Mitchells & Butlers – which operates brands including All Bar One, Harvester, Toby Carvery and Miller & Carter – has reported a return to profitability in its latest financial results.
For the year to 25 September 2021, the group reported a pre-tax loss of £42m against a £123m loss the prior year, with total revenue of £1.1b. Like-for-like sales declined by 9.6%, continuing to be affected by coronavirus-related restrictions, but there was a 2.7% sales boost in the eight weeks following the end of the financial year with total sales growth of 0.5%.
The business strengthened its balance sheet during the period through a £351m equity raise and refinanced debt arrangements. The group reported cash balances on hand of £227m, with undrawn unsecured facilities of £150m.
However, Mitchells & Butlers added that rising costs presented "a major challenge" to the sector, particularly utilities and employment costs, and although the company said it was working hard to mitigate these costs as far as possible, "there will inevitably be a residual impact on the current financial year's performance".
Chief executive Phil Urban said: "Despite the inevitable challenges faced by our business over the past year, we are now well-positioned to regain the momentum previously built as we come out of the pandemic.
"The trading environment remains challenging and cost headwinds continue to put pressure on the sector. However, we have strengthened our balance sheet and returned to profitability and cash generation, allowing us to resume our capital plan and Ignite programme, which will deliver sales and efficiency improvements to help combat these challenges. Demand for our well-loved brands has been demonstrated by an encouraging return to sustained like-for-like sales growth since restrictions have been lifted, and we are confident in our ability to continue our recovery as a market leading operator."