Mitchells & Butlers PLC (LSE:MAB) has joined a string of hospitality firms in warning over surging costs on the back of last month’s Budget.
Cost headwinds for the year ahead were guided at £100 million in final results on Wednesday, reflecting increased minimum wages and employer national insurance (NI).
“Against a benign backdrop of general inflation, by far the most significant increase is now expected to be in relation to labour costs,” the pub chain said, adding this would increase its current cost base by 5%.
A host of firms have previously sounded the alarm over the likes of higher prices and business failures due higher a NI rate and lower threshold after the Budget.
Mitchells & Butlers also reported a 41.2% increase in operating profit to £312 million for the year just gone, as revenue ticked up 4.3% to £2.6 billion.
Like-for-like sales climbed 5.3% over the year, while its operating margins widened from 9% to 12%.
“Easing inflationary costs and focus on efficiencies” aided “strong profit recovery”, chief executive Phil Urban commented.
“We face increased inflationary cost headwinds in the year ahead,” he added.
“However, we shall remain focused on our established Ignite programme of initiatives and our successful capital investment programme to drive further cost efficiencies and increased sales.”