Profits dip at Mitchells & Butlers after ‘unprecedented’ costs
All Bar One and Toby Carvery owner Mitchells & Butlers (M&B) has revealed sliding profits after it was struck by “unprecedented” cost increases.
However, the hospitality chain said it expects those pressures to abate considerably this year amid an easing in food and energy inflation.
It revealed that operating profits dropped to £98 million for the year to September 30, from £124 million a year earlier.
The company said it was driven by weaker property valuations and increased costs, which also included higher wage bills.
Sales for the year rose to £2.5 billion, up from £2.2 billion last year, with like-for-like growth of 9.1%.
M&B said it has also been “encouraged” by continued sales growth into the new financial year, with like-for-like growth of 7.2% since the end of September.
It said it has confidence for future trading due to stable volumes but bosses said they “are very mindful of the potential implications of the cost-of-living challenge facing guests”.
Phil Urban, chief executive of the group, said: “We are delighted by the continued strength of our trading performance and resilience in the face of unprecedented cost headwinds.
“We have achieved good growth in underlying profit, excluding government support, with like-for-like sales growth across all of our brands and record out-performance against the market.
“Whilst we remain mindful of the pressures that the UK consumer is facing, the strength of our sales growth alongside an abating cost environment gives us confidence for the financial year ahead.”