Mitchells and Butlers Shares Surge on Strong Results and Resilient Outlook

>Mitchells & Butlers, owner of well-known UK restaurant chains such as All Bar One, Browns, Toby Carvery, Harvester and Miller & Carter, has exceeded market expectations in its latest full-year results, prompting a significant rise in its share price. The FTSE 250 company reported that its robust profit performance for the year to September 27 was underpinned by effective cost controls and judicious price adjustments, mitigating challenges caused by recent government budgetary decisions.

The company managed to contain its anticipated annual cost increase, which reached £130 million, representing 6 per cent of its overall cost base. This cost pressure was driven primarily by higher labour expenses stemming from national insurance increases, minimum wage adjustments and ongoing food inflation, most notably in meat prices. Mitchells & Butlers also accounted for changes to the business rates regime introduced in the recent budget.

Since the end of the financial year, like-for-like sales have continued their positive trend, rising 3.8 per cent over the past eight weeks compared with 3.1 per cent in the final quarter of the previous year. For the full year to September, like-for-like sales were up by 4.3 per cent, with growth in both food and drink despite stable volumes. Adjusted operating profit, the company’s preferred metric for underlying growth, increased by 5.8 per cent to reach £330 million. The operating margin improved to 12.2 per cent from 12 per cent, and strong cashflow enabled the reduction of net debt by £146 million to £843 million.

Management reiterated its commitment to countered cost headwinds and expressed confidence in surpassing the eating-out market’s forecast 2.4 per cent growth rate in 2026. The breadth of the company’s estate and offerings contributes to its resilience, supporting incremental market share gains and continued long-term outperformance. The company remains focused on strengthening its balance sheet, maintaining prudence by holding off on shareholder returns despite improved free cashflow and a reduction in leverage.

Mitchells & Butlers shares responded with an increase of 11.7 per cent to 286p, the sharpest rise on the mid-cap index, extending annual gains to around 17 per cent and valuing the business at £1.7 billion. Analysts noted the positive impact of reduced net debt while highlighting that a dividend remains unlikely in the near term as balance sheet repair remains the priority. Market watchers suggest that with a new chief financial officer on board, the company’s capital allocation strategy could evolve in upcoming years as its financial position continues to strengthen.