Half-year profits have fallen at British pub and restaurant group Mitchells & Butlers, with the company blaming rising operational costs and weaker consumer spending for its woes.
Like-for-like sales climbed 1.6% in the half to £1.13 billion in the six months to 14 April, but would have grown 2.5% had it not been for the ‘Beast from the East’ that swept through the country in March.
Operating profit slipped from £145m at the same stage last year to £137m this time around, while pre-tax profits dropped from £75m to £69m.
Phil Urban, chief executive of M&B, said: “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 profitability in the period.”
Mr Urban said the chain was delighted with the like-for-like sales growth it achieve given it came 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,” he commented.
“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.”
During the half year, M&B completed 224 capital projects as part of a six-seven year and opened its 100th Miller and Carter site.
Capital expenditure totalled £104m, compared to £93m last year, including four new site openings and 220 conversions and remodels.