UK's Mitchells & Butlers beats profit view, posts robust start to new year

(Reuters) -British pub and restaurant operator Mitchells & Butlers reported annual profit above expectations on Friday, helped by tighter cost control and robust demand for food and drinks, which also bolstered sales in the new fiscal year.

The company has been relying on price increases and cost cuts to boost margins and refurbishing venues to draw more customers, as the sector reels from higher wage mandates and rising inflation that keeps customers wary of spending.

Still, Mitchells & Butlers said like-for-like sales in the first eight weeks of fiscal 2026 were 3.8% higher, with adjusted pretax profit rising 16.5% to 246 million pounds in the full year to September 27.

Analysts had expected 237.5 million pounds, according to LSEG data.

While Mitchells & Butlers said costs will continue to be a headwind next year, it added it is confident it can mitigate the extra burden.

It forecast 2026 costs of about 130 million pounds ($171.8 million), including the impact of Finance Minister Rachel Reeves' budget that will take more money from workers, people saving for a pension and investors.

Costs in fiscal 2025 stood at 100 million pounds.

($1 = 0.7567 pounds)

(Reporting by Ankita Bora in Bengaluru; Editing by Subhranshu Sahu and Janane Venkatraman)