Mitchells & Butlers blames cost increases for drop in profits
Pub company Mitchells & Butlers has blamed an increase in cost pressures for its £6m dip in profits.
According to its half-year results for the 28 weeks ended 14 April 2018, profit before tax fell to £69m from £75m during the same period last year. Total revenue increased to £1.13b from last year's £1.12b, and like-for-like sales were up 1.6%.
Chief executive Phil Urban said: "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."
He added that the group has embarked on a "new wave of initiatives" to streamline operations and ensure the business is continually improving to compete.
The impact of snow earlier this year is estimated to have cost the business approximately £12m in lost sales and affected half-year growth by 0.9%.
The group added that trading has been strong since the half-year mark, aided by good weather, and like-for-like sales in the 32 weeks to 12 May grew 1.4%.
Mitchells & Butlers has an estate of 1,691 managed businesses and 59 franchised businesses in the UK and Germany across brands including Harvester, Toby Carvery, All Bar One, Miller & Carter and O'Neill's.
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