17th May 2023 09:25
(Alliance News) - Mitchells & Butlers PLC on Wednesday said it was optimistic as the medium-term cost outlook was improving, despite inflationary costs putting pressure on interim profit.
The Birmingham-based operator of pubs, bars and restaurants' pretax profit for the 28 weeks that ended April 8 fell by 35% to GBP40.0 million versus GBP57.0 million a year ago.
Operating profit for the first half was GBP99.0 million, a decrease of 17% from GBP121 million a year before. This decrease was primarily due to the withdrawal of UK government support from last year and high cost inflation across supply chains, the company said.
Mitchells & Butlers' revenue increased by 11% to GBP1.28 billion from GBP1.16 billion. This rise reflecting a strong period of trading despite disruptions by industrial action on national transport systems.
"The trading environment for the hospitality sector remains challenging with inflationary costs putting pressure both on the industry's margins and disposable income of our guests," said Chief Executive Phil Urban.
"However, we are encouraged by the resilience of trade to date, including the most recent six weeks at 8.9% like-for-like sales growth, and also by early signs of the medium-term cost outlook improving."
The company's strategic priority is to grow business back to, and beyond, the levels of profit that we were achieving before Covid-19 and the war in Ukraine.
Despite a 'highly uncertain' outlook dependent on consumer confidence, global political developments, and supply chain disruptions Mitchell & Butler said that the medium-term cost outlook was improving. The company was pleased with the momentum it carries into the second half of the year.
The pub chain is prevented from paying dividends by its banking covenants. It has GBP1.66 billion in net debt including leases, down from GBP1.74 billion a year before.
Mitchells & Butlers was trading at 0.9% lower at 193.30 pence on Wednesday morning in London.
By Will Neill, Alliance News reporter
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