British pub and restaurant group Mitchells & Butlers has reported a fall in half-year profits and said supply chain costs were still a challenge but had begun to ease.
Details
Elevated costs have challenged the UK's hospitality industry as it slowly recovers from the impact of COVID-19 lockdowns.
"There are indications that cost inflation headwinds across the supply chain are starting to abate, although they continue to present a challenge in the near-term," the company said in a statement.
The company based in Birmingham, central England, posted an almost 17% fall in adjusted operating profit for the half year ended on April 8 from the previous year to 100 million pounds, including government support.
Still, the 125-year old pub group said it was ahead of its prior expectations for the short and the medium term.
Given the retreat in energy prices from peaks hit last year, the company said early evidence suggested that cost increases in other areas, notably food, would soon start to slow.
After record food price increases in Britain, costs are not expected to fall to pre-COVID levels, but there are signs of some deflation in the pub group's cost base, CEO Phil Urban said in an interview with Reuters.
Last year, the pub group initiated plans to cut electricity use and put chemical additives into its heating systems to reduce gas consumption.
Sales growth in the most recent six weeks was at 8.9% on a like-for-like basis from a year ago, the group said.
Marston's And Wetherspoon
Peers Marston's and JD Wetherspoon also reported strong sales in recent weeks, which included the May Bank holiday weekend and the Coronation weekend.
Read More: Pub Group Mitchells & Butlers Flags Mounting Cost Pressures After Profit Jump
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