Rising costs squeeze M&B profit margin

Mitchells & Butlers has posted its results for the 28 weeks ended 14 April 2018, showing like-for-like sales growth of 1.6%, and growth adjusted for impact of snow of 2.5%.

The managed restaurants and pubs operator reported a like-for-like sales growth of 5.8% over the Easter weekend, which moved into the first half.

During the period, the group saw adjusted operating profits stood at £141m (H1 2017 £149m).

The company opened the 100th Miller and Carter steakhouse restaurant over the 28 weeks. Also, digital penetration increased, 120k online bookings were made per week (H1 2017: 80k).

Total revenue stood at £1,130m (H1 2017 £1,123m). Operating profit was £137m (H1 2017 £145m), and profit before tax was £69m (H1 2017 £75m).

Phil Urban, Chief Executive, commented, 'During the first half we continued to deliver like-for-like sales growth against a period of growth last year. This strong performance comes from the progress we continue to make in our three priority areas: building a more balanced business; instilling a more commercial culture; and driving an innovation agenda.

'Success in this highly competitive market is dependent on a continuous stream of improvements, and that is what we are focused on delivering. We have therefore embarked upon a new wave of initiatives which are in their early stages of development, and we believe have the potential to further transform the business.

'As previously announced, margins are being adversely impacted by increased costs, most notably from wage inflation, property costs, energy and food and drink costs. In light of this, our operational teams have performed well to deliver flat underlying profitabilityb in the period.'