Mitchells & Butlers (LON:MAB) shares fell sharply on Wednesday, after the group warned of “unrelenting” cost pressures.
The pub operator said that its like-for-like sales rose by 1.6 per cent in the six months to late April, compared to the same period last year.
The group also noted that sales would have improved by 2.5 per cent, however unseasonably adverse weather conditions brought about by the “Beast from the East” affected profits.
Mitchells & Butlers said it lost approximately £12 million in sales as a result of the snow, but trading improved as a result of the recent hotter temperatures and sunny spells bringing in punters.
Ultimately, total revenues for the six months remained flat, totalling at £1.1 billion. Moreover, pre-tax profit decreased by 8 percent to £69 million, in part due to rising operating costs.
“Margins are being adversely impacted by increased costs, most notably from wage inflation, property costs, energy and food and drink costs,” Chief Executive Phil Urban said, noting that costs were “not going away any time soon”.
Mitchells & Butlers run around 1,784 pub locations across the U.K, with the company headquartered in the UK’s second city – Birmingham.
The group is part of the FTSE-250 Index, and its brands include All Bar One, Miller & Carter Steakhouses, Toby Carvery, Harvester, Browns Restaurants, O’Neills & Nicholson’s.
This follows a promising trading update from City pub group (LON:CPC) on Monday, sending shares up more than 4 percent.
The pub group, which focuses its operations in the South of England saw sales grow 23 per cent for the first half of 2018, after a string of new location openings.
Shares in Mitchells & Butlers are currently trading -5.52 percent as of 11.37AM (GMT).