Increased costs and a weak pound has resulted in a 9.6% fall in pre-tax profit to £75m for pub and restaurant giant Mitchells & Butlers, in its interim results.
Like-for-like sales increased by 1.6%, while total turnover was up by 2.6% to £1.12b.
Phil Urban, chief executive, said: "During the half year we have generated sustained sales growth, whilst consistently out-performing the market. This comes from the good progress we have made in our three priority areas: building a more balanced business; instilling a more commercial culture; and driving an innovation agenda.
"As previously announced, margins have been adversely impacted by increased costs, most notably from wage inflation, property costs and exchange rate movements.
"In order to partially mitigate these costs we have been working hard to encourage our guests to trade up and increase spend per head for a more premium experience whilst challenging our general managers to run their businesses as cost effectively as possible."
Overall, we are pleased with the turnaround in our sales trajectory and relative performance against the market. In a challenging cost and consumer environment we will continue to focus on our three priority areas."
Mitchells & Butlers is the operator of the All Bar One, Harvester, Toby Carvery, Nicholson's, Ember Inns and Browns.