Shares in pubs group Mitchells & Butlers (MAB) are up 90% from their October 2022 lows which is roughly where they found support during the pandemic induced sell-off in March 2020.

That may sound impressive, but the shares need to double again to reach their pre-Covid level of 415p. The hospitality sector was not only severely clobbered by lockdowns but also severely impacted by the subsequent rapid rise in energy and food prices, as well as a 10% rise in the living wage.

This means that while sales are forecast to surpass 2019 levels
this year, profits will take longer to fully recover.

In the half year trading update (17 May) despite reporting better than market like for like sales growth of 12.5%, operating costs jumped 14% which pushed operating profit down 17% to £100 million.

But the long-suffering sector may finally be glimpsing light at the end of the tunnel. Mitchells adjusted 2023 inflation guidance
to the lower end of the prior 10% to 12% range and said it expected cost pressures to fall further from 2024.

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