Mitchells & Butlers (LSE:MAB) shares fell 6%, to 237.4p, after reporting half-year results that held adjusted operating profit at £181m.
Like-for-like sales grew 3.3% in the half, supported by a strong festive period and a 4.1% rise in like-for-like food sales.
Mitchells & Butlers, the operator of managed restaurants and pubs in the UK and Germany, reported profit before tax of £143m (HY 2025 £134m) and basic earnings per share of 17.9p, with adjusted EPS of 17.4p (HY 2025 16.8p).
Cash inflow before bond amortisation was £98m (HY 2025 £131m) and net debt reduced to £747m, excluding £405m of IFRS 16 lease liabilities (HY 2025 £860m and £438m respectively).
Adjusted operating margin was 12.1%, 0.3 percentage points below HY 2025, and the group said cost headwinds for the current financial year are expected to be c.£120m before mitigation, around 60% weighted to the first half.
For FY 2027 the group expects cost headwinds to normalise to c.£95m before mitigation and said 15% of energy costs for FY 2027 are currently secured.
The results included a £3m net profit after tax on property disposals classified as a separately disclosed item.
"Maintaining profits despite the significant inflationary cost challenges facing the sector is testament to the dedication of our teams in delivering the benefits of our Ignite and capital programmes," Phil Urban, chief executive, said.
