Pub group Mitchells & Butlers eyes pre-COVID margins next year as costs ease

(Reuters) -Mitchells & Butlers on Thursday said easing cost pressures would allow the British pub and restaurant group to rebuild its margins towards pre-COVID levels next year, after posting higher like-for-like sales in the third quarter.

Rising costs have posed a big challenge for the UK's hospitality industry, which has been slowly recovering from the lows of the pandemic although resilient customer spending has helped the sector keep its head above water.

However, pub groups are now expecting the pressures to ease.

"We are working hard to mitigate these pressures as far as we are able (to), both through driving sales growth and implementing efficiencies, which should allow margins to start to rebuild towards pre-COVID levels from next year," the company said in a statement.

Earlier this month, J D Wetherspoon Chairman Tim Martin said the pub chain was expecting better results next year amid signs that soaring food and energy costs were starting to cool.

Birmingham-based Mitchells & Butlers posted a 9.7% rise in quarterly like-for-like sales, helped by strong Father's Day sales in June and steady demand for food and drinks.

The company said it expects the current year's results to be at the top end of market expectations.

(Reporting by Eva Mathews in Bengaluru; Editing by Nivedita Bhattacharjee and Sohini Goswami)