Restaurant chain profits tumble

The owner of Vintage Inns, Harvester and Toby Carvery has warned of a hit from the Brexit-hit pound and soaring wage costs.

Mitchells & Butlers profits tumbled from £126 million to £94m in the year to September 24, despite a turnaround in trading in recent months.

The group said the plunging pound would impact the £100m of purchases it makes in foreign currencies each year, while the introduction of the national living wage has sent its employee costs surging.

CEO Phil Urban cautioned over rising costs.

“We are working hard to mitigate these headwinds wherever possible, both through building on our sales momentum and active management of our cost base,” he said.

The company operates several outlets in Tayside and Fife including the Cambustay in Broughty Ferry and Broxden Manor at Perth.

Mitchells said like-for-like sales fell 0.8% over the year after a “challenging” first half.

However, it returned to sales growth in the final six months.

The group, which employs 43,000 staff, has previously warned over the costs of the new minimum wage.

But it said one helpful sideeffect of the living wage is the recent slowdown in openings of restaurants, which had given the group an opportunity to win back market share.