Mitchells & Butlers PLC (LSE:MAB), the owner of hospitality brands like Miller & Carter, saw its profits soar in the first six months of its financial year as costs began to ease and sales remained robust.
Pre-tax profits reached £108 million in the 28 weeks to April 13, a marked improvement compared to the £40 million achieved in 2023.
Management said the profit surge occurred due to cost inflation abating, leading to operating margins increasing by close to four percentage points to 11.7%.
The Harvester owner noted how hikes to the national living wage were offset by both energy and food price deflation.
Phil Urban, chief executive at M&B, said: “Continued like-for-like sales outperformance against the market coupled with easing inflationary costs and focus on efficiencies has resulted in very strong profit recovery for the period.
“We have confidence that continued focus on effective delivery of our strategic priorities will generate further value from our enviable estate portfolio and customer offers, enabling us to build further momentum throughout the year.”
Sales during the six months lifted by 7% on a like-for-like basis, reaching more than £1.39 billion.
Looking into the second half, the group is continuing to see sales growth across all of its brands and in the last month, revenues have lifted by 5.3%.
Cost headwinds are predicted to come in slightly lower than the £55 million initially forecast, while full-year earnings are expected to reach the top end of consensus.