Mitchells & Butlers (LSE:MAB) said it returned to profit in the second half of the year to September following the lifting of lockdown restrictions, but the pubs group warned its performance in the current year will “inevitably” be impacted by higher energy prices, rising wage costs and supply chain issues following Brexit.
"Brexit remains an important event for the market and has created risks for the sector, principally around the supply and cost of products and workforce shortages," it said.
The All Bar One and Harvester owner, which operates around 1,700 pubs and restaurants, reported a loss before tax for the year to 25 September 2021 of £42mln, narrowing from a loss of £123mln in the previous year.
Sales fell to £1.06bn from £1.47bn due to restrictions on trading in response to the COVID-19 pandemic.
However, the company swung back into profit in the second half, after trading restrictions were removed, with adjusted operating profit for the final six months of the year amounting to £153mln, compared with a £9mln loss in the same year-earlier period.
Sales also improved in the second half, rising to £846mln from £436mln, reflecting the recovery.
For the eight weeks since the end of the fiscal year, like-for-like sales have grown by 2.7% compared with pre-pandemic FY2019, with food sales up 9.5% and drinks sales falling 4.8%.
The group said volumes remain 10%-15% lower, with sales being driven by increases in spend per head and reduced VAT on food and non-alcoholic drink.
“Whilst uncertainty and challenges still remain, we are encouraged by the demand that we have seen since re-opening, supporting a return to profitability and cash generation,” said chief executive Phil Urban.
Shares were almost 3% higher at 243.00p in early trade.