Mitchells & Butlers returns to profit but warns on costs

The company's pretax loss narrowed to £42m in the year to 25 September from £123m a year earlier as revenue fell to £1.07bn from £1.48bn. Adjusted operating profit fell to £29m from £99m.

M&B said profitability and cash generation had been restored since restrictions were lifted in July. Like-for-like sales rose 2.7% in the first eight weeks of the current year compared with 2019. But the FTSE 250 group said higher utility and employment costs were affecting the hospitality sector and there would be a "residual impact" on its performance this year.

Like all pub companies, M&B was hammered by the Covid-19 crisis, which forced premises to close for much of the year. The hospitality sector now faces higher prices for energy and products as well as rising wages fuelled partly by a shortage of workers because of Brexit.

Phil Urban, M&B's chief executive, 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."