Mitchells & Butlers warns of £130m hit, citing rising costs
Mitchells & Butlers has reported another year of resilient growth, with profits and sales rising across its 1,700-strong pub and restaurant estate. But the group has also warned it faces around £130m in additional costs over the coming year.
The Birmingham-based operator, which owns brands including All Bar One, Harvester, Browns, Toby Carvery and Miller & Carter, said pre-tax profits rose to £238m in the year to 27 September 2025. Revenue climbed from £2.61bn to £2.71bn, supported by a 4.3% uplift in like-for-like sales.
Underlying operating profit increased to £330m, £18m higher than the previous year. The firm said margins had “improved slightly” due to continued cost-mitigation efforts.
The company said it faced cost headwinds of £100m during the year, and warned that it expects around £130m in additional costs over the coming year, driven mainly by higher wages and increasing food prices. The figure includes the impact of the Government’s latest Budget, which will see the national living wage rise to £12.71 an hour for over-21s from April, and an 8.5% increase for 18- to 20-year-olds to £10.85.
“We are pleased to report another year of strong performance,” says Phil Urban, CEO of Mitchells & Butlers. “Like-for-like sales continued to outperform the market across all segments, reinforcing the strength of our strategy and market positioning. Combined with disciplined operational execution, this delivered robust profit growth mitigating sector-wide cost headwinds.
“As we look to the year ahead, we anticipate increased cost pressures across the sector. However, we remain confident in our ability to manage these challenges through our established Ignite improvement programme and disciplined capital investment strategy. Our market-leading estate and diversified guest propositions provide a strong foundation for resilience and growth, enabling us to capture incremental market share and deliver continued long-term outperformance.”
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The company said food inflation, particularly for meat, was adding further pressure to its cost base.
But Mitchells & Butlers PLC saw shares climb by around 10% to 284p on Friday after the trading results were announced.
Mitchells & Butlers said it had made a good start to the financial year, with like-for-like sales up 4% over the first seven weeks. The three-week festive period was described as “particularly strong”, with growth of 10.4%.
Sales remained robust during the second quarter, helped by warm weather in late March and a strong performance on Mother’s Day. Third-quarter growth was also buoyed by the shift of Easter into the second half, with like-for-like sales up 5%.
In the fourth quarter, sales grew 3.2%, supported by solid trading in mid-market pubs and pub restaurants, though performance was slightly weaker in London within the M25 and across more premium venues.
