scenario at it, then we probably would need to sit down with some of our stakeholders are still okay, I think it's important to say from a liquidity perspective, right?
And that when that cash were undrawn at the moment. So we've got a lot of headroom there. But in terms of an earnings and a covenant perspective, we would need to have some more discussions and negotiations. We're going to those with as much confidence as you can do. I think we've done it twice in the last 2 years. We got a good relationship. I think if that's why we end up, it will be a macroeconomic issue. It's not going to be an M&B issue. It will be affecting everybody. So we have a degree of confidence, but it's not totally under our control, of course.
The second question [indiscernible]
I would hope a year from now, you do not see any cash going out into the blocked escrow or any account, right? It just ends as a cash outflow -- the last one being September '23.
Owen Shirley from Berenberg. Three questions, if I may, please. The first is just what year-on-year energy inflation you'd expect if you were to cover all of your needs today?
Secondly, on the recent sort of 9.2% like-for-like. It sounds like maybe 5% of that is price and then the volumes stuck this time. Is there anything -- well, is that right? And then also any comment you could make on impact from the World Cup? And then finally, just how much profit do you estimate you lost in December last year?
[indiscernible] I take on to the energy one, Tim. I mean, just in terms of -- let's start with -- in reverse order. In terms of what did we lose to the festive season. I think broadly, we saw, I think the Omicron impact negated or netted off against the VAT benefit, the way we look and look at it, they're pretty neutral, so sizable in other words because it wasn't just the festive season, it rolled into Jan-Feb as well. So that's sort of the way we look at it, one that of the other.
The 9.3%, yes, I think that you'll split probably about right in terms of price and volume. It's across all our businesses, which is good to see. But as I said earlier, given the moment by the wet-led ones. I think with World Cup, as you probably know, I mean, a normal summer World Cup is probably neutral to M&B, that broad portfolio that Tim's slide shows means that for every site we have the games. We have another one that loses out normally. Having the World Cup at Christmas coming into it, none of us really knew. We were trying to second guess would it be good? Would it be bad? So far, I think it's been mildly beneficial to us. We've done very well on the England games, that first England game, which was on a Monday lunchtime, is perfect.
So filled the pubs and people stayed in there. So some of you probably stayed in the pubs as well. So that did very well. I think with Saturday, this coming Saturday is going to be negative for us. I think no scope in that because whilst the pubs will do very well, the food business will do less well. However, because it is getting near Christmas, maybe there is enough demand for the restaurants to actually have a decent Saturday as well. So we'll see.
But I think when the World Cup finishes, we'll conclude it being mildly beneficial, not more than that because we are so well hedged to be like.
In terms of energy, I mean, obviously, in the first half, we enjoyed the benefit of the cap, sort of take -- we sort of know where our costs are going to be. Now there is a prospect that cap may be extended, particularly for this sector but we can't rely on that. But there's a prospect of that. We'll get to second half versus summer. So that's helpful, but you'd expect some rates to ebb a little bit. I think overall, based on sort of expert forecast that we use, we'd expect this year maybe a GBP 20 million increase on GBP 150 million from last year, something like that. And we're starting to buy forward into the summer quite shortly.
I think your question was if we closed it all out today, what would it cost us? That would cost us more than the GBP 170 million I'm talking about because, I mean, it seems to a quite clear that you're paying quite a significant premium now to buy your energy forward too far just to take risk off the table. So we'll stick with the policy we've got, which is a gradual buying from 6 months out.
Tim?
Tim Barrett from Numis. Two things on cash flow, please. You made a comment around CapEx that you might have spent more if you could have done. And can you just sort of enlarge on that and say what your plans are for 2023?
And then coming back to the pensions point, if you hadn't had that this year and you're hopefully not having it next year, what would you spend the cash, would dividends have been on the table would buybacks be on the table?
Yes. In terms of CapEx, so we spent GBP 122 million in the year just gone. And our ambitions were to get straight back onto our 7-year remodel cycle. So that's a little shy of that.
I mean the frustration in executing it has been both in the supply chain and getting materials and getting labor. So getting people to bid, but also in planning as well. Where we've needed that there's been quite a lot of general planning. So that's what sort of slowed down naturally. I think those are hopefully easing as we come through the current year. So I'll talk in the RNS about maybe spending GBP 200 million this year. So really beginning to accelerate and get that back.
I have to say that GBP 200 million includes sort of between GBP 10 million and GBP 20 million of buying out the remaining equity in the joint venture. So it's not all refer -- probably take GBP 20 million of that, if you like, and GBP 180 million is the normal resub spend. So that's where we'll plan to get to. I think as I say, I think the pressures are easing, but probably the risk is that we underspend that.
Not that we had spent that if when I'm standing here in 12 months' time. In terms of pensions, I mean, if we didn't have the pension outflow, I don't think we'll be paying a dividend today, no. I think particularly in the environment we're in and the cost environment we're in, I think that's a long way from front of mind for us as a Board at the moment.
It's Joe Thomas from HSBC. Just a couple of questions, please. First thing, you're talking about the benefit of what you're talking about the 9.9% capacity that's exited the market. Just wondering what practical benefit you're actually seeing from that? And how much of an uplift to the extent you're able to quantify is coming from that? Or is it sort of secondary capacity?
I was also wondering on liquidity. In the going concern statement, Tim, you say you've got enough headroom for this year. I just wonder how much of that is by the end of the year? Would you be expecting to be drawing down on any of that short-term debt? Because I know you've historically had reluctance to draw down on that.
And then finally, you were mentioning that -- and I think you've answered this in response to Owen's question, but I think you said the volume is up a little bit compared to a year ago. Is that -- so that's -- is that the 5% on price plus, say, 1% on volume is getting into about sort of plus 6% like-for-like sales right now?
So if you look at volumes against a year ago, so drink is doing better. Its volumes are up about 5% and price is up about 6%. Foods volumes are also up, about 6%, 7%, but price is down. The reason price is down because we haven't got the VAT benefit. So there's effectively a negative, there's a price deflation coming through on food. To come to the point, they're both positive volumes sort of 5% to 7%.
Which talks to the point of people beginning to come back to the business, and I think that's one of the things we've been waiting to see and that's starting to come through. What was the other question?
Yes. Yes. Look, I mean, it's funny when you see the headline capacity or supply numbers, you don't see an immediate read across. It's very difficult to quantify because a lot of it is secondary capacity. I think as you'll all know, when -- often when food level, restaurant type businesses close, someone will always come along and think they can do better and open up a new one and then they -- so you still have people coming and taking trade, and then they shut, too.
But there's no doubt, the secondary capacity has and will continue to come out and it must benefit those that remain, but it's very difficult to pinpoint. If a competitor opens on your doorstep, you can see the impact on your sales immediately. When that competitor shuts, you do see a smaller uplift. You now see the full recovery straight away, it takes time. But we sort of -- we have seen that closure thus far. We think in the next first quarter of the new year, we're going to see a lot more because I think it's going to be smaller businesses that will really struggle.
And liquidity, I think, was your other question. I mean you say we're reluctant to draw to 30%. I mean sort of right. So what we've said is we didn't want to pay dividends out of systematically drawing those. I mean they're there for a purpose, and there would be no point having them if you're never going to use them, right? So we don't use at the moment. At the balance sheet date, we have a GBP 190 million cash positive. No facilities drawn, as we stand here today, we're very close to that. We're about GBP 180 million, I think, we looked on Monday.
As we go through, we'll see what this year holds. I think if we manage to get that big CapEx number away, then we will start to draw those facilities. But it will depend on whether we get that CapEx away, and it will depend on where sales and trading remain. But it's certainly a prospect that we would draw those to this year.
Mark Irvine-Fortescue from Stifel. Just one please on the property valuations sort of more of a philosophical one -- the way the sector thinks about valuations through multiples and earnings numbers. Your valuations have held up very well, like others. Do you see any sort of transactional evidence in the sector to -- to look at it from other capital values and other asset classes? Is it coming off as interest rates rise? Do you see any transactional evidence to support?
Yes. I mean we undertake the valuation on the close advice from CBRE, an expert in the [indiscernible]. And CBRE do look at market evidence, right, for which transactions. As you say, Mark, the valuation is a function of a multiple and it's a function of earnings that you apply that multiple to. If you look at this year's valuation, multiples are slightly richer, and that is not because that we're moving them on and actually less of a discount from COVID, right? So they're beginning to get back to where they were before COVID.
The earnings number is slightly lower because up to now, we've been doing our valuation on pre-COVID earnings, so sort of stopping at COVID. So it all seems a bit distant now. So we've had to go through the sort of intellectual exercise at this year and to how we're going to start looking at the last 12 months. And that's led to a slightly lower earnings number.
And at present, the earnings number is slightly stronger than the accretion of the multiple. So that's why we've got a sort of smallish write-down at this point. I think to our mind, they are -- transactions we see are important, but they are sort of long-term valuation. They're not sales prices, by the way. I wouldn't necessarily see that value. But we just use all the information we can get in the market and trying to come up with a sensible sort of stable valuation going forward.
I think that is it. Thank you for your time.
Thank you.