Mitchells & Butlers PLC (LSE:MAB) shares fizzed up 3% on Thursday morning as the All Bar One, Harvester and Nicholson's pub company said it expects to serve up profits at the top end of market forecast for the current year, as sales grew ahead of the market in the first half and accelerated in recent weeks.
Sales grew 4.3% on a like-for-like basis in the 28 weeks to 12 April 2025, with broadly flat volumes suggesting that price rises were the key.
Operating profits came in at £181 million, up 10.4% year-on-year with an improved operating margin that improved to 12.4% from 11.7% due to "disciplined cost control" and efficiencies from its 'Ignite' strategy.
Over the most recent 10 weeks, including both Easter and Mother's Day in each year, like-for-like sales were up 6%.
Looking forward, M&B said it expects the market to "remain robust" and believes it is "well placed to continue to outperform".
Chief executive Phil Urban said: "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 of initiatives and our capital investment programme, driving further cost efficiencies and increased sales.
"Notwithstanding a likely increase in cost headwinds next year, we have confidence that relentless focus on delivery of our strategic priorities will generate further value from our well-invested and strategically located estate portfolio and compelling customer offers."
The pubco still expects around £100 million of cost headwinds for the current financial year from the NIC increase and higher national minimum wages, but expects to mitigate this.
For FY26, it expects this to increase to around £130 million, representing almost 6% of its cost base before mitigation, based on further increases in statutory thresholds above the general level of inflation, combined with recent indications of high increases in food costs, notably meat.