Mitchells & Butlers reveals energy bills grew to around £150m last year
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All Bar One and Toby Carvery owner Mitchells & Butlers reveals annual energy bill grew to around £150m – and warns it will rise again
- Mitchells & Butlers owns the pub chains Toby Carvery, Harvester and O’Neill’s
- The FTSE 250 company has also been hit by rising payroll and food costs
- M&B blamed the summer heat and railway strikes for sales in recent weeks
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Pub owner Mitchells & Butlers has warned that annual energy costs are expected to be nearly double pre-pandemic levels.
All Bar One owner and Toby Carvery said total energy costs for the past financial year were estimated to be £150m, compared to £80m in the 12 months to September 2019.
It further warned that energy costs would continue to rise this year, despite the government’s incoming energy bill for businesses, which will run for six months from October.
Prices: Toby Carvery owner M&B said total energy costs for the past financial year were estimated to be £150m, compared to £80m in the 12 months to September 2019
The UK hospitality sector has come under progressive pressure from rising bills over the past year, after already being financially hammered by pandemic-related lockdown restrictions.
Birmingham-based M&B said inflationary pressures had initially led to higher payroll and food costs in the second half of the recent fiscal year, before spreading across most of its supply chain.
The FTSE 250 company still managed to grow its fourth-quarter comparable store sales by 1.5 percent, thanks to food sales offsetting a drop in drink orders.
Trade was hit by the summer heatwave and railway strikes, but noted ‘encouraging’ demand over the Bank Holiday weekend in August and solid performance from its premium food-led brands.
This could not prevent the group’s total annual turnover from falling by 1.3 percent due to temporary closures following the emergence of the Omicron variant last winter and the sale of certain locations.
Mitchells & Butlers Shares fell 6.4 percent to 126.5 pence in early morning trading, meaning its value is down about 47 percent over the past year.
Hospitality companies are very concerned that the cost of living crisis will lead to lower sales as higher energy and fuel bills put a strain on the disposable income of millions of Britons.
Phil Urban, M&B chief executive, said: ‘The trading environment for the hospitality industry remains very challenging, with cost inflation putting increasing pressure on margins, and we are also aware of the pressure on UK consumers in the coming months.’
His Shepherd Neame counterpart Jonathan Neame warned yesterday that the Kentish brewer and pub owner is likely to see sales decline this winter due to rising fuel and energy prices.
Neame added that inflationary pressures would mean that the company, Britain’s oldest brewer, would take longer to return to pre-pandemic levels of profitability.
Victoria Scholar, head of investment at Interactive Investor, said: ‘With expectations of a recession in the UK and declining consumer confidence, discretionary spending is likely to struggle with less demand for restaurants and bars going forward.’