The owner of All Bar One, Harvester and Toby Carvery has today announced lacklustre financial results for the year.
Annual intake across the Mitchells & Butlers portfolio of brands suffered the effects of lockdown restrictions at the start of the year with revenue falling to £1.06bn from £1.47bn in 2020 as sales remained 9.6 per cent below pre-pandemic levels.
The company reduced losses before tax to £42m from £123m in the previous year, somewhat easing shareholder woes as losses per stock dropped from 23.6p to 11.5p.
Phil Urban, chief executive at Mitchells & Butler commented: “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,” he added, noting that the company had strengthened its balance sheet through a £351m equity raise and refinanced debt arrangements.
Looking to the future the company expects operating margins for the year ahead to be lower than those pre-Covid, with notable cost inflation across food and utilities and labour costs resulting from supply chain disruption and staff shortages.
The company said it expects sales to recover incrementally with future years sales through FY 2023 assumed to be 4.5 per cent up on pre-Covid levels, with a further 3 per cent increase in FY 2024.
Matt Britzman an equity analyst at Hargreaves Lansdown, said: ““Conditions earlier in the year couldn’t have been much worse for a large pub operator. Sat on the side-lines with 99 per cent of their staff furloughed, it wasn’t until July that Mitchell & Butlers was able to get fully back in the game.”
Ultimately investors will need to remain patient,” Britzman continued. “Ongoing cost pressures due to rising energy costs are expected to remain, and footfall has been slow to recover in city centres and traditional pubs.”
Mitchell & Butlers share price is up 15.77 per cent this year to date and up 1.61 per cent today.