Pub Group Mitchells & Butlers sees annual results at top end of forecast, shares jump

Sees FY results at top end of market consensus

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H1 adjusted operating profit 164 mln pounds

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Shares among top gainers on FTSE 250

May 22 (Reuters) -

British pub group Mitchells & Butlers on Wednesday forecast its annual results would be at the top end of consensus expectations on easing costs and a pick up in sales, sending its shares up about 6%.

Resilient demand has helped British pub groups during an uncertain economic environment even as high inflation curbs consumer spending.

UK

consumer prices

rose by an annual 2.3% last month, down sharply from a 3.2% increase in March and the lowest since July 2021, but fell less than expected, pointing to persistent price pressures, according to data released on Wednesday.

Analysts had expected annual earnings before interest and tax of about 289.8 million pounds ($369.12 million) and revenue of 2.6 billion pounds at the top end, according to LSEG data.

Shares of the Birmingham-based company, which operates more than 1,700 pubs and restaurants across the UK, jumped 6.2% by 0734 GMT.

Last week, rival J D Wetherspoon also forecast meeting the

upper

end of the market view for its annual profits after posting higher third-quarter sales.

Mitchells said like-for-like sales have grown by 5.3% over the most recent four weeks and there is momentum for further progress going forward into fiscal 2025.

The owner of the Toby Carvery, Harvester and All Bar One brands reported adjusted operating profit of 164 million pounds for the half year ended April 13, up 64% compared with a profit of 100 million pounds a year ago.

Overall cost inflation, which had slowed the recovery pace for pubs in the country after the pandemic, had abated further, the company added.

Analysts at JPMorgan said the company's positive commentary on the resiliency of like-for-like sales and abating cost inflation is "encouraging and should bode positively for the broader UK pubs sector".