WE are on the cusp of advent, but there was a touch of Ebenezer Scrooge in the reaction of the stock market to Mitchells & Butlers.

Shares in the pub giant, which counts Glasgow’s famous Horseshoe Bar among its vast portfolio of outlets, lost as much as 9% of their value during the day following an update to the City that did not seem short of upbeat sentiment.

The owner of brands such as All Bar One, Harvester, and O’Neill’s did report a pre-tax loss of £13 million for the 53 weeks ended September 30, following a profit of £8m the year before, as it felt the impact of the cost crisis that has blighted the industry over much of the last two years. This was despite a strong top-line performance, underpinned by like-for-like sales growth of 9.1% against the previous year.

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Chief executive Phil Urban said company had faced “unprecedented cost headwinds” over the period but expressed confidence that costs were “abating” in the current year, which M&Bs said should allow it to “start to rebuild margins back towards pre-pandemic levels”.

He also said that M&Bs, which has more than 1,700 pubs around the UK, has been encouraged by the like-for-like sales growth it has seen since year-end.

However, there are challenges. On the cost front, it flagged the forthcoming rise in the national living wage, which will increase by 9.8% for everyone over 21 from April, as well as the continuing difficulties posed to consumers by the cost of living crisis.

Perhaps it was these factors, along with a slight slowing of like-for-like sales growth in recent weeks compared with last year, which caused investors to take fright today.

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Russ Mould, investment director of stockbroker AJ Bell, gave this view: “All Bar One owner Mitchells & Butlers’ results got the kind of reception reserved for a flat beer as the company swung to a pre-tax loss thanks to cost headwinds.

“While it says these are abating and sales are growing the company faces some renewed pressure on costs on in 2024 thanks to the increase in the national living wage announced in the Autumn Statement.”

UP The FTSE-100 index at 2:45pm was up 53.62 at 7,477.08.

DOWN Shares in M&Bs were down 19p, or 7.8%, at 223.4p at 3.45pm.