M&B reports continued outperformance of market, expects full-year profit to be at top end of market expectations: Mitchells & Butlers (M&B), the All Bar One, Toby Carvery and Harvester operator, has said it has continued to outperform the market and expects full-year profit to be at the top end of market expectations. It comes as M&B reported like-for-like sales were up 4.3% for the 28 weeks ended 12 April 2025. For the ten weeks since the period end the business delivered like-for-like sales growth of 6.0%. The company stated: “Looking forward we expect the market to remain robust and believe we are well placed to continue to outperform. Our guidance on cost headwinds for the current financial year remains unchanged, with an anticipated increase of circa £100m before mitigation, representing circa 5% of our cost base, driven primarily by labour costs including increases to both the statutory national living wage and employer national insurance contributions which will impact from the second half. Looking forward to FY26, we will have annualisation of labour cost increases, plus further increases in statutory thresholds, which we would expect to exceed the general level of inflation. These, combined with recent indications of high increases in food costs, notably meat, lead us to anticipate a higher level of overall inflation next year, probably approaching £130m, representing slightly less than 6% of our cost base before mitigation. Notwithstanding future cost increases we believe that the business remains in good shape, supported by a balance sheet that continues to strengthen, with reduced debt and a substantially de-risked pension surplus. We expect to deliver profits at the top end of consensus for the current year.” Total sales across the period were up 4.2% to £1.45bn (2024: £1.40bn), which the company said was driven by strong performances through the brand portfolio. Operating profit increased 10.4% to £181m (2024: £164m). Profit before tax was up to £134m (2024: £108m). The company stated: “We made a good start to the year with like-for-like sales growth of 4.0% over the first seven weeks. Performance over the important three-week festive period was particularly strong with like-for-like sales growth of 10.4%. Across the first quarter as a whole, like-for-like sales remained well ahead of the market, growing by 3.9% despite the notable adverse, albeit temporary, impact of very cold and stormy weather over the last couple of weeks of the quarter. Sales remained resilient through the second quarter aided by good weather in late March, and with a particularly strong performance on Mother’s Day. Across the quarter, we recorded like-for-like sales growth of 4.7%, comprising drink sales growth of 5.1% and food sales growth of 3.6%. We have continued to consistently outperform the market, as represented by the CGA Business tracker, by more than 3% over the first half. Across the market segments reported on by CGA Business tracker. The restaurant segment of the market has delivered broadly flat sales across the period, which we have consistently outperformed. Strong and resilient sales growth combined with effective delivery of our Ignite and capital programmes has driven an increase in both profitability and margins.” During the first half, M&B completed 95 investment projects comprising 87 remodels, five conversions and three acquisitions. The company stated: “We are generating strong returns, currently in excess of 35% on remodels, justifying an increasing allocation of capital to this area as we look to re-establish an average seven-year investment cycle.” Chief executive Phil Urban said: “The strength of our first half performance is driven by continued focus on maximising the guest appeal of our diverse portfolio of brands to drive sales, supported by efficiency initiatives delivered through our Ignite programme of work. We are delighted with the like-for-like sales performance, which continues to outperform against the market. 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.”