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Highlights

  • Mitchells & Butlers expects full-year profits to be at the top end of market forecasts, driven by a 4.3% rise in like-for-like sales in H1.

  • Operating profit jumped 10.4% to £181 million, with operating margins improving to 12.4%.

  • The pub group sees continued resilience in the market, despite facing £100 million in cost headwinds this year and £130 million expected in FY26.

Shares in Mitchells & Butlers PLC (LSE:MAB) rose 3% on Thursday as the pub operator behind brands like All Bar One, Harvester, and Nicholson's raised its full-year outlook following its performance in the first half of the financial year.

The company reported a 4.3% increase in like-for-like sales for the 28 weeks ending 12 April 2025. The figures indicate that price increases, rather than volume growth, drove the uplift.

In terms of profitability, operating profit surged 10.4% to £181 million, with the operating margin rising to 12.4% from 11.7% a year ago. The margin improvement is attributed to "disciplined cost control" and continued gains from the company’s long-term efficiency programme, known as 'Ignite'.

Sales Momentum Building

Sales momentum accelerated in the most recent trading period, with like-for-like sales climbing 6% in the last 10 weeks, which covered both Easter and Mother’s Day. The group highlighted that it had outpaced the market during the first half and anticipates further gains, noting that the UK hospitality market remains robust.

CEO Phil Urban struck a confident tone:

“As we enter the second half of the year, with increased employer national insurance contributions, we remain focused on the effective delivery of our Ignite programme and our capital investment strategy."

He added that the company is committed to driving both cost efficiencies and increased sales.

Managing Rising Costs

Mitchells & Butlers continues to navigate rising cost pressures. The company forecasts £100 million in cost headwinds for the current financial year due to increases in National Insurance contributions (NIC) and minimum wage requirements.

Looking further ahead to FY26, the cost headwinds are expected to rise to around £130 million, or nearly 6% of its total cost base. These pressures stem from further likely hikes in statutory thresholds and escalating food inflation, particularly in meat prices.