Mitchells & Butlers shares slide but pubs giant sees energy and food costs abate
The group runs more than 1,600 outlets—including the All Bar One, Browns, Ember Inns, Harvester, Miller & Carter, Nicholson's, Sizzling Pubs, Toby Carvery, Vintage Inns, and more recently the Ego restaurants.
Shares in Mitchells & Butlers shed 9% as the huge British pubs and restaurants group—where JP McManus and John Magnier own a significant minority stake—said it was confident of battling "unprecedented" energy and food costs inflation and any downturn in consumer spending.
The group runs more than 1,600 outlets—including the All Bar One, Browns, Ember Inns, Harvester, Miller & Carter, Nicholson's, Sizzling Pubs, Toby Carvery, Vintage Inns, and more recently the Ego restaurants.
It is one of the largest stock market-listed pubs groups whose shares have soared by 59% from a year ago, but which still trade below pre-pandemic levels.
For its financial year to the end of September, M&B posted an operating profit of £98m (€113m) compared with a profit of £124m a year earlier, as revenue rose to £2.5bn from £2.2bn in the same period.
It was "encouraged" by trading in October and November which has risen by 7.2% from last year's level, the company said.
"Cost headwinds presented a significant challenge in financial year 2023, but we are seeing clear evidence that these are starting to abate," said chief executive Phil Urban, who added that the company had accounted for a near-10% increase in the UK's national wage that will come into effect in April.
However, "a reduction in energy prices and slowing food inflation, in particular, mean that anticipated overall cost headwinds for the year ahead are expected to reduce to circa £65m. This should allow us to start to rebuild margins back towards pre-pandemic levels", Mr Urban said.
"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," he said. Mr McManus and Mr Magnier own a stake of over 23% in M&B.
