Price surge squeezes pubs group

Harvester and Toby Carvery owner Mitchells & Butlers yesterday warned soaring food and energy prices would continue to squeeze the business into next year.

The group, which also owns All Bar One, said challenges lie ahead from rising inflation and uncertainty around household spending in the UK.

But M&B said its strategy to focus on food sales was well on track after meals outsold drinks for the first time.

The company reported 7.5 per cent total sales growth in food in the 28 weeks to 9 April, while total drinks sales grew 1.7 per cent in the same period.

M&B, which now has nearly 1,600 restaurants and pubs including Edinburgh's historic Sheep Heid and the Hawes Inn in South Queensferry, reported a 14 per cent drop in pre-tax profits to 63 million, but this reflected the 373m sale of drinks-led brand Stonegate.

Douglas Jack, an analyst at brokerage Numis, held his "buy" recommendation on the stock as "trading is good and it should only be a matter of time until dividends are resumed and a new chief executive appointed".

The broker held its forecast for full-year profit at 165.2m, compared to 175m the year before. Shares in M&B closed down 5.2 per cent at 319p.