Mitchells & Butlers (M&B) has released its full-year financial results for the 52 weeks ended 28 September 2024.
The group made the comments within its full year results release for the year to 28 September 2024, which was published this morning.
The group said that like-for-like sales increased by 5.3 per cent “out-performing against the market as a whole“. Operating profit rose from £98m in 2023 to £300m in 2024, thanks to higher sales and lower costs.
Total revenue for the period was £2.61bn (2023 £2.5bn), with a profit before tax of £199m.
While M&B has made a strong start to its 2025 financial year, with like-for-like sales up 4% in the first seven weeks, cost headwinds are anticipated to total £100m, an increase of just over 5% on its current cost base.
As well as general inflation, the most significant increase is expected to be in relation to labour costs, due both to increases in the statutory National Living Wage and in the recently announced and hotly contested increase in Employer National Insurance contributions, both of which take effect from April 2025.
Chief executive Phil Urban said that while the All Bar One and Toby Carvery owner faced “increased inflationary cost headwinds in the year ahead”, it will “remain focused on its established Ignite programme of initiatives and our successful capital investment programme, to drive further cost efficiencies and increased sales.”
“Coupled with our market-leading estate and customer offers, we are confident that this will enable us to further grow market share and secure continued long-term outperformance,” Urban added.
The company added that it expected sales growth to be driven by price and spending per head, with volumes anticipated to decline in the low single digits.
The firm said that cost pressures during and after the pandemic had previously caused a “widespread and unavoidable increase in prices” and resulted in one per cent of pubs and restaurants closing the year to June 2024. Overall, 15 per cent of venues have been lost since 2020.
“As we move into 2025 we expect more normalised levels of sales growth as the inflationary environment eases. Notwithstanding future cost increases we feel that the business is in very good shape.
“Our balance sheet continues to strengthen, with reduced debt and a substantially de-risked pension surplus, and we expect to out-perform the market driving further profit growth in the year ahead,” the company said.
