StockMarketWire.com - Mitchells & Butlers' adjusted operating profit fell 3.1% to £208 million in the year ending 30 September as a result of higher food and drink, property and labour costs.

The pub and restaurant group's operating margin was 0.8 percentage points lower at 14.4%.

Total revenue rose by 2.6% to £2.1 billion led by a growth in like-for-like sales and new site openings.

Like-for-like sales grew by 1.8% with food sales up 1.4% and drink sales up 2.1%.

Average spend per item on food was up 5.6% and average drink spend rose 3.9%, reflecting the impact of pricing and a more premium focus.

Net debt fell from £1.84 billion to £1.75 billion.

Phil Urban, chief executive, said: "This year, we have continued to make progress on our three priority areas: building a more balanced business; instilling a more commercial culture; and driving an innovation agenda. This has resulted in a period of strong operational achievement for Mitchells & Butlers with a sustained return to like-for-like sales growth driving market outperformance. We have also gained agreement with the pensions trustees on future pension contributions which gives clarity to shareholders and pensioners alike.

"Cost headwinds across the industry have adversely affected margins but we continue to work hard to mitigate as much of these as possible through our focus on efficiency and profitable sales growth.

"Overall, we believe that the progress we have made this year positions the Company well to deliver long-term shareholder value."



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