Mitchells & Butlers FY2025 results: sales and profit up, market share gained
Mitchells & Butlers (Harvester, Toby, Miller & Carter and more) has posted another set of robust numbers for the 52 weeks to 27 September 2025. Like-for-like (LFL) sales grew 4.3% and adjusted operating profit rose 5.8% to £330m, with margins edging higher despite heavy cost inflation. Management says trading was ahead of the market across all segments, helped by flat volumes and higher spend per head.
I’ll break down what stood out, why it matters, and the key watch-outs for FY2026.
Headline numbers investors should know
| Metric | FY 2025 | FY 2024 |
|---|---|---|
| Total revenue | £2,711m | £2,610m |
| Like-for-like sales growth | 4.3% | – |
| Adjusted operating profit | £330m | £312m |
| Adjusted operating margin | 12.2% | 12.0% |
| Statutory operating profit | £322m | £300m |
| Profit before tax | £238m | £199m |
| Adjusted EPS | 30.9p | 26.4p |
| Basic EPS | 29.7p | 25.0p |
| Net debt (excl. leases) | £843m | £989m |
| Net debt (incl. leases) | £1,277m | £1,436m |
| Net asset value per share | 476p | 433p |
| Capex | £181m | £154m |
| FY2026 first 8 weeks LFL | 3.8% | – |
Definitions: “Like-for-like” compares sales of sites trading in both periods. “Adjusted” excludes items separately disclosed by the company (revaluations, impairments, etc.).
Sales momentum: ahead of the market all year
LFL sales rose 4.3% for the year, with food and drink both up 4.0%. The step-up was broad-based: Q1 3.9%, Q2 4.7%, Q3 5.0%, Q4 3.2%. Festive trading was a standout at 10.4% growth over three weeks. Management notes consistent outperformance versus the CGA Business Tracker by about 3% across the year.
What’s driving it? Broadly flat volumes but higher spend per head, plus steady execution of the “Ignite” efficiency and sales programme. Pubs and pub restaurants were the strongest categories in the wider market; restaurants were flat and late-night bars fell. M&B has relatively low exposure to late-night, which helped.
Current trading into FY2026 is resilient: LFL up 3.8% in the first eight weeks, despite Budget uncertainty. That’s a decent read-across for Christmas if momentum holds.
Margins and cost inflation: a small win in a tough year
Adjusted operating margin moved up to 12.2% from 12.0%. That’s notable given cost headwinds of about £100m in the year – roughly 5% of the £2.0 billion cost base – mainly labour and National Insurance, with energy stabilising.
Looking ahead, management guides to around £130m of cost headwinds in FY2026 (just under 6% of the cost base) driven by the annualisation of wage increases, higher statutory thresholds and increased food inflation, notably meat. My read: holding margins again will be hard work. The levers will be pricing, mix, more Ignite efficiencies and tight cost control.
Cash flow, debt and balance sheet: deleveraging continues
Strong cash generation funded £181m of capex while still reducing net debt. Net debt excluding leases fell by £146m to £843m; including leases it’s £1,277m, equal to 2.7x adjusted EBITDA. There’s also an undrawn £150m unsecured revolving credit facility and ongoing amortisation of the securitised debt (£130m in the year).
Net asset value increased to 476p per share, helped by property revaluation gains and lower net debt. Importantly, the pension scheme is in surplus and funded £12m of employer contributions in the period, lowering the cash cost of pensions. That’s a quiet but real cash benefit.
The Board is prioritising balance sheet strength. Given break costs and issuance costs within the securitisation, they do not plan to reset capital allocation in the near term. Translation: no dividend this year and no near-term change flagged. Over time, as the securitisation matures, they will revisit shareholder returns alongside investment opportunities.
Investment in the estate: accelerated and paying back
M&B invested £181m and completed 216 projects: 199 remodels, 13 conversions and 4 acquisitions. Remodel returns are running at roughly 35%, which is punchy and supports a plan to restore a seven-year investment cycle. Capex is expected to rise to around £210m in FY2026, with potential for more new sites.
Why this matters: with 83% of the estate freehold or long leasehold and 1,718 sites (1,631 managed), high-return refurbishments can defend share locally and lift cash generation without relying on aggressive new builds.
Segment performance and geographic colour
– Pubs and pub restaurants led market growth; M&B outperformed here.
– The restaurant market was broadly flat, yet the group still outperformed.
– Bars declined across the market, especially late-night; M&B is underexposed and still outperformed.
Q4 was softer in London inside the M25 and in premium concepts, while mid-market pub formats were robust. That mix effect is worth watching into FY2026 if premium customers trade down.
Sustainability and operations: incremental savings add up
The company is progressing towards Net Zero 2040, diverting 99% of waste from landfill and reducing total footprint 16% from 2019. 244 sites now have solar panels; 24 sites are fully off gas and 100 kitchens have been electrified. Operationally, remote energy controls and stock/labour optimisation tools continue to support both costs and service.
Outlook: confident but realistic on FY2026 cost pressures
Management expects the UK eating-out market to grow by 2.4% in 2026 and believes M&B will keep outperforming. However, cost headwinds of about £130m are sizeable. The stated plan is to mitigate through Ignite, disciplined capital, and a diversified, market-leading estate. Early FY2026 trading of +3.8% LFL helps, but the bar for margin expansion is higher this year.
My take for shareholders
What looks positive
- Another year of outperformance: LFL +4.3% against a mixed market.
- Profit growth and margin improvement despite £100m of inflation.
- Rapid deleveraging: net debt (ex-leases) down £146m; leverage at 2.7x including leases.
- High-return capex with remodel ROIs around 35% and rising NAV per share to 476p.
- Pension surplus funding contributions, supporting cash flow.
What to watch
- FY2026 cost headwinds of about £130m – a bigger bite than last year.
- London/premium softness in Q4 and ongoing pressure in late-night (even with low exposure).
- No dividend and no near-term capital allocation reset while securitisation costs remain a constraint.
Bottom line
This is a clean, confident print from M&B: better sales, higher profits, modestly higher margins and lower debt, all while investing heavily at attractive returns. The near-term challenge is cost inflation in FY2026, but the group has multiple levers and a track record of outperformance. If trading stays in the mid-single digits and cash generation continues, deleveraging should remain the quiet compounding engine – and that keeps optionality alive for future shareholder returns.
