Irish-backed UK pub group Mitchells & Butlers has reported a narrowing of its annual losses, but has warned rising costs and labour shortages, due to Brexit, may hamper future earnings.
Irish horseracing tycoons John Magnier and JP McManus jointly own – through their Elpida investment vehicle – more than 23% of Mitchells & Butlers, which owns UK pub and family restaurant chains such as O’Neill’s, All Bar One and Harvester.
Mitchells & Butlers reported a £42m (€50m) pre-tax loss for its latest financial year – the 12 months to the end of September – which was down from a loss of £123m a year earlier.
It also showed an operating profit of £81m, up from £8m 12 months prior, and said sales levels in its bars and restaurants have now fully returned to better than pre-pandemic levels.
The company's shares, which have lagged the broader Ftse-250 mid-cap index so far this year, jumped as much as 8% in early trading on the back of the results.
However, the group also warned of challenges ahead due to rising costs for staff and utilities.
It said Brexit had compounded risks around the supply and cost of products as well as labour shortages.
It said it was factoring in lower operating margins in the current financial year compared to pre-pandemic levels, with notable cost inflation across food, utilities and labour.
The group said it was buying ahead to sidestep the potential lack of availability of products.
• additional reporting Reuters