22nd May 2025 09:40
(Alliance News) - Mitchells & Butlers PLC on Thursday said it expects profit to be at the top end of the current consensus for this financial year, as it reported earnings growth in the first half.
The Birmingham, England-based company is an operator of restaurants and pubs, owning chains such as Harvester, All Bar One and O'Neill's.
It said pretax profit climbed 24% to GBP134 million in the 28 weeks to April 12 from GBP108 million a year ago. Basic earnings per share were up 24% to 16.8 pence from 13.6 pence.
Revenue increased 4.2% to GBP1.45 billion from GBP1.40 billion, while operating costs grew 3.3% to GBP1.20 billion from GBP1.16 billion.
The company said like-for-like sales were up 4.3% over the first half due to strong performances in the brand portfolio and supported by "broadly flat" volumes. It said this, combined with "disciplined cost control," drove profit higher.
"The strength of our first half performance is driven by continued focus on maximising the guest appeal of our diverse portfolio of brands to drive sales, supported by efficiency initiatives delivered through our Ignite programme of work," said Chief Executive Phil Urban.
Mitchells & Butlers said in the most recent 10 weeks, which includes Easter and Mother's Day, like-for-like sales have grown by 6.0%.
It expects the market to "remain robust" and believes it is well placed to continue outperforming.
The firm left its guidance on cost headwinds unchanged, with an anticipated increase of GBP100 million driven by labour cost increases from the national living wage and employee national insurance contributions.
Looking ahead to financial 2026, the company expects further increases in statutory thresholds. Alongside increases in food costs, it expects overall inflation next year to approach GBP130 million, or almost 6% of its cost base before mitigation.
Despite this, Mitchells & Butlers said the firm "remains in good shape" and said it expects to deliver profits at the top end of consensus for the current year.
"As we enter the second half of the year, with increased employer national insurance contributions, we remain focused on the effective delivery of our Ignite programme of initiatives and our capital investment programme, driving further cost efficiencies and increased sales.
"Notwithstanding a likely increase in cost headwinds next year, we have confidence that relentless focus on delivery of our strategic priorities will generate further value from our well invested and strategically located estate portfolio and compelling customer offers," CEO Urban concluded.
Shares in Mitchells & Butlers were up 4.0% to 287.00 pence in London on Thursday morning.
By Michael Hennessey, Alliance News reporter
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