Mitchells and Butlers FY profits rise 5.8% to £330m

Mitchells and Butlers has reported that total sales rose to £2.71bn, up from £2.61bn, for the 52 weeks to 27 September, while adjusted operating profits increased 5.8% to £330m for the same period. 

It comes as the pub chain saw like-for-like sales grow 4.3% across the year, while its net debt excluding leases narrowed by £146m to £843m. 

Operating profit increased to £322m from £300m, and profit before tax rose to £238m, compared with £199m a year earlier. M&B’s adjusted operating margin edged up to 12.2% from 12% a year earlier.

Mitchells and Butlers reported strong trading through key periods, including 10.4% like-for-like growth across the festive season. First-quarter sales grew 3.9% despite cold and stormy weather, and second-quarter performance benefitted from favourable weather in late March and strong Mother’s Day demand. Third-quarter sales rose 5%, supported by the later timing of Easter. Growth slowed to 3.2% in the final quarter, with softer trading in London and premium businesses.

Capital investment reached £181m across 216 projects, including 199 remodels. Remodel returns averaged about 35%.

Meanwhile, employee turnover fell to 55% from 64%, with internal progression supporting retention and contributing to improved guest satisfaction.

The company said it had reduced its emissions footprint by 16% from its 2019 baseline and now diverts 99% of waste from landfill. Solar panels have been installed at 244 sites, and gas has been removed entirely from 24 locations alongside electrification of 100 kitchens. Food waste has fallen 23% since 2019.

Looking ahead, the group said trading in the first eight weeks of the new financial year showed like-for-like growth of 3.8%. It expects to remain ahead of a UK eating-out market forecast to expand by 2.4% in 2026. Cost pressures of about £130m are anticipated during the year, driven by higher labour costs and increased food inflation.

The board said it would continue to prioritise strengthening the balance sheet, with shareholder returns considered over time as the group’s securitisation structure matures.

Phil Urban, chief executive of Mitchells and Butlers, said: “We are pleased to report another year of strong performance. Like-for-like sales continued to outperform the market across all segments, reinforcing the strength of our strategy and market positioning. Combined with disciplined operational execution, this delivered robust profit growth mitigating sector-wide cost headwinds.

“We remain confident in our ability to manage these challenges through our established Ignite improvement programme and disciplined capital investment strategy.”