All Bar One owner M&B returns to profit despite ‘challenging’ backdrop

The All Bar One and Toby Carvery owner also told investors on Wednesday morning that like-for-like sales have increased by 6.5 per cent since the end of its latest financial year in late September.

M&B said the recovery of sales has been “encouraging” as it has benefited from the return to office working, which has boosted city centre locations.

The company is “cautiously optimistic” but said it remains mindful of cost-of-living challenges for customers, which are expected to continue at least through the current year.

It highlighted cost inflation as a particularly significant challenge, warning that it expects its roughly £1.8bn cost base to increase by between 10 per cent and 12 per cent before efforts to mitigate this.

M&B welcomed the Government energy price guarantee for businesses, which capped prices for six months from the start of October.

However, it said energy costs are still expected to increase this year and there is “significant uncertainty” of prices in the second half of the year.

Earlier this week, the British Beer and Pub Association (BBPA) said pubs across the country could shut without clarity over what will happen to energy costs after the scheme’s current finish date at the end of March.

The company posted an £8m pre-tax profit for the year to September 24, jumping from a £42m loss in the previous year.

M&B said that profits would have been near to pre-Covid levels had it not been impacted by a £70m increase in utility costs over the year.

Meanwhile, revenues more than doubled to £2.2bn following the relaxation of Covid-19 restrictions.

Phil Urban, chief executive, commented: “The trading environment remains highly challenging, with cost inflation continuing to put pressure on margins and we are ever mindful of the pressures that the UK consumer is facing. However, we are encouraged by the strength of sales growth at the end of last financial year which has improved further into the early weeks of this year.

"We remain focused on the delivery of our Ignite programme with existing and new initiatives driving cost efficiencies and increased sales, alongside our capital investment programme. Combined with our diverse portfolio of well-known brands, value proposition, strong estate locations and talented people, we are well positioned to face both the challenges and opportunities ahead.”

The company said its “fantastic team” of more than 46,000 staff are central to the performance of the business, “delivering the all-important experiences guests have with us”.

Mitchells & Butlers’ portfolio of brands and formats includes Harvester, Toby Carvery, All Bar One, Miller & Carter, Premium Country Pubs, Sizzling Pubs, Stonehouse, Vintage Inns, Browns, Castle, Nicholson's, O'Neill's and Ember Inns. In addition, it operates Innkeeper's Collection hotels in the UK and Alex restaurants and bars in Germany.