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Annual Report
and Accounts 2025
Introduction
01 About us/Financial
highlights/Environmental
targets
02 At a glance
06 Welcome to
Mitchells & Butlers
08 Strategy in action
Strategic Report
24 Chair’s statement
26 Chief Executive’s
business review
30 Our markets
32 Our business model
36 Value creation story
40 Our strategic priorities
42 Key performance indicators
44 Our sustainability targets
46 Task Force on Climate-related
Financial Disclosures
52 Risks and uncertainties
60 Compliance statements
– Corporate viability
disclosure
– Non-financial and
sustainability information
statement
– Section 172 Companies
Act statement
62 Financial review
Annual Report
and Accounts 2025
Contents
Governance
66 Governance at a glance
68 Chair’s introduction
to governance
70 Board of Directors
72 Directors’ report
80 Statement of Directors’
responsibilities in respect
of the Annual Report
and Accounts
81 Corporate governance
statement
94 Audit Committee report
98 Report on Directors’
remuneration
Financial Statements
120 Independent auditor’s
report to the members
of Mitchells & Butlers plc
128 Group income statement
129 Group statement of
comprehensive income
130 Group balance sheet
131 Group statement of changes
in equity
132 Group cash flow statement
133 Notes to the consolidated
financial statements
183 Mitchells & Butlers plc
Company financial statements
185 Notes to the Mitchells &
Butlers plc Company financial
statements
Other Information
189 Alternative performance
measures
192 Shareholder information
About us
Financial highlights
Revenue
£2,711m
FY 2024: £2,610m
Statutory operating profit
£322m
FY 2024: £300m
Adjusted operating profit
b
£330m
FY 2024: £312m
Financial review Go to page 62
Environmental targets
Net Zero
c
Greenhouse gas emissions
by FY 2040 (Scope 1, 2 & 3)
Zero
Operational waste to landfill
by FY 2030
50%
Reduction in food waste
by FY 2030
Sustainability targets Go to page 44
a. As at 27 September 2025.
b. The Directors use a number of alternative performance measures (‘APMs’) that are considered critical to aid understanding of the Group’s performance.
Key measures are explained on pages 189 to 191 of this report.
c. As defined on page 51.
For over 125 years the Group has been at the forefront of
UK drinking and eating out, running many of the UK’s most
beautiful and iconic pubs and restaurants. We employ over
50,000
a
people in pubs, bars and restaurants that are located
across the UK and in Germany.
We are a leading operator of managed restaurants and pubs
with 1,631 largely-freehold managed businesses representing
some of the most popular brands and formats in the UK.
Our scale is impressive. In FY 2025 we served over 100 million
meals, and over 320 million drinks.
Our strategy remains focused on our three priority areas of
building a more balanced business, instilling a commercial
culture, and driving an innovation agenda, whilst pursuing our
purpose of being the host of life’s memorable moments, bringing
people and communities together through great experiences.
Mitchells & Butlers plc Annual Report and Accounts 2025
01
Strategic Report
Governance Financial Statements Other InformationIntroduction
Our brands
Our balanced portfolio of recognised and diversified brands and
formats is loved and trusted by our guests, with 65% home-grown
and over 75% in existence for over 20 years.
Mitchells & Butlers
at a glance
44 sites
Alex city centre bars and brasseries
offer all day menus and drinking
across Germany.
45 sites
All Bar One bars are modern and
cosmopolitan serving food and drink in
bright, contemporary environments
positioned in city-centre locations.
28 sites
Browns restaurants are mainly located
in city centres around the UK and offer
casual, elegant, brasserie dining often
in landmark architectural buildings.
103 sites
Castle pubs are a collection of eclectic
urban pubs, with each pub having an
individual character to suit its community.
The pubs are located in city and
suburban areas.
33 sites
Ego restaurants are Mediterranean-style
family restaurants based across the UK.
The brand was fully acquired in 2023,
having operated as a joint venture
since 2018.
149 sites
Ember Inns are local pubs with an
individual name offering food with a wide
range of cask ales. They are in prominent
residential locations.
Annual Report and Accounts 2025 Mitchells & Butlers plc02
Introduction
143 sites
Harvesters are pub restaurants in
suburban roadside locations, principally
targeting families. They are well-known
for spit-roast chicken, smoked ribs,
burgers and the salad cart.
63 sites
Our High Street pubs are unique,
individual pubs located in high footfall
locations in cities and towns throughout
the UK. The pubs offer music, sport and
enjoyable hospitality at competitive
prices points.
133 sites
Miller & Carter are steakhouse restaurants
offering premium-grade beef. They are
designed to be the steak lover’s
destination for everyday and special
dining-out occasions.
82 sites
Nicholson’s has been in operation since
1873 and is famous for its extensive cask
ale and pie range. Nicholson’s sites include
examples of historic, authentic pubs in the
United Kingdom.
42 sites
O’Neill’s are Irish bars located in city and
town centres as well as on suburban high
streets. O’Neill’s offers live sports and,
in larger sites, entertainment through
music rooms.
12 sites
Located in the North West and Midlands,
Pesto offers authentic and freshly
prepared Italian small plates at sensible
prices in an informal, relaxed setting.
123 sites
Premium Country pubs are a collection
of individual pubs situated in both rural
and suburban areas. The pubs have
contemporary dining rooms and bars and
many have terraces for al fresco dining.
228 sites
Our suburban pubs are typically located
in densely populated residential areas and
are local community pubs serving ‘value
for money’ food on sizzling skillets.
82 sites
Stonehouse pubs offer freshly-carved,
slow-cooked roasts, and stone-baked
pizzas along with other pub classics.
149 sites
Toby Carvery is one of the leading brands
in the UK carvery sector. It aims to offer
a good value and varied menu of roasts
from its famous carving deck. The sites are
generally in suburban roadside locations.
172 sites
Vintage Inns are traditional country pubs
serving freshly cooked food with a wide
range of beers, spirits and great wines at
fair prices.
Mitchells & Butlers plc Annual Report and Accounts 2025
03
Strategic Report
Governance Financial Statements Other Information
Mitchells & Butlers at a glance continued
Our performance
Our property
Our brands
Our people
We are a highly cash generative
business with a long-term strategy
to transfer debt to equity as debt
is paid down.
We have a freehold estate of large,
well-positioned pubs and restaurants
with high amenity levels.
We have a diversified portfolio
of proven, established brands.
We have a proven senior
management team and depth of
talent. Highest-ever employee
engagement scores.
£16m
of cash flow generated in FY 2025
83%
of our pubs are freehold and long leasehold
with major investment planned every
seven years
65%
home-grown and over 75% in existence
for over 20 years
Our value
proposition
Our business has unique
strengths that enable us
to create value for our
stakeholders.
Annual Report and Accounts 2025 Mitchells & Butlers plc04
Introduction
Our people Our pubs
Our people are fundamental
to the delivery of great
experiences for our guests.
1,631 managed businesses with favourable spread of locations,
price points and occasions. This leaves the business well-hedged
against changes in consumer taste.
50,000+
Employees making us one of the largest
employers in the industry
9%
Retail staff turnover reduced by 9 percentage
points to 55% due to the effective delivery of our
People Promise
1,560+
Apprentices currently in learning
UK sales by region (FY 2025)
London
21%
South East
(excluding
London)
14%
Wales 4%
East of
England
8%
East Midlands 5%
North West
10%
North East 3%
Scotland 5%
South West 7%
Yorkshire and
Humberside 8%
West Midlands
15%
Employees
Go to page 37
Mitchells & Butlers plc Annual Report and Accounts 2025
05
Strategic Report
Governance Financial Statements Other Information
Mitchells
& Butlers
Welcome to
Annual Report and Accounts 2025 Mitchells & Butlers plc06
Introduction
Our purpose is to be the
host of life’s memorable
moments, bringing people
and communities together
through great experiences.
We are pleased with our performance over the year,
in which we remained consistently ahead of the market,
across all market segments. Sales growth has been
broad-based, with strong like-for-like performances
in both food and drink across our portfolio of brands,
supported by cost efficiencies and a capital programme
which continues to deliver strong returns.
We remain committed to our Ignite programme
of initiatives and our successful capital investment
programme, driving further cost efficiencies and
increased sales. We have confidence that continued
focus on effective delivery of our strategic priorities
will generate further value from our enviable estate
portfolio and customer offers and give us a strong
foundation for continued longer-term outperformance.
Sustainability and respect for the environment remain
central to everything we do, with some notable progress
during the year, including investment in removing gas as
an energy source from our estate as well as a significant
reduction in waste to landfill.
Our purpose is to be the host of life’s memorable
moments, bringing people and communities together
through great experiences. We will achieve this through
the successful implementation of our three-pillar
strategy which has delivered significant business
improvement over the past ten years. Over the next few
pages, we examine this strategy in detail, illustrating it
through the work done by our teams to delight our
guests and build a sustainable business during 2025.
Phil Urban
Chief Executive
Mitchells
& Butlers
Mitchells & Butlers plc Annual Report and Accounts 2025
07
Strategic Report
Governance Financial Statements Other Information
Build
balanced
business
a more
Strategy in action
Annual Report and Accounts 2025 Mitchells & Butlers plc08
Introduction
At Mitchells & Butlers, we
maintain a balanced and
high-quality estate of pubs,
bars, and restaurants across
a stable of leading brands.
Our diverse portfolio of
brands and prioritisation
of capital investment enables
us to maximise the value of
our enviable estate.
Our estate is 83% freehold, giving us a strong foundation
for long-term value creation. This ownership model
enables us to invest with confidence, driving returns
through our targeted capital programme while
improving amenity levels and overall guest experience.
We have targeted a seven-year cycle of reinvestment,
ensuring we continually raise the average quality of our
amenity and keep each brand feeling fresh, relevant,
and competitive in its market. Each year, we evolve our
pricing, product ranges, service styles, and team training
within each brand format. This ensures we preserve the
distinctive identity of each offer while benefiting from
the economies of scale and operational excellence that
Mitchells & Butlers provides.
We remain confident in our ability to generate strong
returns from capital investment while enhancing the
quality, relevance, and sustainability of our estate.
By combining disciplined asset management with
innovation and brand stewardship, we are well-
positioned to deliver continued growth and long-term
value for shareholders.
216
investment projects in FY 2025
£181m
invested in our estate in FY 2025
balanced
business
Mitchells & Butlers plc Annual Report and Accounts 2025
09
Strategic Report
Governance Financial Statements Other Information
Our aspiration is to maintain a seven-year cycle
of investment across the estate, with flexibility
built in where trading performance or condition
justify it. This ensures we invest where returns are
most compelling while maintaining high overall
amenity standards.
In FY 2025, we invested £181m in capital projects,
delivering 212 remodels and conversions, and 4
acquisitions as well as continued strategic
maintenance across the estate. These investments
are currently delivering excellent returns. Our
capital programme is a key driver of continued
like-for-like sales growth and incremental profit.
Our broad brand portfolio gives us strategic
flexibility. Where needed, we can reposition
or convert underperforming sites into higher-
performing formats, ensuring the estate is
optimally configured by brand and location.
In addition to brand-focused projects, our capital
programme includes investment in kitchen
equipment, technology upgrades, and essential
maintenance, all of which support operational
resilience and guest satisfaction.
Capital investment –
a key driver of growth
Capital investment is a central pillar of our value
creation strategy.
17%
incremental return on
expansionary capital
THE ANGEL, ISLINGTON
THE ENGINEER, PRIMROSE HILL
THE ENGINEER, PRIMROSE HILL
Strategy in action continued
Annual Report and Accounts 2025 Mitchells & Butlers plc10
Introduction
We are making significant progress against
our Net Zero roadmap through comprehensive
upgrades to our buildings, kitchens, and
energy systems.
This year, we installed solar panels at 93 sites,
generating renewable energy on-site and
reducing our reliance on the grid. We have also
taken decisive steps to reduce our reliance on gas
as an energy source across parts of the estate
which is a key priority for reducing emissions.
Currently, we operate 100 sites with all-electric
kitchens, and 24 sites have fully transitioned away
from gas in favour of renewable electricity.
In addition to these energy-focused initiatives,
our commitment to sustainability extends to the
efficient reuse and recycling of equipment and
furniture. Through our capital and maintenance
investment plans, all surplus kitchen equipment
is recycled, with over 1,270 pieces of equipment
refurbished and reused over the last five years.
We also prioritise the upcycling, recycling, and
refurbishment of existing internal furniture as part
of our capital project investments. This approach
has enabled us to fully furnish two sites with
upcycled furniture, saving hundreds of pieces
from waste.
Furthermore, the reuse of existing IT equipment,
including tills and PDQ machines, has become a
routine practice embedded in both planned capital
projects and reactive repairs and maintenance.
Together, these initiatives not only reduce our
environmental impact but also enhance energy
efficiency and support long-term cost control.
As part of our ongoing sustainability agenda,
we will continue to invest in decarbonisation
technologies and further reduce the
environmental footprint of our estate.
Investing in a more
sustainable estate
Environmental responsibility is deeply embedded into our capital programme,
with sustainability considerations factored into every investment decision.
100
sites with all-electric kitchens
THE DEWDROP, OXFORD
THE MALL, BRISTOL
THE TOOTING TAVERN, TOOTING
Mitchells & Butlers plc Annual Report and Accounts 2025
11
Strategic Report
Governance Financial Statements Other Information
Instil
commercial
culture
a more
Strategy in action continued
Annual Report and Accounts 2025 Mitchells & Butlers plc12
Introduction
commercial
culture
At Mitchells & Butlers, we
are committed to instilling
a strong commercial culture
throughout the business.
Our talented and dedicated team of operators is central
to our success, and we are focused on equipping them
with the support, information, and tools they need to
drive sales growth and deliver operational efficiencies.
Our guest-centric approach is informed by robust
insight and data, enabling us to make decisions that help
us to consistently outperform the market and achieve
best-in-class guest review scores. We understand the
importance of every pound of sales converting to
bottom-line profit. This commercial mindset drives
a disciplined approach to ensuring each initiative is
financially well-planned, executed with rigour, and
contributes to profit growth.
At the heart of this commercial culture is Ignite, our
ongoing transformation programme and way of working
that embraces continuous improvement. Ignite is not
a one-off project but an evolving, dynamic portfolio of
40 to 50 simultaneous initiatives that span the business,
managed by a dedicated small project team.
4.3%
Like-for-like sales
a
growth
£330m
Adjusted operating profit
a
, up 5.8% on FY 2024
a. The Directors use a number of alternative performance measures
(‘APMs’) that are considered critical to aid understanding of the
Group’s performance. Key measures are explained on pages 189
to 191 of this report.
Mitchells & Butlers plc Annual Report and Accounts 2025
13
Strategic Report
Governance Financial Statements Other Information
The philosophy behind Ignite acknowledges that
there is no single silver bullet to growing profit in
a business of our scale. Instead, by driving
incremental improvements on multiple fronts,
we achieve meaningful, aggregated results.
Examples of the areas we focus on are shown below:
Cost inflation
Product development
Sales
Capital investment
Productivity
Data driven insights
Our spaces
Stock management
Loyalty
Sustainability
Better bevs
Training
Key current areas of focus include:
Revitalising underperforming assets
Through systematic efforts to reposition and
enhance the lower-performing parts of our estate,
we aim to unlock significant latent value.
Enhancing delivery channels
We have partnered with a well-established
third-party delivery brand to broaden our appeal
and strengthen our offering in the growing
delivery market.
Harnessing AI technology
We are exploring AI applications to improve guest
experiences, especially focusing on optimising
the booking journey to increase conversion rates
and reduce lost leads.
Optimising table management
Using advanced software to maximise table turns
during peak times, ensuring we get the most out
of our trading hours.
A recent launch under Ignite was our new
employee app, which centralises access to
payslips, benefits, and internal communication.
We have also increased our focus on the drinks
side of the business, including optimising beer
front layouts across sites, improving cellar
practices, and perfecting serves. We anticipate
these efforts will rapidly contribute to bottom-
line improvement.
Capital expenditure projects are undergoing a
detailed review to improve efficiency and reduce
costs. This includes analysing project timelines,
minimising closure and reopening days, and
managing reopening costs such as training and
launch activities. We are also scrutinising sites that
have underperformed relative to post-investment
expectations to inform future decisions.
Our commitment to sustainability is integral to
Ignite. Environmental impact reduction initiatives
focus on lowering water consumption, identifying
key measures to achieve this, and delivering both
cost savings and improved efficiency.
Sustainability also involves changing on-site
behaviour around waste segregation compliance
and resource conservation. We support this
through a dedicated network of sustainability
ambassadors who drive engagement and
cultural change.
Ignite initiatives and the
role of continuous improvement
40+
Ignite initiatives
currently underway
Strategy in action continued
Annual Report and Accounts 2025 Mitchells & Butlers plc14
Introduction
A vital pillar of our commercial culture is rigorous
cost control combined with operational discipline.
Ignite has equipped our General Managers with
enhanced tools and systems that enable more
effective labour management, including a
sophisticated rostering system designed to align
staffing with demand patterns and reduce labour
costs without compromising service quality.
Stock control has improved significantly, with
tighter procedures reducing waste and shrinkage.
Rationalising our product procurement has
allowed us to reduce overall stock holdings,
freeing up capital and improving cash flow.
Additionally, better access to central suppliers has
enabled us to curb petty cash expenditure and
strengthen financial oversight across the estate.
Our people remain fundamental to our
commercial success. Their delivery of exceptional
guest experiences underpins our profitability.
We are proud to report our highest ever
engagement score, alongside record low turnover
rates. These metrics reflect a workforce that is
motivated, aligned with our commercial goals,
and committed to driving the future success of
Mitchells & Butlers.
Through continuous reinforcement of commercial
discipline, combined with targeted Ignite initiatives,
we are building a resilient, profitable business
that balances growth with efficiency. This dual
focus enables us to enhance guest satisfaction,
grow market share, and deliver long-term
shareholder value.
Cost controls and
commercial discipline
A vital pillar of our commercial culture is rigorous cost
control combined with operational discipline.
2%
year-on-year reduction in
energy consumption
9
percentage points reduction
in retail staff turnover
Mitchells & Butlers plc Annual Report and Accounts 2025
15
Strategic Report
Governance Financial Statements Other Information
Strategy in action continued
Drive
innovation
agenda
an
Annual Report and Accounts 2025 Mitchells & Butlers plc16
Introduction
At the heart of our growth
strategy is a relentless
commitment to innovation.
We recognise the importance of keeping our brands and
formats fresh and relevant within their respective market
segments, ensuring they consistently meet evolving
consumer needs. Embracing technology plays a critical
role in this journey, allowing us to enhance operational
efficiency and elevate the guest experience. Our
comprehensive digital strategy aims to engage consumers
across multiple platforms, creating meaningful connections
in an increasingly digital world.
We are also dedicated to fostering new product and
concept development, driving creativity and
differentiation in everything we offer. Furthermore,
leveraging our scale and collaborative relationships
with our suppliers allows us to develop and trial
new products.
Over the last few years, we have also expanded our
marketing efforts by adopting new social media platforms
and introducing personalised website content,
improving how we target and engage with different
customer segments.
4.6
average guest review score out of 5
innovation
agenda
Mitchells & Butlers plc Annual Report and Accounts 2025
17
Strategic Report
Governance Financial Statements Other Information
The day-to-day operation of the business has
rapidly changed over recent years and will
continue to do so, and each of these tools
therefore still has significant potential for further
enhancement. Technological innovation also
contributes towards our sustainability goals;
this year we expanded our use of the Internet
of Things which allows us to remotely control
high energy consumption equipment in our
businesses, delivering significant cost and
emissions reduction.
Digital marketing
and guest feedback
We are also focused on making digital marketing
an engine room for the business with a consented
database of 13.9 million guests. In 2024 we
launched My Account which allows guests to
have a single portal to access their bookings,
orders and offers from multiple brands. We already
have 5.6 million consented guests signed up to
this, with a far younger profile and an increased
frequency of visit.
We continuously evolve in this space, with
ongoing projects including a significant upgrade
to our CRM system; a trial of a third-party delivery
brand and more points-based loyalty schemes to
further incentivise repeat customer engagement
and strengthen brand loyalty.
We use technology to collate guest feedback and
to inform menu development by analysing large
quantities of data to spot trends in relation to dish
choice and then make menu changes to satisfy
guest needs.
Optimising business performance
through technology
In the last few years, we have introduced a significant
amount of new technology, from online booking engines;
to auto-ordering which helps to minimise instances of stock
outs and minimise waste; to a new labour rostering system
which ensures we have the right number of team members
working depending on the day’s trading pattern, as well as
order and pay-at-table systems.
12
loyalty programmes
offered currently
Strategy in action continued
Annual Report and Accounts 2025 Mitchells & Butlers plc18
Introduction
The Ignite programme has developed our
organisational skills to deliver business change.
Our teams have become adept at handling
change, embracing new technology and adapting
to new challenges and processes. Each of our
brands constantly evolves, as do our product
ranges, stretching our offering and ensuring we
are quick to market to capitalise on market trends.
We work closely with our suppliers in the space,
having a valuable symbiotic relationship with
them in terms of testing new ideas quickly. This
year, for example, we changed the packaging of a
soft drink from glass bottles to cans, contributing
to our sustainability efforts as glass packaging has
higher associated emissions as well as delivering
commercial benefits.
Building a culture
of innovation
We have a culture which embraces new
product and new concept development.
871
sites with Internet of
Things capability
Mitchells & Butlers plc Annual Report and Accounts 2025
19
Strategic Report
Governance Financial Statements Other Information
Caring
Strategy in action continued
community
for
Annual Report and Accounts 2025 Mitchells & Butlers plc20
Introduction
Caring
Homes
Social Bite’s innovative villages provide supported housing
where people can rebuild their lives in a safe, nurturing
environment. We are exploring opportunities to help bring
this model to the Midlands, alongside the villages already
operating in Edinburgh, Glasgow, and Dundee.
Food
Social Bite uses food not just to nourish but to connect and
engage. Their coffee shops distribute over 150,000 free
meals annually to those impacted by homelessness, and we
support these efforts alongside local food projects aimed at
helping vulnerable people in our communities. Customers
are invited to “pay it forward” meaning that as well as buying
their own hot drink, sandwich or cake, they make a donation
for someone else to enjoy a meal at one of the Social Bite
coffee shops. We are working with Social Bite to open a
coffee shop in Central Birmingham in 2026.
Looking ahead
We are proud of what we have achieved with Social Bite so
far, but our work is far from done. By continuing to invest in
fundraising, employment opportunities, and community
projects, we are determined to break the cycle of homelessness
and build a better future for our people, our communities,
and those who need us most.
Our partnership with
Social Bite: taking action
to end homelessness.
At Mitchells & Butlers, caring for our community is one
of the core pillars of our sustainability strategy.
Since 2020, we have proudly partnered with Social Bite,
a charity and social business dedicated to tackling
homelessness across the UK. They provide homes, jobs,
food and support to empower people to transform their
own lives. Together, we’ve raised over £1.2m through the
incredible fundraising efforts of our people – an
achievement that also unlocked an additional £500,000
contribution from Mitchells & Butlers to support Social Bite.
Our partnership goes beyond fundraising. We are deeply
committed to creating real change by providing employment
opportunities, supporting the development of new homes,
and helping deliver vital food services to those in need.
How we help Social Bite
Jobs
Unemployment is disproportionately higher for people who
have experienced homelessness or are currently homeless,
with just 6 in every 100 in a job, compared to 70 in every 100
for the general population. To date, through Social Bite’s
Jobs First programme we have placed 36 people who have
experienced homelessness into roles within our venues
across London and Scotland. We provide ongoing support
for both our new team members and managers, ensuring
everyone has the tools to succeed. We’re excited to expand
this programme further across our estate.
£1.7m
donated to Social Bite, £1.2m through employee
fundraising with a further £500,000 unlocked from
Mitchells & Butlers.
community
Mitchells & Butlers plc Annual Report and Accounts 2025
21
Strategic Report
Governance Financial Statements Other Information
“Social Bite and Harvester didn’t
just give me a job, they gave me
confidence and independence.
With weekly support from my
Development Worker and
encouragement from my
manager, I was able to build a
future I never thought possible.
Comfort Mensah’s journey with us began at
a time when she faced an uncertain future.
A master’s student from Ghana, she had been
staying with a family temporarily, but the
arrangement was coming to an end, and the
prospect of rough sleeping loomed. With only
£500 saved, Comfort was desperate to find stable
work and housing as winter approached.
When Comfort learned about a job opening at
Harvester specifically designed for people who
had experienced or were at risk of homelessness,
she took a chance and applied. What followed
was a lifeline. Social Bite connected her with
Ambreen, a Development and Support Worker
who guided her through the interview process
and checked in with her regularly. This personal
support helped Comfort build confidence and
navigate challenges she had never faced before.
Her manager, Mel, at Harvester saw her potential
from the start, welcoming her warmly and
ensuring she had the training and encouragement
needed to thrive. Comfort recalls her excitement
when she got the job and how meaningful her first
pay cheque was. It wasn’t just income, it was a
symbol of independence and self-worth.
Although she had no prior hospitality experience,
Comfort threw herself into her training, acing her
tests and learning quickly. Her positive mindset
and determination carried her through, and after
a month of part-time sessions, she transitioned to
full-time work.
Over the next eight to nine months, Comfort’s
confidence grew. With the ongoing support of
her manager and Social Bite, she learned
customer service skills, adapted to the fast-paced
environment, and began to see herself as an
important member of the team. For Comfort,
the job wasn’t just work, it was a pathway out of
vulnerability and a chance to build a brighter future.
Comfort Mensah’s Story:
how a job at Harvester made a difference
COMFORT MENSAH
Strategy in action continued
JOSH LITTLEJOHN, MBE, FOUNDER OF SOCIAL BITE
Annual Report and Accounts 2025 Mitchells & Butlers plc22
Introduction
“The support and
investment that Mitchells
& Butlers give the Jobs
First programme is
invaluable. It’s inspiring
to see people join and go
from strength to strength.
Employment and a safe
home restore self-esteem
and purpose in a person’s
life, and being part of
that journey is incredibly
rewarding.”
Chris Kelly plays a crucial role as a Development
and Support Worker embedded within Mitchells
& Butlers. With over a decade of experience in
recruitment and employment, Chris joined Social
Bite because he wanted to use his skills to make a
real difference for people affected by homelessness.
Working exclusively with Mitchells & Butlers,
Chris acts as a bridge between potential
employees with lived experience of homelessness
and our venues. His role involves understanding
the culture and needs of each venue, collaborating
closely with recruitment and training teams, and
ensuring the Jobs First programme fits smoothly
within our business.
From the start, Chris has been fully supported
by Mitchells & Butlers’ internal teams, including
recruitment and training partners, which has
allowed him to immerse himself fully in the
organisation’s culture. This integration means
Chris can offer tailored support that meets both
the needs of our new team members and the
expectations of managers and colleagues.
A big part of Chris’s work is being a visible
presence on the ground. He supports candidates
through the entire recruitment journey, from
application to settling into their roles, and is
always available to advise managers and staff.
Chris actively dispels myths around homelessness,
promotes inclusion, and encourages teams to see
the value that Jobs First employees bring.
Through his work, Chris has witnessed remarkable
transformations as individuals gain confidence,
complete training, and develop personally and
professionally within Mitchells & Butlers.
Supporting our team
and managers to succeed
36
people employed in Jobs
First programme to date
Mitchells & Butlers plc Annual Report and Accounts 2025
23
Strategic Report
Governance Financial Statements Other Information
Chair’s statement
Despite a persistently challenging
external backdrop, our business has
once again outperformed the market
– a testament to the strength of our
offer, the resilience of our operations,
and the calibre of our people.
Performance and strategy execution
We are encouraged by the strong trading
momentum throughout the financial year, with
like-for-like sales once more exceeding sector
benchmarks. This growth, combined with
disciplined cost management and the positive
returns from our capital investment programme,
has enabled us to mitigate the impact of
significant inflationary pressures and deliver
a robust financial performance.
Our focus remains firmly on sustaining the
relevance, quality, and competitiveness of our
brands. Continued investment in our estate
ensures our offer remains fresh and compelling,
while the Ignite transformation programme
provides a structured and effective framework
for ongoing operational improvement. This has
enabled us to manage cost headwinds and drive
performance across the business.
People and culture
Our people are the foundation of our success,
and I am proud of the strong people metrics
achieved during the year. Employee engagement
is at an all-time high, and staff turnover has reduced
further to record low levels – reflecting the
strength of our culture and the deep commitment
of our teams. These results underscore the shared
ambition across our workforce and the collective
drive to deliver great guest experiences every day.
Purpose and social impact
Our purpose – to be the host of life’s memorable
moments, bringing people and communities
together through great experiences – continues
to guide everything we do.
The consistent outperformance of our brands
compared to competitors reaffirms the strength
of our proposition and our ability to deliver on
this purpose.
Annual Report and Accounts 2025 Mitchells & Butlers plc24
Introduction
Strategic Report
We remain committed to creating positive
social impact. Our partnership with Social Bite,
a social enterprise addressing homelessness,
has continued to flourish. Social Bite distributes
almost 150,000 free meals annually to those
impacted by homelessness, and we support these
efforts alongside local food projects aimed at
helping vulnerable people in our communities.
We have also partnered with Social Bite to expand
their Jobs First initiative, which supports individuals
into long-term employment. To date, this
programme has helped over 30 people begin new
careers within Mitchells & Butlers – and we are
ambitious to expand this important partnership
in the years ahead as well as developing various
longer-term housing projects.
Our values
Our values – Passion, Respect, Innovation, Drive
and Engagement– shape our culture and define
how we operate as a business. They underpin
how we work together, how we serve our guests,
and how we build trusted relationships with
stakeholders across our communities and markets.
Board governance
There have been no changes to Board composition
during the year.
However, earlier in the year, and after a
distinguished tenure as Chief Financial Officer,
Tim Jones indicated to the Board that he was
contemplating retirement. Following an extensive
search and selection process for a successor this
will now be effective in Summer 2026. On behalf
of the Board, I would like to extend our sincere
thanks to Tim for his exceptional contribution to
Mitchells & Butlers over the past 15 years. His
financial leadership, professionalism and integrity
have been instrumental to the Board in strengthening
the business and guiding it through some of the
most challenging periods our industry has faced.
We wish him every success and happiness in his
well-earned retirement.
We welcome Emma Harris to the Board as our
next Chief Financial Officer. She joins us from
Marks & Spencer Group plc where she is
currently Finance Director – Food, bringing a
wealth of experience in financial leadership and a
strong track record in driving performance. I look
forward to working with her as we continue to
build on our strong foundations for future growth.
Further detail on the operation of the Board can
be found in the Governance section on page 65.
Looking ahead
Mitchells & Butlers has once again demonstrated
its ability to navigate uncertainty and deliver
consistent performance. While the macroeconomic
environment remains challenging, we enter the
new financial year with confidence – supported
by a clear strategic direction, an exceptional team,
and a compelling brand portfolio that continues to
resonate strongly with guests and generate value
for shareholders.
On behalf of the Board, I would like to thank all
of our colleagues for their passion, commitment,
and contribution over the past year.
Bob Ivell
Chair
Mitchells & Butlers plc
“I’m pleased to report
another year of strong
progress, as our
management team has
continued to execute
against our strategic
objectives with discipline
and focus.”
Bob Ivell
Chair
Mitchells & Butlers plc Annual Report and Accounts 2025
25
Governance Financial Statements Other Information
Business review
Total sales across the period were £2,711m
reflecting 3.9% growth on FY 2024. Like-for-like
sales
a
increased by 4.3% with strong
performances through the brand portfolio.
Adjusted operating profit
a
of £330m was 5.8%
growth on last year (FY 2024 £312m) and a 0.2ppt
increase in adjusted operating margin to 12.2%
(FY 2024 12.0%).
We made a good start to the year with like-for-like
sales
a
growth of 4.0% over the first seven weeks.
Performance over the important three-week
festive period was particularly strong with
like-for-like sales
a
growth of 10.4%. Across the
first quarter as a whole, like-for-like sales
a
remained well ahead of the market
a
, growing by
3.9% despite the notable adverse, albeit temporary,
impact of very cold and stormy weather over the
last couple of weeks.
Sales remained resilient through the second
quarter aided by good weather in late March,
and with a particularly strong performance on
Mother’s Day. Across the quarter, we recorded
like-for-like sales
a
growth of 4.7%.
Third quarter growth remained strong and
benefitted from the movement of Easter into
the second half, with like-for-like sales
a
growth
of 5.0%.
Fourth quarter like-for-like sales
a
growth of 3.2%
reflected robust performances in mid-market pub
and pub restaurants balanced against slightly
weaker sales in London within the M25 and in
more premium businesses.
We have continued to consistently outperform
the market
b
, as represented by the CGA Business
Tracker, by c. 3% over the financial year. Across
the market segments reported on by CGA
Business Tracker, Pubs and Pub Restaurants have
seen the highest sales growth across the year,
benefiting from periods of warmer weather.
Chief Executive’s
business review
Annual Report and Accounts 2025 Mitchells & Butlers plc26
Introduction
Strategic Report
“Our strategy, based on
three key pillars, has
provided the foundation for
our ongoing performance.
We focus on maximising
the value generated from
our 83% freehold and long
leasehold estate, utilising
the diversity of our brand
portfolio to grow market
share with appeal across
a broad range of consumer
occasions, demographics
and locations.”
Phil Urban
Chief Executive
The Restaurant segment has delivered broadly flat
sales, which we have consistently outperformed.
Bars have reported sales decline, with the
late-night market being particularly challenged.
This is the segment that we have least exposure
to, but again we have outperformed significantly,
with our offers appealing across a range of
occasions with less exposure to late-night trade.
Cost inflation headwinds over the financial year
were in line with guidance at £100m, driven
primarily by increased labour costs (including
increased national insurance contributions which
impacted the second half) and against a backdrop
of stabilisation of overall energy costs. Strong and
resilient sales growth, combined with effective
delivery of our Ignite and capital programmes,
have driven an increase in both profitability
and margins.
The macro pressures impacting the sector have
resulted in a decline in the number of licensed
outlets of 0.5% in the year to June 2025, after a
period of relative stability during 2024. Leased
businesses were most affected, with net closures
of 3.3%. Independents reported a net reduction
of 0.1% with net closures in food-led outlets
offsetting growth in drink-led outlets. Managed
operators marginally increased outlet numbers
by 0.7% despite a reduction in food-led outlets.
The reduction of outlet numbers suggests that
operators in certain segments of the market are
no longer able to withstand the cost pressures
impacting the sector.
Our strategic priorities
Our strategy, based on three key pillars, has
provided the foundation for our ongoing
performance. We focus on maximising the value
generated from our 83% freehold and long
leasehold estate, utilising the diversity of our
brand portfolio to grow market share with appeal
across a broad range of consumer occasions,
demographics and locations. Our range of offers
is a particular strength during times of uncertainty,
with familiar brands to suit a wide range of
occasions, providing guests with the opportunity
to adapt their drinking and eating out choices to
meet their needs.
Our Ignite improvement programme of work
remains a key focus for the business. The
programme enables our organisation to be agile
in response to the evolving external environment,
facilitating change whilst maximising the power
of our scale. We have around 40 initiatives
underway across a range of areas, all focused
on driving sales and delivering cost efficiencies.
Sales focused initiatives deliver enhanced guest
experiences in a variety of ways and continue to
reap rewards, reflected in sustained like-for-like
sales
a
growth as well as continued market
outperformance on guest review scores, which
averaged 4.6 out of 5.0 over the financial year.
During the year we have expanded our guest
feedback surveys to include reviews of dishes,
enabling us to use additional data driven insights
to evolve our menus to better satisfy guest needs.
Enhancing productivity and efficiency to help
mitigate inflationary costs remains an important
focus. We have a number of initiatives in place
designed to improve efficiency, including
optimisation of our labour scheduling system
which assists General Managers in achieving an
effective balance of team to maximise sales across
day parts, as well as our auto-ordering system
which helps to reduce instances of stock outs and
to minimise waste.
A number of initiatives deliver commercial savings
whilst also contributing to our sustainability
objectives. We have continued the roll out of
remote control in-site energy systems which have
delivered energy consumption savings across our
estate. Remote control of heating, for example,
provides a significant opportunity to reduce
consumption whilst also relieving our managers
of one of their many daily tasks, allowing them to
focus on guests. In addition, during the year we
realised an opportunity in packaging, following
a market transition to exchange glass bottles for
cans in certain soft drinks, delivering cost savings
and environmental benefits through lower
emission packaging.
Mitchells & Butlers plc Annual Report and Accounts 2025
27
Governance Financial Statements Other Information
Our capital programme continues to deliver
significant value through improving the
competitive position of our pubs and restaurants
within their local markets. We are committed to
prioritising investment in our estate and this year
we expanded the programme, investing £181m
and completing 216 investment projects
comprising 199 remodels, 13 conversions and
4 acquisitions. We are generating very strong
returns, currently in excess of c. 35% on remodels,
justifying an increasing allocation of capital to this
area as we look to re-establish an average 7-year
investment cycle.
People
Our people bring our brands to life and are critical
in the success of the business. We are delighted
that engagement scores have continued to
improve over the period and believe this is
representative of the commitment of our teams
to deliver the change needed to navigate the
challenging operating environment and ultimately
to drive the future success of the business.
Pleasingly, employee turnover has also continued
to improve reaching record levels of 55% (FY 2024
64%) supported by improved internal succession
rates, reflecting the strength of our training and
progression opportunities. For a number of years,
we have been able to evidence the strong
correlation between employee engagement
scores, guest satisfaction and sales performance
and this has proven to be the case once again over
the course of FY 2025.
Our sustained progress across key people metrics,
despite a persistently challenging recruitment
environment, underscores the effectiveness of
our talent strategy – successfully attracting
high-calibre individuals, enhancing capability
through structured development programmes,
and supporting long-term retention via clear and
compelling career progression pathways.
Sustainability
We are committed to reducing the environmental
impact of our business and are pleased with the
progress we have made against our challenging
targets. We have committed to:
• Net Zero emissions by 2040, including
Scope 1, 2 & 3
Progress: We have reduced our total footprint
by 16% from our 2019 baseline year, comprising
a reduction in Scope 1 and 2 emissions of 22%
driven by energy consumption reduction and
reduced reliance on gas as an energy source,
and Scope 3 reduction of 15% reflecting
progress made in partnership with our suppliers
to reduce the impact of our supply chain.
• Zero operational waste to landfill by 2030
Progress: We now divert 99% of waste from
landfill and are confident of achieving our
target ahead of 2030. In addition, we have
increased recycling rates to 60% with
enhanced segregation and a focus on
engagement and behaviour change in sites.
• 50% reduction in food waste by 2030
Progress: To date we have successfully
reduced our food waste by 23% from our 2019
baseline, with progress both in sites and in the
supply chain. We are focused on operational
practices to reduce waste and have effective
partnerships in place with Fareshare and Too
Good To Go to redistribute unavoidable
surplus food.
We remain focused on working towards our
sustainability goals, with numerous initiatives
underway to support these ambitions and we
were delighted to again receive the award for the
Most Sustainable Pub Company at this year’s
Publican Awards. We have continued to invest in
sustainability capital, we now have 244 sites with
solar panels, and significant further opportunity
to grow our production of renewable energy.
We have made good progress in the electrification
of sites to reduce our reliance on gas as an energy
source, having removed gas fully from 24 sites
(FY 2024 5 sites) and electrified 100 kitchens
(FY 2024 60). In addition, we are investing in
technology which allows us to remotely control
high energy consumption equipment across the
estate, opening up the opportunity for energy
consumption savings without requiring
intervention from our teams.
Our teams are vital to the delivery of progress.
We provide support for these types of initiatives
through our dedicated network of sustainability
ambassadors, as well as centrally developed
online training. We know that our people are
passionate about improving the environmental
impact of our business and are pleased to deliver
continued progress in this area, further enhancing
our employer proposition.
Current trading and outlook
We traded strongly throughout the year with
like-for-like sales
a
growth of 4.3% built on strong
performances across the brand portfolio. We
remained ahead of the market
b
in each segment
reported by the CGA Business Tracker, supported
by broadly flat volumes across the period.
Combined with disciplined cost control, further
Ignite efficiencies and strong returns from our
capital programme, this delivered growth of 5.8%
in adjusted operating profit
a
to £330m (FY 2024
£312m) despite well publicised cost pressures.
Over the most recent 8 weeks like-for-like sales
a
have strengthened from the final quarter of
FY 2024, growing by 3.8% despite uncertainty
ahead of the Chancellor’s Autumn Budget.
Looking forward, Lumina Intelligence forecasts
the UK eating out market to grow by 2.4% in 2026
(UK Eating Out Market Report, 2025), against
which we expect to maintain our outperformance.
During FY 2026 we anticipate cost headwinds of
c. £130m, representing slightly less than 6% of our
cost base before mitigation, driven by annualisation
of labour cost increases, plus further increases in
the statutory thresholds, and increased levels of
food cost inflation. This includes our preliminary
assessment of the impact of the Chancellor’s
recent Autumn Budget, pending clarification of
further detail. We believe that our strong market
position, together with the success of our Ignite
improvement programme, should enable us to
continue to outperform the sector and leave us
well positioned to mitigate these increases.
We remain focused on strengthening our balance
sheet, which will enhance the resilience of the
Group and deliver further value to shareholders,
principally through a transfer to equity. The Board
do not feel that it will be efficient, particularly with
regard to break costs and new debt issue costs,
to consider a reset of the capital allocation strategy
of the Group within the near term. Over time,
and as the securitisation matures, the Board will
however continue to monitor the position and
shareholder returns will be considered alongside
investment opportunities.
Phil Urban
Chief Executive
Mitchells & Butlers plc
a. The Directors use a number of alternative
performance measures (APMs) that are considered
critical to aid the understanding of the Group’s
performance. Key measures are explained on pages
189 to 191 of this report.
b. As measured by the CGA Business Tracker.
Chief Executive’s business review continued
Annual Report and Accounts 2025 Mitchells & Butlers plc28
Introduction
Strategic Report
Mitchells & Butlers plc Annual Report and Accounts 2025
29
Governance Financial Statements Other Information
Our markets
The UK eating out sector is
leveraging brand strength,
operational efficiency,
and innovation to drive
performance in a complex
economic environment.
The UK hospitality sector has shown resilience
and gradual recovery in the years since the
pandemic, despite continued inflationary
pressure. Lumina reported sales growth in the
hotels, pubs and restaurants market of 2.2% in
2025, demonstrating the robust trading of the
sector as a whole.
The hospitality sector continues to navigate
a challenging macro environment, with the
persistent inflationary environment putting
pressure on both businesses and consumers
during the year. The resulting increase in prices
across the industry has made eating out a more
considered choice for many households and has
emphasised the need for operators to deliver
quality experiences which are difficult to replicate
at home. Value remains paramount, not solely in
terms of price, but in the overall quality and
memorability of the experience. Digital
engagement plays an increasingly critical role in
decision-making, with consumers relying on
online reviews, menus, and social media to assess
value and experience before visiting.
The CGA Business Tracker reports on the
differentiating growth patterns across the sector’s
key segments. During the period Pubs and Pub
Restaurants reported the highest like-for-like
sales growth, benefiting from the period of warm
weather. The Restaurant segment of the market
delivered broadly flat sales and bars across
the market reported sales decline over the
financial year, with the late-night market being
particularly challenged.
Despite these pressures facing the sector, Lumina
forecasts sales growth in the eating out market of
2.4% in 2026, with managed and branded pubs
and restaurants expected to exceed that growth
rate and with brand identity and loyalty identified
as key growth drivers.
According to CGA’s hospitality market monitor,
macro pressures have resulted in a decline in the
number of licensed outlets of 0.5% during the first
half of 2025, after a period of relative stability
during 2024. In the year to June 2025 leased
businesses were most affected, with net closures
of 3.3%. Independent net closures of 0.1% was
driven by food-led business with drink-led outlets
in growth. Managed operators marginally increased
outlet numbers by 0.7% despite a reduction in
food-led outlets.
In conclusion, the UK eating out market in 2025
reflects a sector that is adapting to both economic
constraints and evolving consumer preferences
with resilience.
Our response to this competitive environment can
be seen on pages 40 and 41 in our strategic priorities.
Annual Report and Accounts 2025 Mitchells & Butlers plc30
Introduction
Strategic Report
15
5
10
0%
-5
-10
-15
Oct
24
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24
Dec
24
Jan
25
Feb
25
Mar
25
Apr
25
May
25
Jun
25
Jul
25
Aug
25
Sep
25
15
5
10
0%
-5
-10
-15
Oct
24
Nov
24
Dec
24
Jan
25
Feb
25
Mar
25
Apr
25
May
25
Jun
25
Jul
25
Aug
25
Sep
25
15
5
10
0%
-5
-10
-15
Oct
24
Nov
24
Dec
24
Jan
25
Feb
25
Mar
25
Apr
25
May
25
Jun
25
Jul
25
Aug
25
Sep
25
15
5
10
0%
-5
-10
-15
Oct
24
Nov
24
Dec
24
Jan
25
Feb
25
Mar
25
Apr
25
May
25
Jun
25
Jul
25
Aug
25
Sep
25
Pub restaurants
Restaurants
Bars
Pubs
Like-for-like sales by segment
Source: CGA business tracker
Source: CGA business tracker
Source: CGA business tracker
Source: CGA business tracker
Mitchells & Butlers plc Annual Report and Accounts 2025
31
Governance Financial Statements Other Information
Financial
• Long-term transfer of value to equity as debt
is paid down
• Strategy designed to generate sustainable
growth and to provide flexibility in uncertain
trading environments
Financial review
Go to pages 62 to 64
Structural
• Our diversified portfolio of leading brands and
offers caters for various demographics and
disposable income levels making us less
susceptible to short-term changes to industry
trading conditions
• We are a predominantly freehold business
with well-invested properties
• As one of the largest operators we benefit
from economies of scale driven by our
central functions
• We understand our guests and have the
systems in place to receive and react to their
changing needs to evolve our offers
At a glance
Go to pages 2 to 5
In this section, we outline the distinctive characteristics
of Mitchells & Butlers that enable us to create value
for our stakeholders – be they financial, structural,
environmental or cultural.
Our business model
The Mitchells & Butlers difference
Annual Report and Accounts 2025 Mitchells & Butlers plc32
Introduction
Strategic Report
Environmental
• Our sustainability strategy is designed to
create a positive effect on people and
communities and to reduce the negative effect
of our operations on the environment
Our sustainability targets
Go to pages 44 and 45
The Mitchells & Butlers difference
Cultural
• We have a defined purpose supported by our
PRIDE (Passion, Respect, Innovation, Drive,
Engagement) values
• Our people strategy encompasses a
structured approach to recruitment, retention,
development and engagement
• We have a team of dedicated, knowledgeable
and capable people who are critical to delivering
outstanding experiences to our guests
Mitchells & Butlers plc Annual Report and Accounts 2025
33
Governance Financial Statements Other Information
1
4
5
Our experience and
ability to interpret
guest feedback help
us understand what
our guests want.
Creating memorable
moments generates
value for stakeholders.
Suppliers Guests Employees
Amenity
Safety
Choice
Hygiene
Environment
Value
Occasion
Everything we learn about our
guests’ requirements is fed back.
Our business model is driven by our understanding of our guests
and our ability to evolve our brands and offers to reflect changes
in their needs.
Our business model
How we create value
Critical to the delivery of our offers is the quality
of our people, supply chain, estate and central
functions, which provide the infrastructure
through which our brands deliver memorable
moments to our guests.
Our success in creating these moments
consistently, safely and profitably creates
long-term value for our stakeholders.
Annual Report and Accounts 2025 Mitchells & Butlers plc34
Introduction
Strategic Report
2
3
Everything we do is…
Run by our people…
+50,000*
Employees
* As at 27 September 2025.
Local community Environment Investors
Supplied by our supply chain…
+1,600
Suppliers
Realised within our estate…
1,718
Pubs, bars and restaurants
Supported and
managed by our central
functions…
• Finance and Technology
• Human Resources
• Legal and Risk
• Marketing
• Procurement
• Property
Understanding
what our guests
want influences
every element
of our brands
and offers.
The combination of our brands, people, supply chain, estate
and central functions creates memorable moments for our guests.
Mitchells & Butlers plc Annual Report and Accounts 2025
35
Governance Financial Statements Other Information
Our annual supplier conference
allows us to communicate our business
and sustainability priorities direct to
our suppliers
Our centralised procurement team
has developed strong relationships
which have enabled us to minimise the
impact of any supply chain disruptions
Donated unavoidable surplus food
in the supply chain in partnership
with FareShare
4.6
Online review score of over 4.6 out of 5
across the business
Over 99% of outlets with safety scores
of 4 or 5 out of 5
Our suppliers provide the products which bring
our brand visions to life. Our guests’ tastes are
continuously evolving and our ability to meet
changing preferences at scale sets us apart from
our competitors.
We build long-term and collaborative partnerships
with our suppliers. We work closely with suppliers
to ensure the needs of both businesses are met,
and to ensure relationships are maintained.
By working together, we can develop new and
innovative products with suppliers which help our
brands adapt and evolve, building both of our
businesses. Through these partnerships, we work
to maintain transparency about our payment terms.
We work with suppliers to understand the
environmental impact of our supply chain and to
minimise the negative impact of production and
transportation. We are working to ensure that all
our suppliers can support our sustainability
ambitions, including prioritising high animal welfare
standards. Further detail on our sustainability
strategy can be seen on pages 44 and 45.
GuestsSuppliers
Value creation story
FY 2025 highlights
Annual Report and Accounts 2025 Mitchells & Butlers plc36
Introduction
Strategic Report
The satisfaction and enjoyment of our guests is
critical to the success of our business. We always
aim to exceed guests’ expectations and continually
evolve our offers with that objective in mind.
We collate guest feedback through online
channels and via our brand surveys which is
reviewed centrally and used to provide valuable
insight to both our operations and brand
marketing teams.
We have always strived to achieve high safety
and hygiene standards and have used this strong
base to evolve our ways of working for the
challenges we face. We focus on ensuring
high-quality, consistent practices across the business.
We constantly review the new procedures to
ensure that both high safety levels and guest
satisfaction can be achieved.
As ever, high-quality food and drink, served by
an engaged team, in an appealing environment
remain key elements to providing our guests with
memorable experiences, alongside the highest
safety standards. We regularly assess changing
guest preferences across these areas to position
our brands for success.
Guests Employees
We are proud of the learning and development
opportunities we offer and strive to provide
progression opportunities to all our people.
Over the past year we have increased the number
of people promoted internally, particularly at
the frontline.
Regular development catch ups are held
throughout the year to support employees’
progression and personal development.
We have two formal feedback surveys a year
providing the opportunity to gain insight into
employee satisfaction and to highlight opportunities
to improve our offer as an employer.
Employee forums are hosted by the Executive
Committee team members and enable all employees
to raise issues via elected representatives, giving
them the opportunity to directly discuss any issues.
The welfare of our employees is of paramount
importance to us and we continually review
the support we offer to employees across
the business.
Dave Coplin, an independent Non-Executive
Director, is the nominated Board member
responsible for representing the employee voice
at Board level.
We are committed to providing equal opportunities
for all our employees. Our employee Diversity and
Equality Policy ensures that every employee, without
exception, is treated equally and fairly and that all
our employees are aware of their responsibilities.
Growing and developing our internal
talent is a priority to address talent
shortages
Innovative recruitment and attraction
solutions ensuring the right people
join our business
Employee wellbeing has never been
more important
The following table sets out our diversity balance
between men and women at the end of FY 2025.
The numbers in brackets show the comparative
numbers for FY 2024.
Men
FY 2025
Men
FY 2024
Women
FY 2025
Women
FY 2024
Board
Directors 7 (7) 2 (2)
Other senior
managers 31 (30) 13 (13)
All
employees 24,249 (24,346) 25,942 (26,462)
Our people are central to our business, bringing
brand visions to life through engaging interaction
with our guests and preparation of high-quality
food and drink.
Through our open and inclusive culture, we aim
to create an environment which allows our people
to develop and grow. Recruiting effectively is
important as it ensures that we attract the right
people that will thrive in our organisation.
Increasingly, technology can be helpful in
supporting our recruitment activity, and enables
us to market our job opportunities effectively in
a very competitive environment.
Mitchells & Butlers plc Annual Report and Accounts 2025
37
Governance Financial Statements Other Information
Value creation story continued
Developed a nutritional roadmap
focused on enhanced information
and balanced choices
£187m
Tax paid in FY 2025 (not including
tax collected, e.g. VAT)
Worked with Social Bite to help
provide employment to vulnerable
people on their Jobs First programme
Over 18 tonnes of unavoidable
surplus food donated to charities
via FareShare in FY 2025
Investment in FY 2025 in
energy-reducing technology
99%
of operational waste diverted from
landfill in FY 2025
Target to reduce our absolute Scope 1
& 2 GHG emissions by 70% by 2030 vs
2019 and our absolute Scope 3
emissions by 28% over the same
timeframe
23%
Food waste reduction in
FY 2025 vs 2019 baseline
Committed to achieving Net Zero
emissions by 2040
We have a long history of providing a central hub
to many communities where people have met and
socialised for decades.
Many of our brands are long-standing supporters
of causes which resonate with the brand and its
guests. For example, All Bar One supports Shelter
with selected dishes including a donation, and
Toby Carvery supports the Armed Forces.
We are actively looking to enhance the positive
impact we can have on local communities,
including supporting charities, providing career
opportunities, encouraging responsible drinking,
and supporting health by enhancing and
providing information on the nutritional content
of our meals.
EnvironmentLocal community
Annual Report and Accounts 2025 Mitchells & Butlers plc38
Introduction
Strategic Report
The natural environment provides the business
with the resources it needs to operate. We take
our responsibility to protect that environment
seriously and have set stretching targets to reduce
the negative impact of our business.
We have aligned our objectives with the UN
Sustainable Development Goals in order to focus
our efforts on the global priorities. Our aim is to
embed a sustainable way of doing business within
our current operations such that it becomes
business as usual and we are doing that through
a Board-level committee, steering committee and
focused workstreams with representatives from
across the business.
The food industry has an important part to play
in climate change, as food supply chains are a
significant factor in rising greenhouse gas emissions
and in the reduction of biodiversity. We have
measured our baseline emissions and have used
this to create a roadmap for reduction which is
one of our priority areas. We are also conscious of
the food industry’s significant impact on biodiversity
which is another area we are balancing within our
future plans to reduce the negative impact our
organisation has on the environment and to
enhance the positive outcomes wherever possible.
Further detail of our sustainability strategy can be
found on pages 44 and 45.
Environment Investors
Board-level committees ensure that appropriate
time and focus are allocated to the key areas of
governance of the business and, where necessary,
expert third parties are consulted. The Board
provides a healthy level of challenge and debate
on key areas and has been successful in moving
the business forward.
The Executive Committee consists of members
of management from across the business who
have a wealth of experience both within the
hospitality industry and from other sectors.
Their biographies can be found on our website
at www.mbplc.com/investors/our-management.
We recognise that it is important that our investors
have transparency over the operation of our
business and the full details of our governance
procedures are set out on pages 81 to 93.
Robust financial management through
challenging macroeconomic conditions
Equity raise in FY 2021 gave strength
to balance sheet
Reporting on environmental, social
and governance issues enhanced
Our investors are made up of our shareholders
and bondholders who play an important role in
monitoring and safeguarding the governance of
the Company.
We aim to demonstrate the responsible stewardship
of the Company from a financial, strategic,
governance, environmental and ethical perspective.
We have a highly effective Board, with Directors
with various specialisms and backgrounds to best
govern the Company. Their biographies can be
found on pages 70 and 71.
We maintain an open dialogue through our investor
relations programme. We update investors and
bondholders on financial and strategic performance
through regular performance updates and facilitate
discussion through meetings, roadshows and our
Annual General Meeting.
Mitchells & Butlers plc Annual Report and Accounts 2025
39
Governance Financial Statements Other Information
Our strategic priorities
Maintaining our consistent three strategic priorities
Consistent progress against
our strategic priorities has
been delivered through our
Ignite programme and our
commitment to continued
capital investment.
Our strategic priorities form the foundation of
everything we do, guiding our efforts to deliver
long-term, sustainable growth. They are central
to fulfilling our purpose, to be the host of life’s
memorable moments – bringing people and
communities together through great experiences.
By building a strong, efficient business, we create
the space to focus on what matters most,
experiences that our teams love delivering and
our guests love being part of. We are committed
to embedding sustainability throughout our
operations, including within our supply chain,
ensuring that our processes not only support
growth but also foster connection. Our three
strategic pillars are:
• Build a more balanced business
• Instil a more commercial culture
• Drive an innovation agenda
Focusing on these areas through our Ignite
programme of work, a wide range of management
improvement initiatives delivered significant
progress, generating sustained like-for-like sales
a
growth and cost efficiencies. At any one time we
have 40–50 workstreams live with cross-
functional groups developing initiatives which
enhance efficiency and productivity. We have
had success in areas such as automatic product
ordering, enhanced labour scheduling, reduced
consumption of resources and cost-mitigating
procurement strategies. Alongside efficiency
improvements, we have a number of projects
designed to drive sales and enhance guest
experiences. We remain confident in our ability
to deliver long-term and sustained efficiencies
and business improvements through the existing
Ignite programme.
We believe that our three strategic pillars remain
the crucial elements of the business which will
drive long-term growth. Through the Ignite
workstream and our capital programme, we will
continue to unlock value in these areas, enhancing
our competitive position in the market.
The table on page 41 outlines these strategic
priorities, our progress against them in FY 2025,
our priorities for FY 2026 and their link to our
sustainability strategy, risks and KPIs.
“The systematic progress
we have made across our
three strategic pillars has
delivered sustained market
outperformance and
efficiency gains providing
a stable platform for
future growth.”
a. The Directors use a number of alternative
performance measures (‘APMs’) that are considered
critical to aid the understanding of the Group’s
performance. Key measures are explained on pages
189 to 191 of this report.
Annual Report and Accounts 2025 Mitchells & Butlers plc40
Introduction
Strategic Report
1.
Build a more
balanced business
2.
Instil a more
commercial culture
3.
Drive an
innovation agenda
• To effectively utilise our estate of largely freehold-
backed properties
• To ensure we are exposed to the right market segments
by having the optimal trading brand or concept in each
outlet, based on location, site characteristics and local
demographics
• To maintain the amenity level of the estate such that we
operate safely, reduce our impact on the environment
and remain competitive to guests, alongside meeting
cash flow commitments
• To empower teams across the business to make changes
to facilitate sustainable growth
• To engage our teams in delivering outstanding guest
experiences
• To act quickly and decisively to remain competitive in
our fast-changing marketplace
• To provide training and development opportunities
which allow our people to thrive within the business
• To enhance processes to address Modern Day Slavery
threats in the supply chain
• To ensure that our brands and formats remain fresh and
relevant within their market segments
• To leverage the increasing role technology can play in
improving efficiency and guest experience
• To execute a digital strategy to engage with consumers
across a variety of platforms
• To facilitate new product and concept development
• To utilise our scale and position to lead on environmental
issues which impact our sector, finding innovative
solutions to pressing issues
FY 2025 progress
• Expansion of our capital investment programme with
expenditure of £181m (FY 2024 (£154m))
• Completed 212 conversions and remodels, and acquired
4 new freehold sites as well as the purchase of two
freehold interests in existing sites
• Expanded our competitive socialising darts concept
Arrowsmiths, across a further 4 sites providing a strong
return from secondary space
• Integration of Pesto Restaurants Ltd, delivering Italian
Tapas offer across its ten-strong estate. Pesto
complements the Mediterranean theme of Ego and
together these brands provide further diversification of
the estate with a low meat offer which appeals to the
health-conscious guest
• Continued to grow Ego and Pesto brands through
conversions with strong sales uplifts following conversion
• Committed to seven-year investment cycle, the capital
programme continues to be a key focus for the business
FY 2025 progress
• Further progress made by our ‘Guest Obsessed’
programme to enhance the skills of our teams and
provide exceptional guest experiences with a focus on
driving sales, delivering record guest review scores
• Implementation of automatic ordering system has
improved menu availability which has a significant
impact on guest experience
• Continued to train and develop our people, celebrating
695 apprenticeships completed in the year, and internal
succession to General Manager roles of 57%
• Focus on employee engagement resulting in record
engagement scores
• Donated £1.7m to Social Bite through employee
fundraising and a £500,000 donation from the Group
FY 2025 progress
• Development of ‘My Account’ across multiple brands,
providing guests a single platform to manage their
bookings, orders, and offers
• Used data from guest reviews to more accurately
understand satisfaction in relation to dishes used to
inform future menu development
• Identified opportunities to reduce glass packaging
of soft drinks realising both commercial and
environmental benefits
• Christmas pre-order system provided guests with a
more streamlined and efficient experience, while also
reducing operational complexities during a busy time
of year
• Utilised newly adopted new social media platforms and
introducing personalised website content, improving how
we target and engage with different customer segments
FY 2026 priorities
• There is a full capital programme planned for FY 2026
• Focus on enhancing asset value through remodelling
sites where we believe increased value can be unlocked
• Make selective acquisitions where we feel they add
value to the estate, and disposals where we feel we have
extracted maximum value
• Realise further conversion opportunities within the
estate to the Ego and Pesto formats
• Invest in technologies, continued investment in solar
panels and expansion of internet-connected control
devices, to improve the energy efficiency of our estate
• Maximise the utility of the secondary spaces across the
estate via a dedicated Ignite initiative
FY 2026 priorities
• Adapt to the changing environment within which we
operate to maximise the profitability of each business
• Deliver a wide range of cost control initiatives across the
estate under the Ignite programme
• Continue to unlock the benefits of automated team
member scheduling in every business
• Further investment in internet-connected control
devices for heating systems and kitchen equipment to
reduce energy consumption
• Increasingly leverage scale through central procurement
and benchmark our businesses
FY 2026 priorities
• Continue to build on the success of ‘My Account’
with more advanced loyalty schemes to further
incentivise repeat customer engagement and
strengthen brand loyalty
• Identify further opportunities to realise commercial
benefits through supplier collaboration on packaging
• Extend digital gamification across more brands,
enhancing customer interaction and engagement
• Further enhancements to our ordering and booking
platforms, focusing on improving speed, reliability, and
the overall customer experience to meet the evolving
expectations of our digital audience
Sustainability
• Enhancing the sustainability credentials of our buildings
is a key priority
• During the year we have installed solar panels on 93 sites
producing on-site renewable electricity and have plans
to continue this programme into FY 2026
• Removing gas as an energy source from our sites is a key
objective of our Net Zero roadmap. We now have 100
sites with all-electric kitchens and 24 sites where we
have fully removed gas in favour of renewable electricity
• We have a team of sustainability ambassadors across the
business who have helped to drive behavioural change
resulting in reduced energy consumption; coupled with
investment in energy reducing technology we have
reduced consumption by 2% during the year
• We divert 99% of our operational waste from landfill and
are focused on reducing overall volumes of waste whilst
increasing recycling rates
Sustainability
• We communicate our sustainability ambitions on all
brand websites and have built our communication on
these topics through social media in appropriate brands
• We have made good progress in reducing food waste,
down by 23% in FY 2025 from FY 2019 baseline,
facilitated through enhanced practices and partnerships
with FareShare and Too Good To Go to redistribute
unavoidable waste
• Identifying opportunities to reduce water consumption
across the business
• Continue our work with Stop The Traffik to drive best
practice in addressing Modern Day Slavery threats in
the supply chain
• Expand our existing strong partnership with Social Bite,
providing employment to support people impacted
by homelessness
Sustainability
• Around 14,500 people have completed our training
on sustainability designed to enhance understanding
of sustainability challenges
• We have active and ongoing discussions with our
suppliers on innovative ways to reduce the
environmental impact of our supply chain
• We are active members of the Zero Carbon Forum,
a cross-industry group which is focused on finding
solutions to help hospitality transition to a low
carbon economy
• We have representation on the UK Hospitality
Sustainability committee and Hospitality Sector Council
Sustainability Group, making us part of the conversation
with Government for future legislative changes to
support enhanced sustainability in the sector
Links to Key Risks
1, 2, 3, 4, 5, 6, 7, 9
See pages 52 to 59
Links to Key Risks
1, 2, 3, 4, 5, 7, 8
See pages 52 to 59
Links to Key Risks
1, 2, 3, 4, 6, 7
See pages 52 to 59
Links to KPIs
2, 3, 4, 5
See pages 42 and 43
Links to KPIs
1, 2, 3, 4, 5
See pages 42 and 43
Links to KPIs
2, 3, 5
See pages 42 and 43
Mitchells & Butlers plc Annual Report and Accounts 2025
41
Governance Financial Statements Other Information
Key performance indicators
Measuring performance
We measure our performance against our strategy through
five key performance indicators.
1.
Staff turnover
2.
Guest review score
3.
Year-on-year same outlet
like-for-like sales
a
55%
58%
94%
81%
64%
2021 2022 2023 2024 2025
Definition
The number of leavers in our retail businesses,
expressed as a percentage of the average number
of retail employees. This like-for-like measure
excludes site management. The turnover
measurement gives an indication of the retention
of retail staff and can help to identify if there is an
arising retention issue in any area of the business
which could highlight an engagement issue. In
addition, as team members go through a thorough
induction and training process there is an element
of cost for each person who leaves the business.
Therefore, it is important for the Board to monitor
this measure.
FY 2025 performance
Retail staff turnover reduced by 9 ppts to a record
low of 55% due to the effective delivery of our
people promise, to meet the needs of our
employees, driving improved retention. Turnover
was reduced across all employee groups, with
particular progress in front and back of house
team members. During 2021, turnover was
suppressed by the impact of Covid-19 as there
were minimal leavers during closure periods.
Link to strategic priority: 2
See page 41
Definition
Our reported guest measure is an average
feedback score across the major third-party
feedback channels such as Google, Facebook,
TripAdvisor and other review sites. Improving this
score remains a key focus of the business as we
aim to create memorable moments for our guests.
FY 2025 performance
Our average feedback score across all major
feedback channels was 4.6 out of 5 for FY 2025,
and improvement on prior year of 0.1. We are
delighted with the continued progress made in
recent years on guest feedback, which reflects
the satisfaction of our guests. Progress has been
improved over the year, driven by a collection of
Ignite projects focusing on improving this metric
and our managers’ continued commitment to
delivering excellent guest experiences.
Definition
Sales in FY 2021 and 2022 were impacted by
Covid-19 related closures, therefore during these
years sales were compared to the sales in FY 2019,
being the last full year pre-Covid-19. Since
FY 2023 the measurement has reverted to using
the prior year as a comparative of all UK managed
sites that were trading in the two periods being
compared, expressed as a percentage. Like-for-
like sales is an important indicator of how the
business is performing in the context of its
previous performance, the long-term trend of
which can reflect improvements in guest appeal.
FY 2025 performance
Like-for-like sales increased by 4.3% in FY 2025
built on strong brand performances across the
portfolio. We remained ahead of the market in
totality and in each segment reported by the CGA
business tracker, supported by broadly flat
volumes across the period.
Staff turnover
55%
4.6
4.3
4.3
4.4
4.5
2021 2022 2023 2024 2025
Links to strategic priorities: 1, 2 & 3
See page 41
Guest review score
4.6
4.3%
-9.6%
1.1%
9.1%
5.3%
2021 2022 2023 2024 2025
Links to strategic priorities: 1, 2 & 3
See page 41
Year-on-year same outlet
like-for-like sales
a
4.3%
Annual Report and Accounts 2025 Mitchells & Butlers plc42
Introduction
Strategic Report
4.
Incremental return on
expansionary capital
a
5.
Adjusted operating profit
a
Definition
Expansionary capital includes investments made
in new sites and investment in existing assets that
materially changes the guest offer. Incremental
return is the growth in annual site EBITDA,
expressed as a percentage of expansionary capital.
Is it important for the Board to monitor return on
investment as it indicates the success of the capital
programme which underpins one of our three key
strategic pillars, to build a balanced business.
FY 2025 performance
The EBITDA return on all conversion and
acquisition capital invested over last 4 years was
17%. We remain confident in the quality of the
investment programme and committed to the
re-establishment of a seven-year investment
cycle. Our capital programme continues to be
a key focus of the business and one which we
believe will deliver significant future value.
Definition
Operating profit before separately disclosed
items as set out in the Group Income Statement.
Separately disclosed items are those which are
separately disclosed by virtue of their size or
incidence. Excluding these items provides both
management and investors with useful additional
information about the Group’s performance and
supports an effective comparison of the Group’s
trading performance from one period to the next.
The Board monitors adjusted operating profit
as one of the financial health indicators, as it
helps to reveal how efficiently the business is
being operated.
FY 2025 performance
Adjusted operating profit
a
, of £330m was £18m
higher than the prior period. Strong sales
performance and enhanced operating efficiency
during the year resulted in profit growth as well
as strengthened operating margin to 12.2%
(FY 2024 12.0%).
a. The Directors use a number of alternative
performance measures (APMs) that are considered
critical to aid the understanding of the Group’s
performance. Key measures are explained on pages
189 to 191 of this report.
b. 52-week basis
Links to strategic priorities: 1
See page 41
Links to strategic priorities: 1, 2 & 3
See page 41
£330m
£29m
£240m
£221m
b
£312m
2021 2022 2023 2024 2025
Adjusted
operating profit
a
£330m 4.6 out of 5
Average guest review score
17%
Incremental return on expansionary capital
Incremental return on
expansionary capital
a
17%
17%
-0.8%
18%
19% 19%
2021 2022 2023 2024 2025
Mitchells & Butlers plc Annual Report and Accounts 2025
43
Governance Financial Statements Other Information
Our sustainability targets
We have been working on enhancing the
sustainability of our operations since 2019 and
are pleased with the progress we have made.
We believe that embedding sustainability skills
into our existing teams is essential in order to
generate the changes needed to reduce the
environmental impact of the business. During
the year we have continued to build knowledge
and skills across the organisation enabling
sustainability considerations in each business
decision, and team members across the business
receive communication on key initiatives to drive
engagement and enhance understanding of our
objectives. The Sustainability Steering
Committee oversees the development and
progress of the Company strategy, supported
by working groups aligned to the three pillars of
the strategy. Our established Board-level
Responsibility Committee provides oversight and
governance to the management working group.
The Board provides challenge and insight on our
progress in an ever-changing macro environment
and is regularly updated on progress.
Our strategy has been developed to align with
the issues addressed by the UN Sustainable
Development Goals and Paris Climate
Agreement. We have committed to reducing the
negative impact of our business model on the
environment in light of these objectives and look
for opportunities to enhance our positive impact
on society. Our Net Zero ambition has been
developed to align with the Science Based
Targets initiative (SBTi) methodology to keep
global warming well below 2°C, and our roadmap
was validated by the SBTi in January 2024. We are
working on recalculating our 2019 baseline and
reduction pathway to align with the Forest, Land
and Agriculture (FLAG) guidance and latest
guidance in the Greenhouse Gas protocol.
We plan to submit our FLAG targets for SBTi
approval in early 2026.
Our strategy was informed through a stakeholder
materiality assessment, and we regularly review
our objectives, targets and timeframes in the
context of evolving external factors. We have
identified the UN Sustainable Development Goals
which we believe we can have the greatest impact
on and have aligned these to our strategic pillars
as shown below. For each of the pillars we have
defined our objective, key actions and targets.
Collaboration across our industry and value chain
is essential in order to facilitate progress; we are
members of industry groups such as the UK
Hospitality Sustainability Committee, representing
hospitality in the development of environmental
policy and Zero Carbon Forum, to share best
practice with the intention of moving the industry
forward as a whole.
We are committed to reducing the environmental impact of our business
operations and are pleased with our sustained progress against our key targets.
Sustainability strategic pillars
1. Respect for the planet 2. Pride in our offers 3. Care for communities
Objective
We are committed to reducing our emissions,
tackling waste and protecting biodiversity
Objective
We strive to deliver responsibly-sourced products
and menu options for everyone
Objective
People are central to our business, we are focused on
supporting our teams and the communities we serve
Key actions
• We have made progress against our Net Zero
roadmap, which was built in collaboration with
third-party experts, providing a detailed plan
for decarbonisation
• We received validation for our Net Zero
roadmap from Science Based Targets initiative
• We are a founding and active member of the
Zero Carbon Forum, bringing the industry
together to reduce emissions across the sector
through shared learning and insights
• We continue to purchase 100% renewable
electricity and continue our solar panel roll
out, with 244 sites now completed, allowing us
to generate on-site renewable energy
• We have successfully removed gas as an
energy source for cooking, heating and hot
water in 24 sites, providing essential learning
for the future scaling of this initiative
• We have successfully converted 100 kitchens
from gas to electricity
• We have increased the proportion of
operational waste diverted from landfill to 99%
(FY 2024 98%) and our recycling rate to 60%
(FY 2024 59%) with the latter end of the year
achieving 62%, through team engagement
and working with suppliers on more
sustainable packaging
Key actions
• We work with suppliers across all categories to
understand and improve the environmental
credentials of the products we buy
• We conduct annual supplier surveys to gain
better understanding of their sustainability
targets and progress to date
• We collect product-specific emission data to
inform decision-making
• We have enhanced our animal welfare
requirements from suppliers
• We engage with suppliers on sustainability
through our procurement managers and at our
annual supplier conferences
• We have maintained our focus on enhancing
the nutritional balance and information
available on menus
• We source all direct palm oil purchases from
Rainforest Alliance Approved sources
Key actions
• We have developed a partnership with Social
Bite, a charity tackling homelessness
• We have expanded our employment
programme with Social Bite, supporting 36
vulnerable people back into employment
• We have employed two dedicated support
workers who are assisting people to re-enter
the workforce
• We raised £1.2m on behalf of Social Bite
during FY 2025, through fundraising activity,
unlocking an additional donation of £0.5m
from Mitchells & Butlers plc resulting in a total
of £1.7m donated to Social Bite.
• We have an enhanced employee wellbeing
strategy and improved resources and tools
available to employees
• We maintain oversight of our Modern Day
Slavery policy with risk assessment completed,
in partnership with Stop the Traffik
UN Sustainable Goal alignment
UN Sustainable Goal alignment UN Sustainable Goal alignment
Annual Report and Accounts 2025 Mitchells & Butlers plc44
Introduction
Strategic Report
Our targets
1. Net Zero greenhouse gas
emissions by 2040
2. Zero operational waste
to landfill
3. Food waste
Target
Achieve Net Zero greenhouse gas emissions by
2040 (absolute reduction of emissions, including
Scope 1, 2 & 3) from our FY 2019 baseline. We
align our definition of Net Zero to the Science Based
Targets initiative corporate standard. Our Net Zero
target includes our Scope 1, 2 & 3 emissions, using
an operational control approach. We have set a
near-term target (validated by SBTi) to reduce our
absolute Scope 1 & 2 GHG emissions by 70% by
2030, compared to a 2019 base year (aligned to well
below 2°C) and a target to reduce our absolute
Scope 3 emissions by 28% over the same timeframe.
We also set a long-term target (validated by SBTi) to
reduce absolute GHG emissions from Scopes 1, 2 &
3 90% by 2040 from a 2019 base year to be Net Zero
by 2040. Aligned to the SBTi criteria we will offset
our residual 10% emissions using carbon removal
offsets at our Net Zero date. We are working on
recalculating our 2019 baseline and reduction
pathway to align with the Forest, Land and
Agriculture (FLAG) guidance and latest guidance in
the Greenhouse Gas protocol. We plan to submit
our FLAG targets for SBTi approval in early 2026.
Target
Zero operational waste to landfill by 2030.
Target
Reduce food waste by 50% by 2030 from our
FY 2019 baseline.
Performance
Our Scope 1, 2 & 3 greenhouse gas emissions
decreased by 16% against our FY 2019 baseline
in FY 2025, driven by reduced energy consumption,
reduced reliance on gas and a reduction in the
emissions associated to the products we buy.
Total Scope 1 & 2 emissions reduced from the
baseline by 22% (FY 2024 18%) driven by energy
consumption reduction initiatives, and the
removal of gas from the estate. We made good
progress in reducing gas usage with 100 electrified
kitchens now in place, and 24 sites where gas has
been fully removed and replaced by air source
heat pumps. We also continued our solar panel
roll out with 244 sites with panels installed, and
plans to install panels at 100 sites in FY 2026.
Our Scope 3 emissions, including all other indirect
emissions that occur in our value chain, reduced by
15% versus our 2019 baseline driven by reductions
in emissions associated with the products we buy
and our supply chain logistics. Scope 3 emissions
represent 92% of our baseline footprint and therefore
are an important focus of our transition plan. Food
emissions are the largest individual contributor to our
footprint and we have made good progress over the
year, by continuing to engage with our suppliers
on reduction opportunities and by enhancing the
quality of data we hold on product level impact. We
will continue to progress our work with suppliers
with the aim of reducing our food emissions,
which is a key focus for achieving Net Zero.
Performance
During the year we have diverted 99% of
operational waste from landfill, putting us on track
to deliver our target of zero operational waste to
landfill by 2030. In partnership with our waste
management providers, we have run a bin
optimisation programme, ensuring that all of our
sites have appropriate recycling and general
waste bins in the most accessible areas of the
business, to encourage improved segregation of
waste. To facilitate the introduction of Simpler
Recycling legislation in England, which came into
effect in March 2025, we delivered nearly 10,000
additional recycling bins across the estate.
Supported by our sustainability ambassadors and
communication to encourage behaviour change
we have improved our recycling rate to 60% with
rates increasing in the latter part of FY 2025 to
c. 62%, encouraging momentum which we will
carry into FY 2026.
We have targeted a recycling rate of 80% by 2030
and are working across a number of fronts to
achieve an improvement in the proportion of
waste we recycle. We are working with suppliers
to reduce the volume of packaging entering our
sites, and to ensure that as much packaging as
possible can be recycled, as well as engaging
teams in the positive environmental impact of
increased recycling rates. We will continue to
engage our teams on our environmental
ambitions through a network of Sustainability
Ambassadors and training.
Performance
This year we have achieved a 23% reduction in
food waste against our FY 2019 baseline. Food
waste reduction has been achieved through
strengthened operational procedures which
reduce the level of waste generated during the
food prep process, including enhanced ordering
accuracy, as well as reduced menu complexity.
The introduction of auto-ordering helped to
improve the forecasting of dish mix and therefore
reduced waste through spoilage. In addition, we
have continued our roll out of Too Good To Go
which is now across seven brands, saving on
average over 13,000 meals a week from wastage
and having saved over 2.65 million meals from
waste since the beginning of the partnership.
In the year we collected data to understand the
drivers of food waste including plate, preparation,
spoilage and buffet waste. Analysis of the data
has helped us to develop strategies to deliver
further food waste across these areas.
Unavoidable food waste from our pubs and
restaurants is sent to anaerobic digestion.
We remained focused on managing waste within
the supply chain, particularly around menu
changes and key dates, and made good progress
last year. Where possible we donate food which
would otherwise go to waste to FareShare who
redistribute the food to community groups who
need it. During the period we donated 18 tonnes
of food through FareShare, the equivalent of
c. 41,000 meals.
Zero
Target to achieve Net Zero
greenhouse gas emissions
by 2040
Zero
Target to achieve zero operational
waste to landfill
by 2030
50%
Target to reduce food waste by 50%
by 2030
Mitchells & Butlers plc Annual Report and Accounts 2025
45
Governance Financial Statements Other Information
Task Force on Climate-related
Financial Disclosures (‘TCFD’)
We are pleased to confirm that we have included
climate-related financial disclosures consistent
with the TCFD recommendations and
recommended disclosures, except for Scope 3
emissions, and in compliance with UKLR
6.6.6R(8). Our report addresses the four TCFD
pillars: Governance, Strategy, Risk Management
and Metrics and Targets. In preparing this
information, all of the guidance in Section C and E
of the TCFD Annex has been considered. Scope 3
emissions have not been disclosed for the current
period. Our intention is to disclose Scope 3
emissions on the conclusion of our rebasing for
Forest, Land and Agriculture targets as required
by Science Based Targets initiative, allowing us to
begin disclosure on a basis which we expect to
remain consistent in future years. We anticipate
our internal processes to be concluded in the first
half of 2026 with Science Based Targets initiative
approval to follow.
Governance
We, alongside our stakeholders, recognise that
the health of our planet is critical to the wellbeing
of society at large and that the food industry has
a significant part to play in addressing the current
climate emergency. We also recognise that the
food industry will feel the effects of continued
climate change ever more acutely which will result
in changes in consumer behaviour, advances in
innovation and the evolution of leisure offers to
adapt to changing needs.
The purpose of this statement
is to provide investors and
wider stakeholders with an
understanding of Mitchells
& Butlers plc’s governance
structure in relation to climate,
our exposure to climate-related
risks and opportunities, our
strategic response to managing
identified risks and opportunities
and the key metrics we use.
The Board of Mitchells & Butlers plc is committed
to delivering the purpose of the organisation: to
be the host of life’s memorable moments, and to
do so in a way which reduces the environmental
harm caused by operations. The Board considers
climate-related matters when reviewing and
guiding strategy, investment decisions and the
risk management policies. Our approach to
climate enables us to evolve our offers to meet
changing consumer expectations in order to
realise potential climate-related opportunities
whilst also monitoring and addressing the risks
posed by climate. We have developed a clear
governance framework to support our
assessment and response to climate-related
matters. This framework has helped us to
continue to make progress against our climate
goals and to address challenges faced by the
industry as a whole.
Strategy and risk management
In response to the TCFD requirements, we
performed a detailed review of the climate-related
risks and opportunities relevant to the business.
The resulting principal risks were added to the risk
register and are now assessed on a regular basis
as part of the Risk Committee’s review.
Identifying, assessing and managing
climate-related risks and opportunities
The following stages formed the process of
identifying and assessing climate-related risks
and opportunities:
• Workshops were held with external third
parties who reviewed Mitchells & Butlers’
operations before generating a list of
climate-related risks and opportunities
relevant to the business. These were
considered alongside guidance from the
World Business Council for Sustainable
Development (“wbcsd”) Food, Agriculture
and Forest Products TCFD Preparer Forum
to formulate a list of all the climate-related
risks and opportunities which may impact
our organisation.
• Workshops were held with representatives
from relevant functions across the organisation
to obtain a wide range of perspectives on the
identified climate-related risks and
opportunities. Using expert knowledge of the
business and its supply chain, experience from
past events and insight into guest behaviour,
each risk and opportunity was assessed and
opinions were gathered on future change and
perceived risk materiality. The output of the
workshops was a reduced list of risks and
opportunities which were considered to be
most material to the organisation based on this
qualitative assessment. This process helped to
reinforce our response to TCFD requirements.
• Our established risk management framework
and heat mapping (see page 52) were then
used to establish which of those identified
risks were likely to be material to our business,
being those with a high likelihood and a high
impact. Two risks were identified to be material,
and therefore have now been included as
principal risks, with the results discussed and
approved by the Risk Committee. Our
sustainability strategy has been developed
to mitigate those risks where possible with
associated KPIs to track progress, as well as
risk indicator measures which identify if the
impact of an identified risk is increasing.
All potential climate-related risks and
opportunities are reassessed annually through
the Sustainability Steering Committee and Risk
Committee. Analysis and response to risks are
supported by TCFD guidance and evolving
corporate best practice. Additional risks are
added to the principal risk register if the criteria
to do so are met; no additional risks have been
added to the register in the financial year.
Through our membership and active involvement
in industry-led organisations, such as the UK
Hospitality Sustainability Committee and Zero
Carbon Forum, and through regular dialogue with
suppliers, we will continue to collaborate on our
responses to climate risks and to seek out
opportunities to progress against our goals.
We engage actively with our suppliers on
sustainability issues, including at our annual
supplier conference and annual supplier surveys,
and will be seeking to further progress alignment
of objectives which will help manage climate
risks through Scope 3 emissions measurement
and management.
Annual Report and Accounts 2025 Mitchells & Butlers plc46
Introduction
Strategic Report
Climate-related risks and opportunities
management and strategy
Our analysis of climate-related risks and
opportunities identified the risk of the introduction
of carbon taxes and the risk of increased severe
weather events as material and these risks have
been included within our principal risks (see page
52). Carbon tax is included within Risk 2–Cost of
goods, critical products and services; and severe
weather is included within Risk 3 –Supply chain.
These risks are consistent across all of our locations.
During the year we have conducted quantitative
analysis of identified risks. In the modelling of
climate-related risks we have considered three
warming scenarios, using the Representative
Concentration Pathways (RCP) 2.6, 4.5 and 8.5
developed by IPCC as a basis for our assumptions.
RCP capture forecasts how concentrations of
greenhouse gases in the atmosphere will likely
change as a result of human activity, and predict
the future impact on regional climates. RCPs are
widely recognised and represent respectively
1.6°C of warming, 2.4°C of warming and 4.3°C
of warming. Our analysis assesses the short-term
risks as being between 0-3 years, in line with how
we assess our principal risks and viability statement;
medium-term risks between 3-6 years; and
long-term risks between 6-20 years in line with our
longer-term contracts and climate commitments.
The results of the quantitative analysis will be
considered in our financial planning as we make
progress against our transition plan. Elements of
the sustainability strategy are already embedded
in financial planning, for example capital
investment in sustainable technology and
building development are considered at Group
level and built into the annual capital plan and
specific initiatives developed by brands to ensure
optimal alignment with guest needs are factored
into brand budgeting assumptions. The financial,
and environmental impact of all sustainability
initiatives are carefully tracked and reported to
the Sustainability Steering Committee which in
turn escalates any material impact to the Executive
Committee and Board.
Board oversight of climate-related
risks and opportunities
The Board is responsible for the long-term success
of Mitchells & Butlers plc and has an established
framework in place which enables effective
assessment and management of risks, including
climate-related risks and opportunities.
Responsibility for ESG matters is managed within
the framework by the Corporate Responsibility
Committee, a Board level committee, using insight
from the Group Risk Committee on the assessment
of climate-related risks, the Group Audit Committee
on the financial consideration of climate-related risks
and the Group Remuneration Committee on the
inclusion of climate-related metrics in remuneration.
The Corporate Responsibility Committee is chaired
by Bob Ivell and is led by Dave Coplin, Non-Executive
Director, who has been designated by the Board to
take a lead role in oversight and development of the
Company’s approach to climate-related issues.
Dave Coplin has, for the last 30 years, been providing
strategic advice and guidance on driving innovation
and transformation to organisations and
governments both here in the UK and around the
world giving him excellent experience in this role.
The Committee is made up of five Board members
with Phil Urban invited to attend regularly.
Board of
Directors
The Corporate Responsibility Committee meets
at least twice a year to review progress utilising
information provided by the Sustainability Steering
Committee. The Sustainability Steering Committee,
which is a management level committee, provides
regular update papers to the Corporate
Responsibility Committee, including performance
against stated targets including Net Zero by 2040,
waste management and food waste reduction, as
well as progress on key transition plan initiatives.
The Board is updated at least annually on performance
against targets and initiatives or investment, either
underway or future, which facilitate the attainment
of our goals. Ad hoc updates are provided where
approval is required, or a significant development
is reported. As such, climate-related risks and
opportunities form an important part of the context
from which the organisational strategy is considered
and developed, ensuring that the Group is positioned
to protect itself from financial and reputational risks
associated with climate.
This structure also enables the Company to benefit
from the commercial opportunities of accelerating
the sustainability programme in order to align brand
propositions with guests’ changing needs. When
considering any business planning activity, the Board
takes into consideration the broader context of its
trading environment, with details of the climate aspect
provided by the Corporate Responsibility Committee.
Corporate
Responsibility
Committee
The Sustainability Steering Committee is
a management level Committee which has
responsibility for the continuous monitoring
and evolution of the sustainability strategy.
The Committee oversees the three working groups
responsible for discrete areas of the sustainability
strategy: respect for the planet, pride in our offers
and care for communities.
The Sustainability Steering Committee meets with
the working group leads every eight weeks, and
receives supporting update papers in advance of
meetings. The meetings ensure that the Sustainability
Steering Committee maintains oversight over
sustainability activities which are in place across
various business functions, ensuring that our
approach is consistent and executed effectively.
These meetings also provide the foundation of the
update information provided to the Board-level
Corporate Responsibility Committee. The
Sustainability Steering Committee also meets on
a monthly basis with members of the Executive
Committee to inform management on progress of
key initiatives and to discuss any decisions required
by the Executive Committee.
Sustainability
Steering
Committee
Mitchells & Butlers plc Annual Report and Accounts 2025
47
Governance Financial Statements Other Information
Task Force on Climate-related Financial Disclosures continued
Transition risk
Risk
Introduction of carbon taxes and levies
Category
Operational costs
Description
This risk represents the impact on operating
costs of the business both directly through
taxation and indirectly through higher
input costs which would result from the
introduction of taxation and levies
attributed to greenhouse gas emissions.
Qualitative assessment has identified this
risk as both high in impact and likelihood
over the medium to long term especially
under RCP4.5 and RCP8.5 warming
scenarios. The introduction of a form of
carbon taxation is likely to be introduced as
pressure mounts for progress to be made
against the Government ambition to
achieve Net Zero by 2050.
Mitigating actions
We have developed a Net Zero strategy with a target
date of 2040 which has been validated by Science Based
Targets initiative (SBTi). We plan to resubmit for Forestry,
Land and Agriculture (FLAG) SBTi in 2026 and are
working on recalculating our 2019 baseline and
reduction pathway.
We have a number of initiatives underway designed to
reduce our emissions in line with our Net Zero roadmap.
In order to reduce Scope 1 & 2 emissions, we are investing
in solar panels, electric kitchens and fully electrifying
sites. Furthermore, we are investing in technology and
focusing on behavioural change that will reduce our
energy consumption.
The detailed plan for reduction will help to mitigate an
element of potential cost, and a target date ahead of
Government ambition will help to position the
organisation ahead of the market average.
In order to reduce Scope 3 emissions, we are working
closely with suppliers, particularly in high emission
categories, to support their pathway to carbon reduction
which will help to mitigate an element of this risk.
However, if input costs increased materially in response
to carbon taxes margins would be at risk.
We are a member of UK Hospitality Sustainability
Committee which enables us to have foresight over
potential policy changes impacting the organisation.
Quantitative analysis considerations
The approach to the quantitative assessment
performed took the Group’s forecast carbon
emissions, from our Net Zero plan submitted for
Science Based Targets initiative approval, and
applied the 2025 carbon price for use in civil
penalties in the UK of £41.84 per tonne of CO
2
over the short, medium and long term giving an
estimate of the potential financial impact of the
introduction of carbon taxes.
Under RCP2.6, a scenario under which warming
remains under 1.6°C, we have considered the
introduction of carbon taxes is unlikely as other
action has controlled temperature rise.
Under RCP4.5 we assume a high likelihood of
introduction of taxes in relation to Scope 1 & 2
emissions in the long term as warming poses a
greater risk and intervention is introduced to
attempt to limit warming.
Under RCP8.5, where warming is 4.3°C, the
impact would be considerable with increased
severe weather events and considerable impact
on human welfare. We have considered
intervention in both the medium and long term
likely, and due to the scale of impact have
assumed carbon tax of Scope 1, 2 & 3 emissions
in the long term.
Our sustainability strategy is designed to mitigate
the financial and reputational impact of climate-
related risks and to capture the benefit of aligning
our brand proposition to changing consumer
needs. In particular, we have a well-developed
transition plan to Net Zero, which has been
designed in collaboration with third-party experts
and was validated by Science Based Targets
initiative (SBTi). We are working on recalculating
our 2019 baseline and reduction pathway to align
with the Forest, Land and Agriculture (FLAG)
guidance and latest guidance in the Greenhouse
Gas protocol. We plan to submit our FLAG targets
for SBTi approval in early 2026. Our Net Zero
roadmap aligns with SBTi methodology to keep
global warming well below 2°C. This detailed
roadmap provides the benchmark against which
performance can be tracked to a low emission
economy, with our contribution clearly understood
as well as that of our suppliers, such that we can
influence others in our supply chain to reduce
their emissions.
Sustainability is a key priority for the Board
and management and remains so despite the
challenges currently faced by the industry as a
whole. Hence, we have included a Sustainability
target in our Long-Term Incentive Plan for the
Executive and Leadership team and intend to
include appropriate measures within incentives
plans through the organisation to outlet level.
The financial impact of identified climate-related
risks and opportunities bring to life the possible
consequences for the business and its supply
chain. The various warming scenarios were
developed using the Met Office predictions of
future weather events. We performed a qualitative
analysis of the possible (1) reduction in sales (2)
increase in supplier costs (3) increase in damage
to properties under the three warming scenarios.
We believe that we have a robust strategy in place
to help mitigate an element of the risks posed
particularly under RCP 2.6 where the impact is on
the organisation and supply chain is lower. Under
extreme warming scenarios, such as RCP 8.5 the
impact on the environment will be more severe
reducing our ability to mitigate and manage risks,
with food supply chain disruption being a
particular area of risk. We have a centralised
building management team who monitor the
physical risk to our estate and our sustainability
strategy is designed to address the transition risks
identified. We are conscious that collaboration,
particularly with the supply chain, will be vital in
order to tackle the future challenges ahead.
Identifying ways to develop commercially viable
solutions to approach the environmental impact
of the food supply chain, an area of greater risk,
is a significant challenge and one on which we are
working with industry bodies, supply chain
partners and other hospitality businesses. Under
a 4°C warming scenario whereby, according to
Met Office predications, adverse weather events
would be far more frequent, the impact of both
our physical and transition risks are higher. From a
physical risk perspective, due to sea levels rises in
this scenario, a small number of sites would enter
the flood risk register and we would expect
increased frequency of damage to properties
caused by storms and extreme weather. We
monitor the frequency of weather-related
damage to buildings centrally and would evolve
an enhanced strategy to mitigate the risk under
this scenario should this be the likely direction
of travel.
Below is a summary of the climate-related risks
included within our principal risk register, for
further details on our risk assessment framework
please see pages 52 to 59.
Risk level
Short-term Medium-term Long-term
Annual Report and Accounts 2025 Mitchells & Butlers plc48
Introduction
Strategic Report
Physical risk
Risk
Increased severity of extreme
weather events
Category
Acute
Description
This acute physical risk represents the risk
to both revenue and the supply chain of
increased severe events. Revenue would
be impacted through the interruption to
trade caused by both extremely hot
weather and adverse weather such as rain
and snow, as well as possible site closure
resulting from flooding. In addition, the
availability of products in the supply chain,
in particular agricultural produce, could be
impacted by severe weather affecting
product availability and input prices.
The qualitative assessment of potential
revenue impact included a high-level
review of previous interruption to trade
resulting from extreme weather and
considered scientific forecasts as to the
likely increase in extreme weather events.
Procurement information relating to
previous disruption to supply chain due to
localised weather events and geopolitical
issues were reviewed and considered in
the context of increased severe weather
events. As a result of these assessments
the risk has been identified as both high
impact and high likelihood.
Mitigating actions
The weather has a high level of impact on trading levels
across the estate and therefore monitoring weather
forecasts in relation to expected trading levels is a normal
part of the financial planning of the business.
This monitoring activity will enable us to identify when
patterns of increased instances of extreme weather
events begin to develop at which point investment in
mitigating action, such as installation of air conditioning,
can be considered. In addition, our experience during
Covid has meant that we have developed strategies to
close sites at short notice, such that in the instance of
extreme weather significantly impacting trade we could
close sites in order to mitigate some of the financial losses
which we would be exposed to.
In relation to site closure due to damage to buildings,
such as during flooding, we have insurance in place to
recover the lost trade and required repairs and therefore
does not represent a significant risk in the short term;
however this might impact us in the medium and long
term under RCP4.5 and RCP8.5 if the business incurs
higher insurance premiums and is unable to insure some
buildings at high risk of flooding.
To manage the risk associated with our supply chain,
we monitor and communicate with our suppliers closely
giving us foresight over potential supply issues. We also
have sufficient breadth of products across our brands
that supply issues with one product could be mitigated
through switching to a substitute. We are also aware
of emerging agricultural techniques which are less
susceptible to weather conditions, such as vertical
farming and regenerative agriculture, as well as shifting
crops to more favourable conditions, and would consider
these alternatives if the supply chain was likely to
become severely impacted.
Quantitative analysis considerations
The quantitative assessment performed involved
a detailed analysis of extreme weather’s previous
impact on trade to determine the potential impact
on revenue. In order to quantify the future impact
of extreme weather, four weather-related data
points (maximum temperature, minimum
temperature, rainfall and wind speed) were taken
from the Met Office Climate Projections under
RCP2.6 and RCP8.5 warming scenarios. These
were used to determine the financial impact of
weather-related extreme events in the short,
medium and long term under the three warming
scenarios, that is above and beyond what the
Company has experienced in the last three
financial years.
To measure the potential impact on the supply
chain, we reviewed historical impacts of a variety
of weather events and gathered scientific
evidence showing up to 31% decrease in crop
profits under RCP8.5, half of which can be
avoided by reallocating crop lands, and no
material impact on livestock products. Hence,
we have assumed 5% increase in crop items cost
under RCP4.5 and 10% under RCP8.5 as we will
be able to implement strategic ingredient swaps
to dishes to adjust for certain product’s inflation,
both were considered in the long term only.
To measure the potential impact of increased
flood risk on the estate, we assumed that in the
short term the risk would be mitigated by insurance.
In the medium and long term our insurance
premiums would increase under RCP4.5 and
RCP8.5 due to an expected increase in flood
instances which was derived by the Met Office
Climate Projections. In the long-term scenario
under RCP8.5, due to significantly increased
flooding we have assumed that half of our
high-risk sites would be unlikely to be insured
resulting in exposure to financial risk.
Transition opportunity
Risk
Adjusting brand propositions to appeal
to changing consumer preference
Category
Revenue
Description
Changing consumer preferences towards
products seen as better for the environment,
for example dietary shifts towards low
carbon products, presents an opportunity
for the Group to position brands to appeal
in an evolving market. The breadth of
brands within the Group portfolio provides
the opportunity to test adapted brand
propositions in a low risk way and to
therefore be ahead of the market when
consumer preferences begin to change
in the mass market.
Mitigating actions
All of the initiatives under the sustainability strategy
help to strengthen the Group’s position in relation to
environmental matters. This allows our brands to
communicate with guests on environmental issues with
consistency across the portfolio and to build a reputation
for sustainable operations.
Our focus on achieving ambitious environmental targets
will position the Group well to benefit from changing
consumer habits. Our ability to trial proposition
adaptations in appropriate brands to gauge guest reaction
will ensure we are well prepared to make informed
decisions in the future as consumer preferences change.
In addition, our scale and commitment to our investment
programme will enable the Group to enhance the
sustainability credentials of its properties.
Quantitative analysis considerations
Consumer insight is continuously reviewed and
is used to inform brand evolution. In addition,
direct consumer feedback is used to highlight
changing guest preferences, and reactions to
brand changes designed to enhance
environmental credentials.
Alongside financial performance these metrics
will inform the future evolution of our brands.
Mitchells & Butlers plc Annual Report and Accounts 2025
49
Governance Financial Statements Other Information
Task Force on Climate-related Financial Disclosures continued
Summary of quantitative assessment
Potential financial impact on profit in the average
year (£m)
Risk level
Low Medium High
Introduction of carbon taxes and levies
Key Assumptions Time Horizon RCP2.6 RCP4.5 RCP8.5
• We calculated the financial risk of carbon taxes and levies based
on our Scope 1, 2 & 3 emissions, as per our SBTi submission,
in the short, medium and long term.
• We used the 2025 carbon price for use in civil penalties in the
UK – £41.84 per tonne of CO
2
e
<3 years
3–6 years
6–20 years
Increased severity of extreme
weather events
Key Assumptions Time Horizon RCP2.6 RCP4.5 RCP8.5
1. Sales risk
• Maximum temperature, minimum temperature, rainfall and
wind speed were taken from the Met Office Climate Projections
under RCP2.6 and RCP8.5 warming scenarios.
• The above weather events were quantified to determine the
financial impact of weather-related extreme events in the short,
medium and long term under the three warming scenarios,
above and beyond what we have experienced in the last three
financial years.
<3 years
3–6 years
6–20 years
2. Supplier costs risk
• Assumed 5% increase in crop items cost under RCP4.5 and 10%
under RCP8.5, both were considered in the long term only.
• Assumed no increase in livestock cost under RCP4.5 and RCP8.5.
<3 years
3–6 years
6–20 years
3. Flood risk
• Assumed that our insurance premiums will increase in the
medium and long term under RCP4.5 and RCP8.5
• Assumed that half of our high-risk sites are unlikely to be
insured in the long term under RCP8.5.
<3 years
3–6 years
6–20 years
Annual Report and Accounts 2025 Mitchells & Butlers plc50
Introduction
Strategic Report
Climate-related metrics & targets
The below metrics are used either to track the performance of strategies designed to mitigate the impact of the principal climate-related risks, or as an internal
measure of risk exposure. Emission reduction has been included in the long-term incentive scheme from FY 2024 with the SBTi verified Net Zero reduction
plan used as a basis to calculate targets. Performance against our stated sustainability KPIs is provided on pages 42 and 43. Current and historical greenhouse
gas emissions, Scope 1 and 2, are available within the Streamlined Energy and Carbon Reporting framework and progress against our Net Zero roadmap is
provided annually with details on the key initiatives within the sustainability section.
Metric category Metric Group targets Performance Link to identified
risks and
opportunities
Climate-related risk
Greenhouse gas
emissions Scope
1, 2 & 3
Unit of measure
tCO
2
e
Absolute Scope 1, 2 & 3
emissions calculated in
accordance with
Greenhouse Gas Protocol
guidance by an
independent third party
which is checked and
verified internally.
Yes – Group target set, Net Zero by 2040
using 2019 as our baseline year.
We align our definition of Net Zero to the
SBTi corporate standard. Our Net Zero
target includes our Scope 1, 2 & 3
emissions, using an operational control
approach. Our near and long-term targets
were verified by SBTi in January 2024. We
have set a near-term target to reduce our
absolute Scope 1 & 2 GHG emissions 70%
by 2030, compared to a 2019 base year
(aligned to well below 2°C), and a target
to reduce our absolute Scope 3 emissions
28% over the same timeframe. We have
also set a long-term target to reduce
absolute GHG emissions from Scopes 1, 2
& 3 90% by 2040 from a 2019 base year to
be Net Zero by 2040. Aligned to the SBTi
criteria we will offset our residual 10%
emissions using carbon removal offsets
at our Net Zero date.
We have reduced our total
footprint by 16% from our
2019 baseline year,
comprising a reduction in
Scope 1 & 2 emissions of
22% driven by energy
consumption reduction
and reduced reliance on
gas as an energy source,
and Scope 3 reduction of
15% reflecting progress
made in partnership with
our suppliers to reduce the
impact of our supply chain.
Risk 2 – “Cost of goods,
critical products and
ser vices.”
Climate-related risk
Waste management
Unit of measure
% of waste diverted
from landfill
Proportion of total waste
diverted from landfill, i.e.
recycled or incinerated.
Data is provided by a third
party and corroborated
with internal information.
Yes – Group target set – Zero operational
waste to landfill by 2030.
We underpin this target with an internal
metric on recycling, with an ambition to
achieve 80% of waste recycled by 2030.
99% of operational waste
is diverted from landfill.
We expect to achieve zero
operational waste to landfill
ahead of the 2030 target.
Risk 2 – “Cost of goods,
critical products and
ser vices.”
Climate-related risk
Food waste
Unit of measure
Volume of food waste
generated
Volume of food wasted.
Data is provided by third
parties and corroborated
with internal information.
Yes – Group target set – Halve food waste
by 2030 from 2019 baseline.
We have achieved 23%
reduction of food waste
from 2019 baseline.
Risk 2 – “Cost of goods,
critical products and
ser vices.”
Climate-related risk
Proportion of estate
exposed to flood risk
Unit of measure
% of estate
Proportion of sites within
the estate identified as
high or medium flood risk
due to proximity to rivers
and coasts.
No target set, used as an internal measure
of risk exposure.
Risk 3 – “Supply chain.”
Climate-related
opportunity
Transition to renewable
energy
Unit of measure
% and Megawatt Hour
(‘MWh’)
% and MWh of energy
consumption which is
purchased from renewable
sources. Data is provided
by third parties and
reviewed internally.
No target set, reported as an indicator
of progress.
100% of energy
purchased is REGO
backed. In addition, 244
sites have been fitted with
solar panels to date with
continued roll out planned
over the coming years.
Risk 2 – “Cost of goods,
critical products and
ser vices.”
Climate-related
opportunity
Workforce competence
Unit of measure
Number of employees
to complete training
Sustainability training
made available to all
employees.
Sustainability included as
part of the induction process.
Target 80% of General Managers to
complete training and 90% of inductions
to have included sustainability.
100% of General
Managers have completed
the Sustainability training
and we continue to release
training to specific areas,
for example water
consumption where 96%
of team members have
completed the training.
Risk 2 – “Cost of goods,
critical products and
ser vices.”
Mitchells & Butlers plc Annual Report and Accounts 2025
51
Governance Financial Statements Other Information
Risks and uncertainties
Keeping risk under control
This section highlights the principal risks and uncertainties
that affect the Group, together with the key mitigating
activities in place to manage those risks.
Overview
Risk management is critical to the proper
discharge of our corporate responsibilities and
to the delivery of shareholder value. Risk is at the
heart of everything we do as an organisation.
Therefore, the process for identifying and assessing
risks and opportunities for improvements is an
integral and inseparable part of the management
skills and processes which are at the core of
our business.
There is a formally established Risk Committee
in place which continues to meet on a quarterly
basis to review both the key risks and emerging
risks facing the business.
Key risks identified are reviewed and assessed
by the Risk Committee in terms of their likelihood
and impact and recorded on the Group’s ‘Key Risk
Heat Map’, in conjunction with associated agreed
risk mitigation plans. The processes that are used
to identify emerging risks and manage known
risks are described in the Internal Control and Risk
Management statement on pages 92 and 93.
Management support, involvement and
enforcement is fundamental to the success of our
risk management framework and members of the
Executive Committee take responsibility for the
management of the specific risks associated with
their function. Our Group risk register clearly
outlines the alignment of each key risk to an
Executive Committee member and identifies
an ‘action owner’, to ensure responsibilities are
formally aligned.
There is a robust and transparent process in place to
provide an appropriate level of direction and support
in the identification, assessment and management
of risks across all areas of the business which have
the potential to seriously damage our financial
position, our shareholder value, our responsibilities
to our staff and guests, our reputation and our
relationships with key stakeholders.
During FY 2025, we carried out an assessment of
the Group’s emerging and principal risks. As part
of this process we undertook a series of risk
workshops with senior management across the
business functions, to reassess and update the
Group’s principal risks, resulting in the identification,
assessment and management of risks across all
areas of the business. As part of the output of this
review, we have consolidated the previously
identified risks into the below principal risks.
Overall, there are no material changes to the risk
profile of the Group.
The principal risks are subject to review each
quarter by the Audit Committee, which is also
attended by the Board.
Key risk heat map
The key risk heat map below includes an
indication of the likelihood of a ‘risk event’
occurring in relation to each of the principal risks
and the expected magnitude of the impact of
each such event. The risk assessments in the
graph are after taking into account the mitigating
actions against each of the risks.
Overview of risk profile
Risk key
1
Sales
2
Cost of Goods, Critical Products
& Services
3
Supply Chain
4
IT Resilience & Cyber Security
5
Operating Safely & Legally
6
Property Asset Management
7
People
8
Capital Structure
9
Business Continuity Planning
Impact
Likelihood
Low Catastrophic
Rare Almost Certain
4
7
155
158
152
1
159
153
156
Our three lines of defence
First
• Executive Committee
• Leadership group/management
• Internal controls and processes
• Internal policies and procedures
• Training
Second
• Financial authority limits
• Risk management processes
• Audit Committee
• Risk Committee
• Health and Safety Team
• Technology specialists
• Legal support
Third
• Group Assurance
• Operational Practices Team
Please also refer to how we link the key risks to our
strategic priorities, on page 41.
Annual Report and Accounts 2025 Mitchells & Butlers plc52
Introduction
Strategic Report
Risk category and description High-level controls/mitigating activities Movement
1
Sales
This risk falls into the below main categories:
Sales: There is a risk that declining sales, concerns around
consumer confidence, increased personal debt levels,
squeezes on disposable income and rising inflation individually,
together or in combination, may adversely affect our market
share and profit, reducing headroom against securitisation tests.
Consumer and market insight: If the Group fails to manage
and develop its existing (and new) brands in line with consumer
needs and market trends due to failure to obtain or use
sufficient insight in a timely manner, this may lead to a decline
in revenues and profits.
Pricing and market changes: If price changes are not
intelligently applied due to a lack of appreciation of market
sensitivities and elasticities, this may result in decreased
revenue and profit.
Risk Stable
Overall, this risk remains stable.
• Right operational and commercial team and structure in
place. Brand alignment ensures the right research is done
and is acted upon.
• Daily, weekly and periodic sales reporting, monitoring and
scrutiny activity is in place.
• Our Eat Drink Share panel provides robust, quick and
cost-effective research. This is our own panel of 27,000
of the Group’s guests, whom we can use for research
purposes for quick and cost-effective insights.
• Primary research in partnership with brand and
category teams.
• Working with suppliers to tap into their research.
• Each brand has its own pricing strategy.
• Price promotions are in line with the agreed strategy.
• Sales training for management.
• Consumer and insight-led innovation process and
development for new brands.
• Reduce guest complaints by improving the local management
of social media responses (e.g. TripAdvisor responses).
• Increased digital marketing activity including new
loyalty apps.
• Increased activity from takeaway and delivery offerings.
• Online guest satisfaction survey to collect guest feedback.
This feedback, together with the results of research studies,
is monitored and evaluated by a dedicated guest insight
team to ensure that the relevance to guests of the brands
is maintained.
• Our priority is to continue to protect our team members and
guests, providing an eating-out experience which can be
enjoyed. We have very strong health and safety practices
already in place in our businesses, which we will enhance
and evolve to tackle the challenges we face. We will be
transparent with guests as to these measures such that they
can trust in us and will clearly communicate our expectations
of guests to comply with the measures put in place.
Risk Stable
Mitchells & Butlers plc Annual Report and Accounts 2025
53
Governance Financial Statements Other Information
Risks and uncertainties continued
Risk category and description High-level controls/mitigating activities Movement
2
Cost of goods, critical products
and services
Food: The cost of food for resale increases due to changes in
demand, food legislation, exchange rates and/or production
costs and uncertainty of supply, leading to decreased profits.
Drinks: The cost of drinks for resale increases due to changes
in demand, legislation, exchange rates and production costs,
leading to decreased profits.
Utility costs: Utility costs continue to remain stable, with only
a minimal fluctuation in costs.
Goods not for resale: Increases in the cost of goods not
for resale and utilities costs as a result of increases in global
demand and uncertainty of supply in producing nations can
have a significant impact on the cost base, consequently
impacting margins.
Business rates: The UK Government announced in the
Autumn Budget 2024 that it would make changes to business
rate charges for certain Retail, Hospitality and Leisure
businesses, and that subsequent to that would engage in
discussions for wider business rates reform. Changes to
business rates could lead to higher or lower profits.
Introduction of carbon taxes and levies: This risk
represents the impact on operating costs of the business both
directly through taxation and indirectly through higher input
costs which would result from the introduction of taxation and
levies attributed to greenhouse gas emissions. Qualitative
assessment has identified this risk as both high in impact and
likelihood over the short to medium term. Whilst the risk is
currently assessed as stable, the introduction of a form of
carbon taxation is likely to be introduced as pressure mounts
for progress to be made against the Government ambition to
achieve Net Zero by 2050.
Risk Increasing
The overall risk of cost increases continues to rise; however,
mitigation to inflation is sought where possible through a
change of supplier, products, specification, range and an
ongoing review and monitoring of energy cost management.
In order to reduce the overall impact of cost increases, the
Group leverages its scale to drive competitive cost advantage
and collaborates with suppliers to increase efficiencies in the
supply chain. The fragmented nature of the food supply
industry in the world commodity markets gives the Group the
opportunity to source products from a number of alternative
suppliers in order to drive down costs. Consideration has been
given to potential areas such as supply chain risk (e.g. customs
controls on imports), labour risk and economic disruption.
Key mitigating activities for food and drink are detailed below:
Food:
• A food procurement strategy is in place.
• Full reviews are carried out on key categories to ensure
optimum value is achieved in each category.
• A full range review was completed in FY 2025 ensuring
the correct number of products and suppliers. This is
regularly reviewed.
• Regular reporting of current and projected inflation.
• Good relationships with key suppliers.
Drinks:
• Each drinks category has a clearly defined strategic sourcing
plan to ensure the Group’s scale is leveraged, the supply
base is rationalised, and consumer needs are met.
• Good relationships with key suppliers.
• Supplier collaboration programmes are in place.
Business rates:
• The Group retains the services of professional advisors
to ensure legislative changes are fully understood
and implemented.
Energy:
• Installation of solar panels at sites to reduce reliance on
the grid.
• The Group is a member of the UK Hospitality Sustainability
Committee which enables us to have foresight over
potential policy changes impacting the organisation.
• The Group has developed a Net Zero strategy with a target
date of 2040. The strategy has been developed in partnership
with an independent third party. Please also refer to our
sustainability targets, outlined on pages 44 and 45.
• We have a number of initiatives underway designed to
reduce our emissions in line with our Net Zero roadmap.
The detailed plan for reduction will help to mitigate an
element of potential cost, and a target date ahead of
Government ambition will help to position the organisation
ahead of the market average. Please also refer to our Task
Force on Climate-related Financial Disclosures, on pages
46 to 51.
Risk Increasing
Annual Report and Accounts 2025 Mitchells & Butlers plc54
Introduction
Strategic Report
Risk category and description High-level controls/mitigating activities Movement
3
Supply chain
Food supply chain: There is a risk of inadequate
arrangements and a limited number of food suppliers in place
to ensure the supply of business-critical food lines to Mitchells
& Butlers are maintained in the event of the failure of a key food
supplier. The cumulative impact of various macro-economic
factors including the war in Ukraine has put significant pressure
on availability.
Drinks & Food logistics: There is a risk that one of our key
logistics suppliers has a significant business interruption event
that leads to a reduction in service because a distribution centre
is not available or any event that could lead to interruption in
service from a single depot, which leads to business and
service interruption to our sites. However, overall service from
our key logistics suppliers remains good, with consistent and
reliable performance.
Food supply chain safety: Malicious or accidental
contamination in the supply chain could lead to food goods for
resale being unfit for human consumption or being dangerous
to consume. This could lead to restrictions in supply which in
turn cause an increase in cost of goods for resale and reduced
sales due to consumer fears and physical harm to guests and/
or employees.
Increased severity of extreme weather events: This acute
physical risk represents the risk to both revenue and the supply
chain of increased severe events. The availability of products in
the supply chain, in particular agricultural produce, could be
impacted by severe weather having an effect on product
availability and input prices. However, following a qualitative
assessment, which included a high-level review of previous
interruption to trade resulting from extreme weather (as well as
scientific forecasts as to the likely increase in extreme weather
events), the overall risk is assessed as stable.
Risk Stable
Given the many mitigating factors in place, the overall risks
facing the supply chain are regarded as stable.
• Critical suppliers have business contingency plans in place
which are reviewed on annual basis.
• Alternative supply options identified for top 100 products
and reviewed on annual basis.
• Our key logistics providers have their own detailed disaster
recovery plans in place.
• The Group has a Safety Assurance team and uses a number
of technical partners including food technologists, food
safety experts, microbiologists, allergy consultants, trading
standards specialists and nutritionists.
• The Group uses a robust system of detailed product
specifications.
• All food products are risk rated using standard industry
definitions and assessment of the way the products are
used in the Group’s kitchens. Suppliers are then risk rated
according to their products.
• Each food supplier is audited at least once per year in
respect of safety and additionally in response to any serious
food safety complaint or incident.
• A robust response has been taken to manage allergens
and the associated data within the menu cycle, coupled
with a continuous review in place to ensure the controls
remain appropriate.
• To manage the risk associated with our supply chain, we
monitor and communicate with our suppliers closely giving
us foresight over potential supply issues. We also have
sufficient breadth of products and dishes across our brands
such that supply issues with one product could be mitigated
through switching to a substitute. Please also refer to our
Task Force on Climate-related Financial Disclosures, on
pages 46 to 51.
Risk Stable
Mitchells & Butlers plc Annual Report and Accounts 2025
55
Governance Financial Statements Other Information
Risks and uncertainties continued
Risk category and description High-level controls/mitigating activities Movement
4
IT resilience & cyber security
Given the increase in the level and frequency of global cyber
attacks, the likelihood of occurrence is therefore increasing,
although current IT controls and monitoring tools are robust.
These attacks are becoming more frequent and the techniques
employed by the cyber criminals are becoming ever more
sophisticated. However, the likelihood of any financial damage
to the business is unchanged over the year.
There is a risk that inadequate disaster recovery plans and
information security processes are in place to mitigate against
a system outage, or failure to ensure appropriate back-up
facilities (covering key business systems and the recovery
of critical data) and loss of sensitive data.
Risk of non-compliance with data protection laws is an
increasing risk for the business to ensure full compliance
remains up to date.
Risk Stable
Overall, the risk is stable due to the ongoing review and
improvement of cyber security controls. However, the
increased activity, information security and reliance on IT
systems continue to be a key focus to ensure critical IT systems
are kept secure and tested frequently and any vulnerabilities
identified are addressed efficiently.
• A review of cyber security processes is performed on a
regular basis in order to highlight any gaps and address any
challenges. As a result, a number of further improvements
have been made (and continue to be made) to strengthen
overall security cyber controls.
• In addition, controls include:
– The work carried out by the Group’s cross-functional
Information Security Steering Group.
– Group Assurance IT reviews.
– Implementation and revision of appropriate cyber
security governance policies and procedures.
– Ongoing security awareness initiatives continue to
be undertaken.
– A regular cycle of penetration testing.
– Increased focus on protecting the business against
potential cyber attacks has resulted in the
implementation of additional controls to mitigate against
such risks.
– The effective implementation of a business-wide data
protection compliance programme, including training
of all relevant employees and contractors.
– Systems, processes and controls have been reviewed and
updated to ensure compliance with data protection laws.
– Annual IT Security training is undertaken and reported.
Risk Stable
Annual Report and Accounts 2025 Mitchells & Butlers plc56
Introduction
Strategic Report
Risk category and description High-level controls/mitigating activities Movement
5
Operating safely & legally
A major health and safety failure could lead to illness, injury or
loss of life or significant damage to the Group’s or a brand’s
reputation. In addition, there is a risk that the business fails to
maintain satisfactory food hygiene safety standards due to
failures to comply with company policy due to lack of attention,
supervision or knowledge, leading to customer harm/fatality,
and/or prosecution, adverse publicity, brand damage, fines and
loss of revenue.
Risk Stable
Overall, the risk continues to be stable. In particular, allergen-
related incidents and near misses have stabilised.
• The Group maintains a robust programme of health and
safety checks both within its restaurants, pubs and bars and
throughout the supply chain.
• The dedicated Safety Assurance team uses a number
of technical partners including food technologists,
microbiologists and allergen specialists to ensure that
our food procedures are safe.
• Regular independent audits of trading sites are performed
to ensure that procedures are followed and that appropriate
standards are maintained.
• Food suppliers are required to meet the British Retail
Consortium Global Standard for Food Safety and are
subject to regular safety and quality audits.
• Comprehensive health and safety training programmes
are in place.
• Comprehensive Food Safety policy is in place backed by
assured advice from our Primary Authority.
• Clear health and safety responsibilities are defined and
communicated across the business.
• The Safety Assurance Team attend the Trade Association
(UKH Food Group) and liaise with the Food Standards
Agency to identify and influence future industry and
legislative issues.
Risk Stable
6
Property asset management
Given the size of the property portfolio, there is a risk that
insufficient or lack of maintenance spend could lead to:
• a breach of a statutory obligation or injury or death to
customers/employees exposing Mitchells & Butlers to fines
and adverse publicity, or a breach of a securitisation covenant.
• declining trading performance.
• increased maintenance expenditure in the long run.
• reduced value of assets.
• breach of lease covenant to adequately maintain and repair.
Risk Stable
There are a number of well controlled mitigating activities that
are in place across the management of the Group’s property
estate. Therefore, the overall risk is assessed as stable.
• A robust asset management system is in place to manage
all repairs and maintenance work.
• Regular maintenance activity across all properties within
the Group, as required.
• The production and agreement of the annual building
development plans.
• Regular inspections of all of our premises to ensure all
are safe and fit for purpose.
• Suitably qualified staff and qualified external suppliers
to deliver the Group’s requirements.
• During the contractor management meetings, metrics
are used to assess suppliers including cost performance
and satisfaction.
• Estate planning and acquisition team, repairs and maintenance
team and building development teams are in place with
professional and legal support from various long-term third
party suppliers.
• In relation to site closure due to damage to buildings, such
as during flooding, we have insurance in place to recover
the lost trade and required repairs. Our experience during
closure has meant that we have developed strategies to
close sites at short notice, such that in the instance of
extreme weather significantly impacting trade we could
close sites in order to mitigate some of the financial losses
which we would be exposed to.
Risk Stable
Mitchells & Butlers plc Annual Report and Accounts 2025
57
Governance Financial Statements Other Information
Risks and uncertainties continued
Risk category and description High-level controls/mitigating activities Movement
7
People
Talent attraction and management and employee engagement:
The Group has a strong guest focus and so it is important that it
is able to attract, retain, develop and motivate the best people
with the right capabilities throughout the organisation. There is
a risk that, without the right people, our guest service levels
would be affected.
There is a risk that increased wage cost will adversely impact
upon overall profit delivery, these increased costs could arise
from further increases to the statutory minimums, application
of minimums to lower age groups i.e over 18’s and/or upward
pressure on pay rates in the market, particularly back of house
roles, as talent supply reduces. Wage pressure (over 25’s)
remains an issue, as competition for labour continues to
increase.
Risk Stable
We have strong internal talent pools for a number of operational
roles; however, it is sometimes difficult to recruit top Operations
Director talent externally due to the competitive marketplace.
The risk remains stable.
• The Group makes significant investment in training to
ensure that its people have the right skills to perform their
jobs successfully.
• An employee survey is conducted annually to establish
employee satisfaction and engagement, and this is
compared with other companies, as well as previous
surveys. Where appropriate, changes in working practices
are made in response to the findings of these surveys.
• Remuneration packages are benchmarked to ensure that
they remain competitive, and a talent review process is used
to provide structured succession planning. Please also refer
to the Report on Directors’ remuneration, on pages 98 to 118.
• The apprenticeship programme will also assist in mitigating
against the increasing risk in relation to non-UK workers.
Please also refer to the Chief Executive’s business review on
pages 26 to 28.
• Talent development and potential calibrations are carried
out biannually to anticipate and address any risks/issues.
• The ongoing review of the impact, post-implementation
of the National Living Wage and the increase to National
Insurance, will continue to be monitored and reported to
the Executive Committee and where necessary the plc
Board/Remuneration Committee.
• The Group continues to work with UK Hospitality and other
agencies to engage with the Government and the Low Pay
Commission on future pay policy and prospects.
• We have successfully implemented a time and attendance
system to improve the management controls and reporting
of staff hours.
Risk Stable
8
Capital structure
Treasury management (cash and liquidity): There is risk of
the inability to raise sufficient funds from banks or the capital
markets, leading to lack of liquidity to support the business.
Any surplus funds are invested inappropriately due to a lack
of focus on credit risk issues or inexperienced dealing staff,
leading to poor returns or ultimately loss of funds invested.
Covenant compliance: There is risk that covenants are
breached due to insufficient cashflows or failure to take
required actions in respect of non-financial covenants which
leads to refinancing or loss of control of the organisation.
Trading/cost pressures could drive reduced headroom.
Risk Decreasing
As documented in the Going Concern note, the Directors
have assessed a base case forecast and a severe but plausible
downside scenario with headroom against all covenants and
sufficient liquidity. Therefore the overall risk is decreasing.
• Strong relationships are maintained with banks and potential
providers of debt finance.
• The Board Treasury Policy dictates that a minimum liquidity
level is maintained.
• Investment of surplus funds is subject to approval under
approved limits within the Board Treasury Policy Statement.
• Treasury employees are suitably qualified with sufficient
levels of experience.
• The Group maintains sufficient headroom against
the covenants.
• Each period, covenant owners are required to confirm
compliance with non-financial covenants. Findings are
reported to the Executive Committee.
• The finance team conducts daily cash forecasting with
periodic reviews at the Treasury Committee (the role of
which includes ensuring that the Board Treasury Policy
is adhered to, monitoring its operation and agreeing
appropriate strategies for recommendation to the Board).
• Each period the Treasury Committee meets and formally
considers compliance with financial covenants and limits
(both current and projected)
• Compliance with all aspects of Board Treasury Policy.
• Regular forecasting and testing of covenant compliance
is performed.
• A detailed assessment of the mitigating risks is included
in the Viability statement on page 60.
Risk Decreasing
Annual Report and Accounts 2025 Mitchells & Butlers plc58
Introduction
Strategic Report
Risk category and description High-level controls/mitigating activities Movement
9
Business continuity planning
The Group relies on its food and drink supply chain and the key
IT systems underlying the business to serve its guests efficiently
and effectively. Supply chain interruption, IT system failure or
crises (such as terrorist activity or the threat of a further disease
pandemic) might restrict sales or reduce operational effectiveness.
Risk Stable
Overall, the risk is stable.
• The Group has in place crisis and continuity plans that are
reviewed and refreshed regularly, that are designed to
determine the response to a range of potential crises, across
the business functions.
• Crisis response teams and a separate IT crisis plan in place.
• Detailed training and development of the security team
and Executive.
• Key financial controls have been reviewed, assessed and
updated to ensure they continue to be operated in the event
of limited and/or no access to either the Retail Support
Centre or businesses.
• New ways of working are in place for all Retail Support
Centre staff, to ensure when the office is temporarily closed
to employees, there is little or no impact to staff, given that
all staff have the appropriate resources available to them in
order to work remotely and in an efficient manner.
• The business is geographically dispersed across a large
number of sites across the UK, covering a variety of brands
(with Wi-Fi) and could be utilised as an alternative base
for staff.
• Contingency plans are in place to review and respond to
enforced Government actions and/or severe business
disruption or trading restrictions.
• The Group, and in particular the Safety and Security Team,
is able to adapt quickly and respond to a change in operational
and functional processes, as a result of a pandemic and/or
business closures.
Risk Stable
Mitchells & Butlers plc Annual Report and Accounts 2025
59
Governance Financial Statements Other Information
Compliance statements
Corporate viability disclosure
In accordance with Provision 31 of the 2018 UK
Corporate Governance Code, the Directors have
undertaken an assessment, including sensitivity
analysis, of the prospects of the Group for a
period of three years to September 2028.
Assessment period
Three years continues to be adopted as an
appropriate period of assessment as it aligns with
the Group’s planning horizon in a fast moving
market subject to changing consumer tastes
against a backdrop of economic and political
uncertainties. This is supported by three year
forecasts as approved by the Board. Beyond this
period, performance will be impacted by domestic
and global political, macroeconomic and other
considerations which become increasingly
difficult to predict.
Assessment of prospects
The Group’s financial planning process comprises
a detailed forecast for the next financial year,
together with a projection for the following two
financial years. The Directors’ assessment of
longer-term prospects has been made taking
account of the current and expected future
financial position and the principal risks and
uncertainties, as detailed on pages 52 to 59 of
the Annual Report.
The Group’s financial strategy seeks to provide
a strong capital base and long-term direction
to protect the viability of the business model
given prevailing and evolving market and
economic conditions.
The main trading risks facing the business relate
to uncertainty surrounding the political and
economic environment on both a domestic and
global basis manifest as variability in consumer
demand, cost headwinds and potential supply
chain disruption. The Directors are also cognisant
of broader risks, notably the threat of disruption
either to the Group’s processes and systems, or
those of a key supplier or partner, potentially from
attack by a third-party agent. Longer term, further
risk is identified around evolving consumer
demands and tastes.
Key factors also considered in the assessment of
the Group’s prospects are a strong market position
built on a diverse range of brands and offers
trading from a well-positioned and largely freehold
estate, supported by capital investment focused
on development and premiumisation of offers,
an appropriate remodel cycle and maintenance
and protection of current infrastructure. These are
all anticipated to contribute to outperformance
against the wider market.
Assessment of viability
As set out in the note to the Accounts on Going
Concern, the principal funding arrangements of
the Group consist of just over £1bn of long-term
securitised debt which (unless or until refinanced)
amortises on a scheduled profile to 2036.
Securitisation covenants are tested quarterly,
both on an annual and a half year basis. In addition
the Group has an unsecured committed facility for
£150m, with financial covenants tested half yearly,
and which expires within the three year term of
this assessment, in July 2028. The unsecured
facility is currently undrawn.
Building on a very strong recovery in profits
in FY 2024 (marking a return to normalisation
following the pandemic and high levels of global
cost inflation) the Group has continued to grow
profits this year built on strong sales growth,
outperforming the sector. The principal short-term
risks now facing the business are now assessed to
be around continuing this sales outperformance,
against an uncertain consumer backdrop, whilst
mitigating further cost inflation, notably in wages
and food input costs. The Group has reviewed
a number of forecast scenarios and sensitivities
around these risks, including additional stress
testing that has been carried out on the Group’s
ability to continue in operation under unfavourable
operating conditions. In making this assessment
the Group has taken the view that there will be
no material further adverse impact of Covid-19
(or any other pandemic) or major system or supply
chain disruption. Through the assessment period,
the Group is forecasting sales growth consistent
with current levels and that overall cost inflation,
driven particularly by wages, will increase at
approximately 6% of the Group’s cost base for
FY 2026 before falling back towards a more
normalised 4% thereafter. Energy markets are
anticipated to remain stable.
The Group’s three year plan takes account of
these risks, in addition to the prevailing economic
outlook and capital allocation decisions, alongside
limited mitigating activity such as improved
operational efficiencies (notably stock and labour
management and energy saving initiatives) to
manage costs. In the base case scenario the
Group remains within solvency covenant limits
and has access to sufficient liquidity to meet its
outgoings. It is noted that there may be a
requirement to refinance the unsecured facilities
during the assessment period, in July 2028,
although it remains undrawn in the base case
scenario. It is noted that there are drawings
towards the end of the review period under the
downside scenario but still comfortably within
facility limits. It is considered that this can be
accommodated within the debt capacity of the
business given future anticipated profitability
and the strength of the creditor relationships
exhibited in previous refinancing exercises.
The resilience of this base case plan is then
assessed through the application of forecast
analysis, focused in particular on growth of
demand and levels of input cost inflation during
the current financial year as well as on a
longer-term basis. Sensitivities of the following
risks described in the Annual Report have also
been applied individually to the base plan:
• Declining Sales Performance (Risk event 1):
2.5% lower sales growth rate on average
through FY 2026 to end of H1 FY 2027 and 1%
lower thereafter;
• Cost of Goods Price Increases (Risk event 2):
3% increase in direct Cost of Goods (2% Drink
and 4% Food) in FY 2026, and 1% in FY 2027
and FY 2028;
• Increased Wage Cost Inflation (Risk event 7):
1% from April FY 2026, and a further 1% in
each of FY 2027 and FY 2028;
• Increased utilities cost (Risk event 2):
additional £10m in each of FY 2026 and
FY 2027 and £5m in FY 2028;
• Increased business rates cost (Risk event 2):
additional £3m in FY 2026, £5m in each of
FY 2027 and FY 2028; and
• A scenario combining all of the above sensitivities,
with some limited mitigating activities.
Liquidity and solvency based on financial covenants
(Risk event 8) on both secured debt and unsecured
facilities are assessed in all scenarios. In all scenarios,
notably the combined scenario, the Group continues
to remain profitable with sufficient liquidity and
no forecast covenant breaches.
Viability statement
The Directors have concluded, based upon the
extent of the financial planning assessment,
sensitivity analysis, potential mitigating actions
and current financial position that there is a
reasonable expectation that the Group will have
access to sufficient resources to continue in
operation and meet all its liabilities as they fall due
over the three year period to September 2028.
Non-financial and sustainability
information statement
The Group has complied with the requirements
of Section 414CB of the Companies Act 2006 by
including certain non-financial information within
the report. This can be found as follows:
• Business model on pages 32 to 35.
• Information regarding the following matters
can be found on the following pages:
– Environmental matters on pages 44 and 45;
– Employees on page 37;
– Social matters on pages 36 to 39;
– Respect for human rights on pages 76 and
91; and
– Anti-corruption and anti-bribery matters
on page 91.
Annual Report and Accounts 2025 Mitchells & Butlers plc60
Introduction
Strategic Report
Where principal risks have been identified in relation
to any of the matters listed above, these can be
found on pages 52 to 59 including a description of
the business relationships, products and services
which are likely to cause adverse impacts in those
areas of risk, and a description of how the
principal risks are managed.
• All key performance indicators of the Group,
including those non-financial indicators, are
on pages 42 and 43.
• The Financial review section on pages 62 to 64
includes, where appropriate, references to,
and additional explanations of, amounts
included in the accounts.
Section 172 Companies Act statement
The Directors have acted in a way that they
considered, in good faith, to be most likely to
promote the success of the Company for the
benefit of its members as a whole and in doing
so have given regard, amongst other matters,
to the following considerations in the decisions
taken during the financial period ended
27 September 2025:
• the likely consequences of any decision in the
long term;
• the interests of the Company’s employees;
• the need to foster the Company’s business
relationships with suppliers, guests and
others;
• the impact of the Company’s operations on
the community and environment;
• the desirability for high standards of business
conduct; and
• the need to act fairly as between members of
the Company.
The Board has a duty under Section 172
Companies Act 2006 to promote the success of
the Company and, in doing so, must take account
of the effect on other stakeholders of how it
manages the business of the Company, whether
these stakeholders are from within the Company,
in its Group or outside the Company and its
Group. Throughout the year the Board has kept
in mind these responsibilities as it has supervised
and monitored the business activities and prospects
of the Company and as it has considered, and,
where appropriate, made decisions relating to
strategic aspects of the Company’s affairs.
In addition, the 2018 UK Corporate Governance
Code specifically requires that the Board should
understand the views of the Company’s key
stakeholders (including employees, suppliers,
customers and others) and keep stakeholder
engagement mechanisms under review so they
remain effective. The 2018 Code also recommends
that there should be regular reporting as to how
the Board has complied with this engagement
approach in its decision-making processes and
how the interests of different shareholders have
been considered.
In carrying out these functions, the Board had
regard to those stakeholders which it had
identified as being of significant importance.
These are the Company’s shareholders, those
employees of the Mitchells & Butlers Group who
were likely to be affected by the activities of the
Company (including their job security and
entitlements in terms of pay, pensions and other
benefits), guests who purchase goods and services
provided by the Company, suppliers to the
Company, whether they are external to the Mitchells
& Butlers Group or within that Group, governmental
authorities such as HMRC and regulatory bodies,
the Trustees of the Group’s pension schemes,
providers of finance to the Group including its
banks and bondholders, real estate property
counterparties (whether as landlords or tenants) and
those specific entities or individuals who are likely to
be affected by the outcome of the relevant matter
falling for consideration on a case-by-case basis.
There is a robust and transparent process in place
to provide an appropriate level of direction and
support in the identification, assessment and
management of risks across all areas of the
business which have the potential to seriously
damage our financial position, our shareholder
value, our responsibilities to our staff and guests,
our reputation and our relationships with key
stakeholders. Established communication cascade
and mechanisms are in place for employees,
suppliers and guests: engagement with employees
is discussed on page 75 of the Directors’ report,
which sets out the various platforms for employee
communications, facilitated by Dave Coplin, a
Non-Executive Director who acts as the ‘employee
voice’; engagement with key, critical suppliers
is addressed on page 83 of the Corporate
Governance Statement which describes the
supplier tiering process; and engagement with
guests is discussed on page 110 of the Report on
Directors’ remuneration which describes the
mechanisms for providing guest feedback.
The Company’s culture is embodied in a set of
PRIDE values of Passion, Respect, Innovation,
Drive and Engagement which underpin its key
priorities of People, Practices, Profits and Guests.
The Board observes these PRIDE values in
discharging its everyday responsibilities in order
to ensure that decisions taken are in line with the
Company’s values and objectives. High standards
of business conduct are expected, in furtherance
of which the Board has implemented a Code of
Ethics, which is fully described on page 91 of the
Corporate Governance Statement, and a
declaration of compliance with the Modern
Slavery Act 2015 (including a Supplier Code of
Conduct) is dealt with on pages 76 and 77 of the
Directors’ report. Appropriate scrutiny of the
environmental impact of the Group’s activities
is included in the Sustainability section of the
Strategic Report on pages 44 and 45.
Not all of those stakeholders’ interests fall for
consideration in each set of circumstances which the
Board has to consider. However, as and when a
particular matter falls for review by the Board, it first
seeks to identify those stakeholders which are likely
to be impacted by the decision of the Board, and then
the Board discusses the respective interests of those
stakeholders as well as the consistency (or otherwise)
of the relevant proposal with the Board’s existing,
or any proposed change(s) to its, strategic plan.
Major matters considered by the Board during
the period included consideration of the UK
hospitality market as a whole; the macro-
economic environment; the UK labour market;
Executive Committee succession planning;
infrastructure transformations; unsecured debt
facility refinancing; and an ongoing review of
estate safety risks. In considering these matters,
the Board looked not only at the position and
prospects of the Company, but also took into
consideration the wider Mitchells & Butlers
Group as a whole.
Having identified the relevant stakeholders and their
interests in relation to specific matters or particular
circumstances, the Board then assessed the relevant
weighting of those interests in considering and
eventually reaching its conclusions, whilst being
mindful of the need to comply with the Group’s
obligations of its securitisation arrangements and
other financial arrangements.
In reaching its decisions, the Board was mindful of
the need to seek to preserve the integrity of the
Company’s business so as to allocate its resources
in such a way as to ensure creditors’ interests and
the interests of other stakeholders such as
employees and guests were not prejudiced.
Board papers set out the rationale for the
proposals and the relevant decisions were made
after discussion amongst the Board members
with appropriate legal, accounting, HR and
treasury input. The processes implemented by
the Board included regular meetings to consider
key developments as well as the provision of
training, if requested by a Director, in relation
to their responsibilities as directors of a limited
company, including the responsibilities under
Section 172 Companies Act 2006.
Specific consideration was given in the decision-
making processes implemented by the Board to
how the manner in which the Company operated,
and the specific proposals it was asked to consider,
aligned to its strategic goals as described on
pages 40 and 41 and its agreed purpose as
referred to on page 07.
The Board also confirmed that, in discharging its
responsibilities for management, supervision and
control of the Company’s business and its affairs,
it would seek to align to the Mitchells & Butlers
Group PRIDE Values of Passion, Respect, Innovation,
Drive and Engagement as set out on page 33 of
this Annual Report.
Throughout this Annual Report we provide
examples of how we take these considerations
into account. The Board values the importance of
effective stakeholder engagement and believes
that stakeholders’ views should be considered in
its decision-making. Details of how we engage
with various stakeholders can be found on pages
36 to 39.
Mitchells & Butlers plc Annual Report and Accounts 2025
61
Governance Financial Statements Other Information
The Group Income Statement discloses adjusted profit and earnings per share information that excludes separately disclosed items, determined by virtue
of their size or nature, to allow a more effective comparison of the Group’s trading performance from one period to the next.
Statutory Adjusted
a
FY 2025
£m
FY 2024
£m
FY 2025
£m
FY 2024
£m
Revenue 2,711 2,610 2,711 2,610
Operating profit 322 300 330 312
Profit before tax 238 199 246 211
Earnings per share 29.7p 25.0p 30.9p 26.4p
Operating margin 11.9% 11.5% 12.2% 12.0%
At the end of the period, the total estate comprised 1,718 sites in the UK and Germany of which 1,631 are directly managed.
Revenue
Total revenue of £2,711m (FY 2024 £2,610m) reflects a strong period of trading driven by sustained like-for-like sales
a
growth.
Like-for-like sales
a
in the first half increased by 4.3%, comprising an increase in like-for-like food sales
a
of 3.8% and of like-for-like drink sales
a
of 4.3% driven by
strengthening spend per head. Over the second half like-for-like sales
a
grew by 4.2% and remained consistently ahead of the market
b
. Volumes of both food
and drink were broadly flat across the year. Other trading revenue lines (primarily from accommodation and machines) grew at a slightly greater rate than food
and drink in the year.
The current underlying rate of growth of like-for-like sales
a
, as measured over the first eight weeks of the new financial period, is 3.8%.
Like-for-like sales
a
:
Weeks 1–15
Q1
Weeks 16–28
Q2
Weeks 29–42
Q3
Weeks 43–52
Q4
Weeks 1–52
YTD
Food 4.0% 3.6% 4.9% 3.4% 4.0%
Drink 3.6% 5.1% 4.8% 2.3% 4.0%
Total 3.9% 4.7% 5.0% 3.2% 4.3%
Total sales grew by 3.9% against last financial year.
Financial review
Our financial and operating performance
“On a statutory basis, profit
before tax for the financial
year was £238m (FY 2024
£199m), on sales of £2,711m
(FY 2024 £2,610m).”
Tim Jones
Chief Financial Officer
Annual Report and Accounts 2025 Mitchells & Butlers plc62
Introduction
Strategic Report
Separately disclosed items
Separately disclosed items are identified due to
their nature or materiality to help the reader form
a view of overall and adjusted trading.
Revaluation and impairment assessment has
resulted in a £94m increase in the value of
property, plant and equipment (as set out in
Section 3 of the notes to the consolidated financial
statements). Within this a net £6m increase is
separately disclosed in the income statement
comprising an £11m increase arising from the
revaluation of freehold and long leasehold sites,
less a £5m impairment of short leasehold and
unlicensed properties. Further impairment of £9m
is separately disclosed relating to right-of-use
assets and goodwill.
Other separately disclosed items include a £3m
charge in relation to the amendment of past
service costs of defined benefit obligations,
an increase of £3m (on remeasurement) of the
contingent consideration relating to the acquisition
of Pesto and net profit arising on property
disposals of £1m. Refer to Section 2.2 of the notes
to the consolidated financial statements for
comparative information.
Interest
Net finance costs of £91m (FY 2024 £99m) for
the financial year were £8m lower than the same
period last year. The net pensions finance credit
of £7m reflects the recognition of the net surplus
funding position (FY 2024 charge of £2m).
Earnings per share
Basic earnings per share, after the separately
disclosed items described above, were 29.7p
(FY 2024 earnings 25.0p), with adjusted earnings
per share
a
of 30.9p (FY 2024 26.4p).
The basic weighted average number of shares in
the period was 595m and the total number of
shares issued at the balance sheet date was 599m.
Cash flow
FY 2025
£m
FY 2024
£m
EBITDA before movements in the valuation of the property portfolio 460 444
Non-cash share-based payment and pension costs and other 15 10
Utilisation of pension surplus for DC contributions 9 –
Operating cash flow before movements in working capital and additional pension contributions 484 454
Working capital movement (15) 15
Pension escrow return 12 35
Pension payments (1) (1)
Cash flow from operations 480 503
Capital expenditure (181) (154)
Acquisition of Pesto Restaurants Limited – (2)
Net finance lease principal payments (39) (40)
Interest on lease liabilities (14) (17)
Net interest paid (73) (82)
Tax (24) (18)
Purchase of own shares (5) (7)
Other 2 2
Net cash flow before bond amortisation 146 185
Mandatory bond amortisation (130) (123)
Net cash flow 16 62
EBITDA, before movements in the valuation of the property portfolio, increased largely as a result of the improved trading performance to £460m. Net cash
inflow for the period before bond amortisation of £146m (FY 2024 £185m) benefitted from a final pension escrow return of £12m in addition to £9m utilisation
of pension surplus towards ongoing DC contributions plus a further £3m utilisation against death in service benefits and AVCs in respect of prior year bonus
payments. Working capital flows reversed to an outflow of £15m, on timing differences, and capital expenditure increased to £181m with acceleration of the
investment programme based on strong returns.
After all outgoings, including mandatory bond amortisation of £130m (including the net impact of currency swaps), cash inflow was £16m (FY 2024 £62m).
Operating profit and margins
a
Adjusted operating profit
a
was £330m (FY 2024
£312m), an increase of 5.8% on a 52-week basis.
Adjusted operating margin of 12.2% was 0.2ppts
higher than last year with strong like-for-like sales
a
growth and operating efficiencies offsetting cost
headwinds. Statutory operating profit was £322m
(FY 2024 £300m) with a statutory operating profit
margin of 11.9% (FY 2024 11.5%).
The aggregate cost headwind for the financial
year of £100m represented c. 5% of our cost base
of c. £2.0 billion, driven primarily by labour costs
including increases to the statutory National
Living Wage and a second half increase in
employer national insurance contributions.
Looking forward to FY 2026, we anticipate an
increase in the level of cost inflation, to c. £130m,
representing slightly less than 6% of our cost base
before mitigation. The increase is driven by the
annualisation of labour cost increases, plus
further increases in statutory thresholds and high
increases in food costs, notably meat. This
includes our preliminary assessment of the impact
of the Chancellor’s recent Autumn Budget,
pending clarification of further detail.
Mitchells & Butlers plc Annual Report and Accounts 2025
63
Governance Financial Statements Other Information
Financial review continued
Capital expenditure
Capital expenditure of £181m (FY 2024 £154m, including £2m intangible assets) comprises £169m from the purchase of property, plant and equipment and
£12m in relation to the purchase of intangible assets.
FY 2025 FY 2024
£m Number £m Number
Maintenance and infrastructure 65 58
Remodels – refurbishment 91 193 69 170
Remodels – expansionary 2 6 2 8
Conversions 14 13 10 11
Acquisitions – freehold 5 2 12 4
Acquisitions – leasehold 4 2 3 2
Total return generating capital expenditure 116 216 96 195
Total capital expenditure 181 154
a. The Directors use a number of alternative
performance measures (APMs) that are considered
critical to aid the understanding of the Group’s
performance. Key measures are explained on pages
189 to 191 of this report.
Maintenance and infrastructure spend included
investment of £10m towards our sustainability
ambitions, such as solar panels and remote
equipment control technology. Digital and
technology investment increased to £16m (FY 2024
£6m) due to upgrade and replacement of in-house
devices and network and hosting equipment.
During the period we have made good progress on
increasing the number of completed investment
projects, and we remain committed to resumption
of an average seven-year refurbishment cycle
across our estate, justified by the strong returns we
are generating in this area of c. 35% on remodels.
To that end, we expect capital expenditure to
increase further in FY 2026, to c. £210m, with
additional potential for new site acquisitions.
Pensions
In the prior period the Trustees of the Mitchells &
Butlers Executive Pension Plan (MABEPP)
completed a full scheme buy-out of the liabilities
of the plan. Subsequent to that, and in the current
period, the scheme has been wound up with all
escrow monies repaid and a surplus cash balance
of £3m transferring to the Mitchells & Butlers
Pension Plan (MABPP).
The Trustees of MABPP have resolved that any
surplus arising in that plan can be used to pay
for the employer contributions to the defined
contribution section of MABPP. During the
period, the MABPP surplus has funded the
settlement of £12m of the Company’s employer
contributions, AVC’s in respect of prior year
bonus payments and death in service benefits.
One further scheme remains. This is closed and
unfunded and has estimated liabilities of £22m,
before tax.
Net debt and facilities
Net debt
a
at the period end reduced to £1,277m,
comprised of £843m non-lease liabilities and
lease liabilities of £434m (FY 2024 £1,436m
comprised of £989m non-lease liabilities and
lease liabilities of £447m). This represents a
multiple of 2.7 times EBITDA over the last year
including lease liabilities (1.8 times excluding
these liabilities).
Further details of existing debt arrangements and
an analysis of net debt can be found in Section 4
of the notes to the consolidated financial
statements and at https://www.mbplc.com/
infocentre/debtinformation/.
Going Concern
After considering forecasts, sensitivities and
mitigating actions available to management and
having regard to risks and uncertainties, the
Directors have a reasonable expectation that the
Group has adequate resources to continue to
operate within its borrowing facilities and covenants
for a period of at least 12 months from the date of
signing the financial statements. Accordingly, the
financial statements have been prepared on
the going concern basis. Full details are included
in Section 1 of the notes to the consolidated
financial statements.
Approval of the Strategic Report
Our strategic report on pages 24 to 64 has been
reviewed and approved by the Board.
Tim Jones
Chief Financial Officer
27 November 2025
Annual Report and Accounts 2025 Mitchells & Butlers plc64
Introduction
Strategic Report
Governance
Outlines how the Group monitors
its actions, policies, practices and
decisions as well as the effect of those
actions on its stakeholders.
In this section
66 Governance at a glance
68 Chair’s introduction to governance
70 Board of Directors
72 Directors’ report
80 Statement of Directors’ responsibilities in
respect of the Annual Report and Accounts
81 Corporate governance statement
94 Audit Committee report
98 Report on Directors’ remuneration
Mitchells & Butlers plc Annual Report and Accounts 2025
65
Financial Statements Other InformationGovernance
Governance at a glance
Highest ever retail engagement score
(beating FY 2024’s record high)
87.7
See page 99
Board and Committee meeting attendance
The Board holds regular scheduled meetings
during the year and on an ad-hoc basis as and
when required. During the year eight Board
meetings were held and the attendance is set out
below. Members of the executive team attended
Board meetings as and when appropriate.
Gender pay gap (for the Group)
5.4%
Mean
1.7%
Median
See page 114
The Board believes that good corporate governance is essential
to enable us to deliver our purpose for all our stakeholders.
It remains a top priority for the Board.
The Company is committed to the principles of the 2018 Corporate
Governance Code published by the Financial Reporting Council,
which sets out standards of good practice for listed companies.
Growth
• Support and oversight of the growth of the
business via our Ignite programme, to drive
cost efficiencies and increase sales; and
• Systematically enhance the amenity
of our estate through our established
capital programme.
See pages 40 and 41
Strategy
• Deliver our strategic plan creating
long-term value.
See page 26
Sustainability
• Continue to deliver emissions reduction
in line with our Net Zero roadmap;
• Increase proportion of waste diverted
from landfill;
• Decrease levels of food waste; and
• Expand charitable partnerships.
See page 28
People
• Embedding of the talent management
system which will further support
the development of our internal
talent pipeline;
• Manage the impact of the introduction
of the Employment Rights Bill;
• Implementation of a replacement HR
and Payroll system; and
• Continued work on our DEI initiatives
including employee affinity groups on
ethnicity, neurodiversity and gender.
See page 28
Risk
• Reduce the impact of key risks facing
the business.
See pages 52 to 59
Governance highlights Focus areas for FY 2026
Attendance levels at Board and Committee meetings
Directors who served during the year Board
Audit
Committee
Remuneration
Committee
Nomination
Committee
Bob Ivell 8 (8) n/a 4 (4) 1 (1)
Keith Browne 8 (8) n/a n/a n/a
Amanda Brown 8 (8) 4 (4) 4 (4) 1 (1)
Dave Coplin 8 (8) 4 (4) 4 (4) 1 (1)
Eddie Irwin 5 (8) n/a n/a 1 (1)
Tim Jones 8 (8) n/a n/a n/a
Josh Levy 8 (8) n/a 4 (4) n/a
Jane Moriarty 8 (8) 4 (4) 4 (4) 1 (1)
Phil Urban 8 (8) n/a n/a n/a
The numbers in brackets in the table above confirm how many meetings each Director was eligible to attend during
the year.
Annual Report and Accounts 2025 Mitchells & Butlers plc66
Strategic Report
Introduction
Governance
Chair
Bob Ivell
The Chair is accountable to
shareholders for leading the
Board and ensuring the Board
receives timely, accurate
information to take good
decisions for the benefit of
all stakeholders.
Board and Committee structure
Senior
Independent
Director
Jane Moriarty
The Senior Independent Director
supports the Chair on all governance
issues and provides a communication
channel between the Chair and the
Non-Executive Directors.
Non-Executive
Directors
The Non-Executive Directors
support and constructively
challenge the executive team.
Audit
Committee
Chair – Jane Moriarty
See pages 94 to 97
Remuneration
Committee
Chair – Amanda Brown
See pages 98 to 118
Nomination
Committee
Chair – Bob Ivell
See page 89
Market Disclosure
Committee
Chair – Bob Ivell
See page 89
The Board
The Board has delegated the day-to-day running of the Group to the Chief
Executive Officer. The Executive Directors make and implement operational
decisions to run the Mitchells & Butlers business on a day-to-day basis. To support
the Chief Executive Officer in discharging his responsibilities, he is supported by
the Executive Committee.
The Executive Committee is responsible for ensuring that each of the Group’s
businesses and functions are managed effectively and that the key performance
indicators of the Group, as approved by the Board, are achieved. The Executive
Committee, chaired by the CEO, ensures the execution of the Company’s strategy
and the day-to-day management of the business. Certain other responsibilities
have been delegated to specialist committees and further details are given on
pages 89 and 90.
Board tenure for Chair and Non-Executive Directors
The UK Corporate Governance Code states that the Chair should not remain in post
beyond nine years from the date of their first appointment to the Board and that
circumstances which are likely to impair, or could appear to impair, a Non-Executive
Director’s independence include service on the Board for more than nine years from
the date of their first appointment. Of the Non-Executive Directors and Chair, two
Directors currently have less than nine years’ Board service.
Committees
Executive Directors
Phil Urban
(CEO)
Tim Jones
(CFO)
Mitchells & Butlers plc Annual Report and Accounts 2025
67
Financial Statements Other Information
As at 27 September 2025, the Company had more
than 50,000 employees and one of the key roles
for the Board is to provide leadership for them and
maintain the highest possible standards of
corporate governance.
A new Corporate Governance Code was
published in 2024, the main provisions of which
will apply to financial years beginning on or after
1 January 2025, except for Provision 29 (relating
to the monitoring of the Company’s risk
management and internal control framework),
which will apply to the Company’s financial year
ending September 2027. In the meantime the
Company is required to report under the 2018 UK
Corporate Governance Code (the ‘2018 Code’).
The 2018 Code places emphasis on relationships
between companies, shareholders and stakeholders.
It also promotes the importance of establishing a
corporate culture that is aligned with the Company’s
purpose and business strategy, promotes integrity
and values diversity and sets the expectations for
reporting the Board’s involvement in these areas.
Some of these aspects of the 2018 Code are
reflected in the Strategic Report on pages 24 to
64, which sets out the Group’s strategy, progress
and performance for the year. Meanwhile, the
Board-focused corporate governance aspects
of the 2018 Code are reflected in the Corporate
Governance Statement on pages 81 to 93,
which sets out the Company’s compliance against
published governance requirements where
there is a narrative explanation as to how the
Board has approached compliance with, or in a
few limited areas divergence from, the Code’s
best practice guidance.
Chair’s introduction
to governance
“Dear fellow shareholders,
I have pleasure in updating
you on our progress in
corporate governance over
the past year.”
Bob Ivell
Chair
Annual Report and Accounts 2025 Mitchells & Butlers plc68
Strategic Report
Introduction
Governance
Climate change reporting requirements continue
to occupy the Board and details are included in
that section of the Strategic Report on pages 46
to 51. Phil Urban heads our climate change policy
initiatives, and while this area remains a
responsibility of the entire Board, the Corporate
Responsibility Committee manages and monitors
the detail of the Group’s approach to this
important topic. The Board oversight of
climate-related risks and opportunities is set out
on page 47 in our climate-related disclosures.
We were pleased to be able to report another
successful year where we outperformed the
market, delivering strong sales and operating
profit growth, despite the impact of the increase
in employers’ National Insurance.
Supporting this performance was the strength of
performance against key metrics with the lowest
team turnover the Company has ever seen and
the highest team engagement scores. So, we have
delivered another year of progress and we feel
we have maintained our momentum. We have
outperformed the market on sales growth for nine
straight years, and our metrics on people and
investment are the best ever. In Ignite, we have
a very special way of working that ensures we
never become complacent and that we seek out
constant improvement. Allied to this we have the
best brands in the industry, a fantastic portfolio of
largely freehold properties, and our balance sheet
is becoming stronger and stronger. Our focus
remains on delivering sales growth and efficiency
gains to deliver continued profit growth in the
year ahead.
Our broad range of Board talent covers a variety
of professional skills, and our diverse group of
Non-Executive Directors continue to bring much
experience and challenge to the Board.
My focus will continue to be on maintaining a
strong team, with a broad range of professional
backgrounds, experience from both within our
sector and in other industries and businesses and
communication skills to drive further improvements
where possible. From a governance standpoint,
the basic governance arrangements already in
place are unchanged since FY 2022, with the
exception of additional procedures and reporting
arrangements put in place in order to comply with
climate change and diversity reporting requirements.
Certain aspects of the 2018 Code could not be,
and were not, complied with in FY 2025. These
deviations from the 2018 Code are fully explained
on pages 85 and 86 in the Corporate Governance
Statement in line with the ‘Comply or Explain’
regime which forms an intrinsic part of that
2018 Code.
The 2018 Code states that there should be a
formal and rigorous annual evaluation of the
performance of the Board, its committees, the
chair and individual directors and that the chair
should consider having a regular externally
facilitated Board evaluation. In FTSE 350
companies this should happen at least every three
years and an externally facilitated review of the
Board’s effectiveness last took place in 2018.
Subsequently, the Board decided that the
interests of shareholders would be better served
by the Board focusing on the business and
consequently no external evaluation has taken
place since. The Board will review this approach
as and when it feels it necessary to do so in the
context of the circumstances in which the Group
is operating. Although there was no formal
evaluation carried out during the year, I remain
satisfied that the skills, contributions and
experience of the Board are appropriate for the
challenges faced by the Group during the year
and for the future. You can read the Board
biographies on pages 70 and 71.
All Listing Rule references in this Annual Report
derive from the UK Listing Rules which came into
effect on 29 July 2024. The remainder of this
Corporate Governance Statement contains the
narrative reporting required by the 2018 Code,
the UK Listing Rules and the Disclosure Guidance
and Transparency Rules. I hope that you find
this Corporate Governance Statement to be
informative and helpful in relation to this
important topic.
We are committed to maintaining an active
dialogue with all our shareholders, and we
continue to offer our institutional investors access
to key senior management and our Investor
Relations team. The Chair of each of our Audit
Committee and Remuneration Committee and
the Senior Independent Director are available for
dialogue with shareholders on any significant
matters in relation to their areas of responsibility
if this is needed and you can read their reports on
pages 94 and 98 respectively.
The Annual General Meeting will be held in
January 2026 and all shareholders are welcome to
attend. For those shareholders who cannot attend
but would like to hear the proceedings, we will
also supply a telephone listen-only facility. Full
details are set out in the separate Notice of AGM
published with this Annual Report.
I look forward to the year ahead, confident in the
knowledge that the Company is led by a highly
competent, professional and motivated team.
I also look forward to the support of you, our
shareholders, as our senior management team
continues to focus on driving future profit growth
and creating additional shareholder value.
Bob Ivell
Chair
Mitchells & Butlers plc
For the Company’s latest financial information
Go to www.mbplc.com/investors
Mitchells & Butlers plc Annual Report and Accounts 2025
69
Financial Statements Other Information
Board of Directors
A strong leadership team
Phil joined Mitchells & Butlers in January 2015
as Chief Operating Officer and became Chief
Executive in September 2015. Phil was previously
Managing Director at Grosvenor Casinos, a
division of Rank Group and Chair of the National
Casino Forum. Prior to that, he was Managing
Director for Whitbread’s Pub Restaurant Division,
and for Scottish & Newcastle Retail’s Restaurants
and Accommodation Division. Phil has an MBA
and is a qualified management accountant (‘CIMA’).
Tim was appointed Chief Financial Officer in
October 2010. Prior to joining the Company,
he held the position of Group Finance Director
for Interserve plc, a support services group.
Previously, he was Director of Financial Operations
at Novar plc and held senior financial roles both
in the UK and overseas in the logistics company,
Exel plc. He was previously Non-Executive
Director and Chairman of the Audit and Risk
Committee of Poundland PLC. Tim obtained
an MA in Economics at Cambridge University.
Tim will retire from the Board of Directors and
the Company in the Summer of 2026 following
a full handover.
Appointed to the Board in May 2011, Bob has
over 50 years of extensive food and beverage
experience with a particular focus on food-led,
managed restaurants, pubs and hotels. He is
currently a board member of UK Hospitality and
was previously Senior Independent Director of
AGA Rangemaster Group plc and Britvic plc, and
a main board Director of S&N plc as Chair and
Managing Director of its Scottish & Newcastle
retail division. He has also been Chair of
Carpetright plc, Regent Inns, Park Resorts and
David Lloyd Leisure Limited, and was Managing
Director of Beefeater Restaurants, one of
Whitbread’s pub restaurant brands, and a
Director of The Restaurant Group. Bob is Chair
of the Nomination Committee, the Pensions
Committee, the Market Disclosure Committee
and the Corporate Responsibility Committee.
Key to Committee membership
A
Audit Committee
R
Remuneration Committee
N
Nomination Committee
M
Market Disclosure Committee
E
Executive Committee
C
Corporate Responsibility Committee
P
Pensions Committee
The Board brings together a
diverse range of professional
experience and industry
backgrounds.
Bob Ivell
Non-Executive Chair
R
N
M
C
P
Phil Urban
Chief Executive
M
E
P
Tim Jones
Chief Financial Officer
M
E
P
Annual Report and Accounts 2025 Mitchells & Butlers plc70
Strategic Report
Introduction
Governance
Appointed as an independent Non-Executive
Director in February 2016, Dave is the Chief
Executive Officer and founder of The Envisioners
Limited. He was formerly the Chief Envisioning
Officer for Microsoft Limited, and is an
established thought leader on the role of
technology in our personal and professional lives.
For over 30 years he has worked across a range of
industries and customer marketplaces, providing
strategic advice and guidance around the role and
optimisation of technology in modern society,
both inside and outside of the world of work.
Dave is also a Non-Executive Director of both
Pensions UK and Vianet Group plc.
Appointed as a Non-Executive Director in
March 2012, Eddie is a nominated shareholder
representative of Elpida Group Limited which,
as part of the Odyzean Group, is a significant
shareholder in Mitchells & Butlers. Eddie is
Finance Director of Coolmore, a leading
thoroughbred bloodstock breeder with
operations in Ireland, the USA and Australia.
He graduated from University College Dublin
with a Bachelor of Commerce Degree and he is
a Fellow of both The Association of Chartered
Certified Accountants and The Chartered
Governance Institute.
Appointed as a Non-Executive Director in
September 2016, Keith is a nominated
shareholder representative of Elpida Group
Limited, which, as part of the Odyzean Group,
is a significant shareholder in Mitchells & Butlers.
Keith obtained a Bachelor of Commerce Degree
from University College Dublin, qualified as a
chartered accountant in 1994 and subsequently
gained an MBA from University College Dublin.
After joining KPMG Corporate Finance in 1996,
he became a partner in the firm in 2001 and Head
of Corporate Finance in 2009. He retired from the
partnership to operate as an Independent
Consultant in 2011.
Appointed as an independent Non-Executive
Director in February 2019, Jane is a Fellow of the
Institute of Chartered Accountants in Ireland, and
currently a Non-Executive Director of Babcock
International Group PLC, Tennants Consolidated
Limited and Nyrstar NV. Jane was previously a
senior advisory partner with KPMG LLP. Jane is
Chair of the Audit Committee.
Amanda joined the Board in July 2022 as an
independent Non-Executive Director. She is
Remuneration Chair of Entain plc and Manchester
Airport Group, and was formerly the Chief
Human Resources Officer of Hiscox Limited, and
was a Non-Executive Director and Chair of the
Remuneration Committee of Micro Focus
International PLC. She previously held senior
executive roles with Whitbread Group PLC,
PepsiCo, Inc and Mars, Inc. Amanda is Chair of
the Remuneration Committee.
Appointed as a Non-Executive Director in
November 2015, Josh is a nominated shareholder
representative of Piedmont Inc., which, as part of
the Odyzean Group, is a significant shareholder in
Mitchells & Butlers. Josh is Co-Chief Executive
Officer of Tavistock Group, and a member of the
Board of Directors and Executive Committee.
He also serves as Chief Executive Officer of
specialist asset-based lender Ultimate Finance
Group and is a Non-Executive Director of the
Australian Agricultural Company, Australia’s
largest integrated cattle and beef producer.
Eddie Irwin
Non-Executive Director
N
C
Josh Levy
Non-Executive Director
R
P
Jane Moriarty
Senior Independent Director
A
R
N
C
M
Keith Browne
Non-Executive Director
P
Amanda Brown
Non-Executive Director
A
R
N
C
Dave Coplin
Non-Executive Director
A
R
N
C
Mitchells & Butlers plc Annual Report and Accounts 2025
71
Financial Statements Other Information
Directors’ report
The Board’s responsibilities in respect
of the Company include:
• Determining the overall business and commercial strategy;
• Identifying the Company’s long-term objectives;
• Reviewing the annual operating budget and financial plans and
monitoring performance in relation to those plans;
• Determining the basis of the allocation of capital; and
• Considering all policy matters relating to the Company’s activities
including any major change of policy.
For FY 2025, the Board is reporting under the 2018 Code. Further
information is set out in the Strategic Report on pages 24 to 64 which
examines the ‘purpose’ aspect of the 2018 Code and in the Corporate
Governance Statement on pages 81 to 93, which describes the
Company’s approach and practices in relation to the 2018 Code.
For the Company’s latest financial information
Go to www.mbplc.com/investors
The Directors present their report on the affairs of the Group and the audited
financial statements for the 52 weeks ended 27 September 2025. The Business
review and Sustainability review of the Company and its subsidiaries are
given on pages 26 to 28 and pages 44 and 45 respectively which, together
with the Corporate Governance Statement and Audit Committee report, are
incorporated by reference into this report and, accordingly, should be read
as part of this report.
Details of the Group’s policy on addressing risks are given on pages 52 to 59,
92 and 93, and details about financial instruments are shown in note 4.3 to
the financial statements. These sections include information about trends
and factors likely to affect the future development and performance of the
Group’s businesses. The Company undertakes no obligation to update
forward-looking statements.
Key performance indicators for the Group’s businesses are set out on pages
42 and 43.
The Company’s Directors pay due regard to the need to foster the Company’s
business relationships with suppliers, guests and others. Details of the
Company’s engagement process with various stakeholders and different
tiers of suppliers, together with the effect of such consideration on the
principal decisions taken by the Company during the financial period, are set
out in the section discussing the Company’s business model on pages 32 to
35 and in the statement made in compliance with Section 172 of the
Companies Act 2006 set out on page 61.
This report has been prepared under current legislation and guidance in
force at the year end date. In addition, the material contained on pages 24
to 64 reflects the Directors’ understanding of the requirement to provide
a Strategic Report.
This report has been prepared for, and only for, the members of the
Company as a body, and no other persons. The Company, its Directors,
employees, agents or advisers do not accept or assume responsibility to any
other person to whom this document is shown or into whose hands it may
come or who becomes aware of it and any such responsibility or liability is
expressly disclaimed.
Areas of operation
During FY 2025, the Group had activities in, and operated through, pubs,
bars and restaurants in the United Kingdom and Germany. A summary of the
performance of the business is set out on page 99.
A full list of the Company’s subsidiaries and their respective country of
operation is given on page 181 of the Annual Report.
Share capital and voting rights
The Company’s issued ordinary share capital as at 27 September 2025
comprised a single class of ordinary shares of which 598,864,399 shares
were in issue and listed on the London Stock Exchange (28 September 2024
598,057,671 shares). The rights and obligations attaching to the ordinary shares
of the Company are contained within the Company’s Articles of Association.
Of the issued share capital, no shares were held in treasury and the Company’s
employee share trusts held 6,084,571 shares. Details of movements in the
issued share capital can be found in note 4.7 to the financial statements on
pa ge 17 7.
Each share carries the right to one vote at general meetings of the Company.
The notice of the Annual General Meeting specifies deadlines for exercising
voting rights in relation to the resolutions to be proposed at the Annual
General Meeting.
All issued shares are fully paid up and carry no additional obligations or
special rights. There are no restrictions on transfers of shares in the Company,
or on the exercise of voting rights attached to them, other than those which
may from time to time be applicable under existing laws and regulations and
under the Articles of Association. In addition, pursuant to the UK Listing
Rules of the Financial Conduct Authority, Directors and certain officers and
employees of the Group require the prior approval of the Company to deal
in the ordinary shares of the Company.
Participants in the Share Incentive Plan (‘SIP’) may complete a Form of
Instruction which is used by Equiniti Share Plan Trustees Limited, the SIP
Trustee, as the basis for voting on their behalf.
During the period, shares with a nominal value of £68,908 were allotted
under all-employee schemes as permitted under Section 549 of the
Companies Act 2006. No securities were issued in connection with a rights
issue during the period.
Annual Report and Accounts 2025 Mitchells & Butlers plc72
Strategic Report
Introduction
Governance
The Company is not aware of any agreements between shareholders that
restrict the transfer of shares or voting rights attached to the shares.
Interests of the Directors and their immediate families in the issued share
capital of the Company as at the year end are shown on page 116 in the
Report on Directors’ remuneration.
Dividends
No Final Dividend will be paid in respect of the financial period ended
27 September 2025 (FY 2024 nil). No Interim Dividend was paid during
the period (FY 2024 nil).
Interests in voting rights
As at 27 September 2025, the Company was aware of the significant
holdings of voting rights (3% or more) in its shares shown in Table 1 below.
Table 1: Interests in voting rights as at 27 September 2025
Shareholder Ordinary shares
% of
share capital
a
Odyzean Limited
b
338,833,695 56.58% Indirect holding
Artemis Investment
Management LLP
36,408,331 6.08% Indirect holding
Lansdowne Partners
(UK) LLP
29,633,363 4.95% Indirect holding
Standard Life Aberdeen plc 29,260,403 4.89% Indirect holding
Standard Life Aberdeen plc
(rights to recall lent shares)
170,000 0.03% Indirect holding
a. Based on the total voting rights figure as at 27 September 2025 of 598,864,399 shares.
b. As the parent company of each of Piedmont Inc., Elpida Group Limited and
Smoothfield Holding Ltd.
Percentages are rounded to two decimal places.
No changes took place between 28 September 2025 and 27 November 2025.
Directors
Details of the Board Directors as at 27 November 2025 and their biographies
are shown on pages 70 and 71. The Directors as at 27 September 2025 and
their interests in shares are shown on page 116.
In relation to the appointment and removal of Directors the Company is
governed by its Articles of Association and the Companies Act 2006 and
related legislation. The powers of the Company’s Directors are set out in the
Company’s Articles of Association.
In accordance with the Company’s Articles of Association (which are in line
with the best practice guidance of the 2018 Code) all the Directors will retire
at the Annual General Meeting and will offer themselves for re-election.
Major shareholder Board representation
and relationship agreement
The Company’s largest shareholder is Odyzean Limited (‘Odyzean’), which
holds approximately 56.58% of the Company’s issued share capital and was
formed in 2021 to consolidate the shareholdings of the Company’s then
three largest shareholders, Piedmont Inc. (‘Piedmont’), Elpida Group Limited
(‘Elpida’) and Smoothfield Holding Limited (‘Smoothfield’) (together with
Odyzean, the ‘Odyzean Group’) in connection with the Open Offer.
The Board is grateful for the significant financial commitment provided
by the Odyzean Group to the business, together with its 1,718 pubs and
restaurants, and over 50,000 UK and German employees. The Company
maintains excellent relations with the Odyzean Group, whose investment
objectives are fully aligned with those of the Group. The Odyzean Group
maintains a dialogue with the Board via their representatives on the Board
nominated by Piedmont and Elpida, all of whom are careful to ensure that
there is no conflict between their roles as representatives of the Company’s
shareholders and their duty to the Company.
The Odyzean Group has representatives on the Board, nominated by
Piedmont and Elpida respectively. Piedmont’s appointment rights are
formalised in the Deed of Appointment referred to in this report but there is
no equivalent agreement in place between the Company and Elpida. The
Elpida representatives were appointed with the approval of the Board in
March 2012 and September 2016. The Board has carefully considered
whether it would be appropriate to enter into a formal agreement with Elpida
that is similar to the existing agreement between the Company and Piedmont.
Having taken into account the Financial Reporting Council’s report of August
2014 ‘Towards Clear & Concise Reporting’ and the views expressed previously
by certain investor representative bodies, the Board considers that such an
agreement would be merely one of form rather than substance and not in the
interests of shareholders generally. As a result, the Board does not propose,
currently, that the Company should enter into such an agreement with
Elpida, and Elpida has not, to date, sought such an agreement.
Under a Deed of Appointment between Piedmont and the Company,
Piedmont has the right to appoint two shareholder Directors to the Board
whilst it owns 22% or more of the issued share capital of the Company, and
the right to appoint one shareholder Director to the Board whilst it owns
more than 16% of the Company but less than 22%. In the event that Piedmont
owns less than 16% of the Company any such shareholder Directors would
be required to resign immediately. This Deed of Appointment also entitles
Piedmont to appoint one Director to sit on the Nomination Committee and to
have a Director attend, and receive all the papers relating to, meetings of the
Remuneration Committee.
The Board confirms that the Company is able to carry on the business it carries
on as its main activity independently from Odyzean.
There is a requirement to disclose the parent and ultimate controlling party of
the Company where this is different. There is no parent or ultimate controlling
party as such of Mitchells & Butlers plc. However, as disclosed in the table of
‘Interests in voting rights’, and the section headed ‘Major shareholder Board
representation and relationship agreement’, both on this page, Odyzean, as
the indirect holder of the separate shareholdings of Piedmont, Elpida and
Smoothfield has disclosed its interest in 56.58% of the shares in the Company.
Odyzean, however, does not directly hold any shares in the Company on its
own behalf.
Mitchells & Butlers plc Annual Report and Accounts 2025
73
Financial Statements Other Information
Directors’ report continued
Directors’ indemnity
As permitted by the Articles of Association, each of the Directors has the
benefit of an indemnity, which is a qualifying third-party indemnity as defined
by Section 234 of the Companies Act 2006. The indemnity was in force
throughout the tenure of each Director during the period, and is currently in
force. The Company also purchased and maintained throughout the period
Directors’ and Officers’ liability insurance in respect of itself and its Directors
and the directors of any subsidiary of the Company. No indemnity is provided
for the Company’s auditor.
Articles of Association
The Articles of Association may be amended by special resolution of the
shareholders of the Company.
Conflicts of interest
The Company’s Articles of Association permit the Board to consider and,
if it sees fit, authorise situations where a Director has an interest that conflicts,
or may possibly conflict, with the interests of the Company (‘Situational
Conflicts’). The Board has a formal system in place for Directors to declare
Situational Conflicts to be considered for authorisation by those Directors
who have no interest in the matter being considered. In deciding whether to
authorise a Situational Conflict, the non-conflicted Directors are required to
act in the way they consider would be most likely to promote the success of
the Company for the benefit of all shareholders, and they may impose limits
or conditions when giving authorisation, or subsequently, if they think this is
appropriate. The Board believes that the systems it has in place for reporting
and considering Situational Conflicts continue to operate effectively.
Related party transactions
Internal controls are in place to ensure that any related party transactions
involving Directors or their connected persons are carried out on an
arm’s-length basis and are properly recorded.
The related party transactions in FY 2025 to which the Group was party are
set out in note 5.2 to the financial statements.
Change of control provisions
There are no significant agreements which contain provisions entitling other
parties to such agreements to exercise termination or other rights in the
event of a change of control of the Company.
There are no provisions in the Directors’ or employees’ service agreements
providing for compensation for loss of office or employment occurring
because of a takeover.
The trustee of the Company’s SIP will invite participants on whose behalf it
holds shares to direct it how to vote in respect of those shares, and, if there is
an offer for the shares or other transaction which would lead to a change of
control of the Company, participants may direct it to accept the offer or agree
to the transaction. The trustee of the Mitchells & Butlers Employee Benefit
Trust may, having consulted with the Company, vote or abstain from voting
in respect of any shares it holds or accept or reject an offer relating to shares
in any way it sees fit, and it may take all or any of the following matters into
account: the long-term interests of beneficiaries; the non-financial interests
of beneficiaries; the interests of beneficiaries in their capacity as employees
or former employees; the interests of future beneficiaries; and considerations
of a local, moral, ethical, environmental or social nature.
The rules of certain of the Company’s share plans include provisions which
apply in the event of a takeover or reconstruction, as set out in Table 2 below.
Table 2: Provisions which apply in the event of a takeover
or reconstruction
Share plan Provision in the event of a takeover
2023 Short Term Deferred
Incentive Plan
Bonus shares may be released or
exchanged for shares in the new
controlling company
2013 Sharesave Plan and
2023 Sharesave Plan
Options may be exercised within six
months of a change of control
Share Incentive Plan Free shares may be released or
exchanged for shares in the new
controlling company
Restricted Share Plan Awards either vest having regard to
achievement of applicable underpin
conditions and, at the discretion of the
Board, time pro-rating or are exchanged
for an equivalent award in the new
controlling company
Performance Share Plan Awards either vest having regard to
achievement of applicable performance
conditions and, at the discretion of the
Board, time pro-rating or are exchanged
for an equivalent award in the new
controlling company
Shareholders approved the Company’s existing Directors’ remuneration policy
at the AGM in 2024 for a period of three years from the date of that meeting.
That vote, which is binding on the Company, remains in force until 2027, and
thus a new Directors’ remuneration policy will require approval at the 2027
AGM. Further details are set out in the Report on Directors’ remuneration.
The Company was authorised by shareholders at its AGM in 2025 to
purchase its own shares up to a maximum of 29,925,924 ordinary shares,
representing approximately 5% of its issued ordinary share capital. The
Company has not used this authority during FY 2025. The Company intends
to renew this authority at the 2026 AGM.
Additional disclosures
Other information that is relevant to the Directors’ report, and which is
incorporated by reference into this report, can be located as follows:
Page(s)
Future developments of the business 24 to 64
Research and development 32 to 35
Financial instruments and financial risk management 160 and 162
Greenhouse gas emissions 77 to 79
Corporate governance statement 81 to 93
Employee involvement 76
Employees with disabilities 75
Non-financial reporting 24 to 64
Stakeholder engagement 83
Section 172 statement 61
Annual Report and Accounts 2025 Mitchells & Butlers plc74
Strategic Report
Introduction
Governance
Disclosures required pursuant to the UK Listing Rules can be found on the
following pages:
Page(s)
Information required by UK Listing Rule 6.6.1R
1. Long-term incentive schemes 98 to 118
2. Allotment of shares during the period 177
3. Significant contracts 73
4. Significant related party agreements 73
5. Relationship agreement 73
Information required by UK Listing Rule 6.6.6R
6. Directors’ interests 116
7. Significant shareholders (DTR 5) 73
8. Going concern statement 64
9. Shareholder buyback authorities 74
10. Statement of corporate governance 81 to 93
11. Details of Directors’ service contracts 116
12. Climate-related financial disclosures consistent
with TCFD 46 to 51
13. Board diversity 84
The Company has chosen, in accordance with section 414C(11) of the
Companies Act 2006, and as noted in this Directors’ report, to include certain
matters in its Strategic Report that would otherwise be required to be disclosed
in this Directors’ report. The Strategic Report can be found on pages 24 to 64
and includes an indication of future likely developments in the Company,
details of important events and the Company’s business model and strategy.
Employment policies
The Group employed an average of 50,559 people in FY 2025 (FY 2024
50,455). Through its diversity and equality policy, the Company seeks to
ensure that every employee, without exception, is treated equally and fairly
and that all employees are aware of their responsibilities. The Company takes
harassment of any type very seriously and has introduced training for all
employees that clearly outlines the Company’s expectations, and what
employees should do if they are subject to, or a witness of, harassment of any
type. This training also explains the importance of diversity and inclusion in
the workplace and supports our broader DEI agenda.
Employment of disabled persons
Our policies and procedures fully support our disabled colleagues. We take
active measures to do so via:
• a robust reasonable adjustment policy;
• disability-specific online resources (accessible via the Group’s online
recruitment system); and
• processes to ensure colleagues are fully supported.
The Group is responsive to the needs of its employees. As such, should any
employee of the Group become disabled during their time with us, we will
actively retrain that employee and make reasonable adjustments to their
working environment where possible, in order to keep the employee with
the Group. It is the policy of the Group that the recruitment, training, career
development and promotion of disabled persons should, as far as possible,
be identical to that of other employees.
Employee engagement
Mitchells & Butlers engages with its employees on a regular basis and
in a number of ways to suit their different working patterns and this is
discussed further in the Report on Directors’ remuneration on page 98.
Engagement includes:
• line manager briefings;
• communications forums and roadshows held by functions or brands
across the Company;
• a dedicated intranet for the Retail Support Team and Retail Management;
• ‘Mable’, the Mitchells & Butlers online learning platform;
• email news alerts;
• focus groups;
• weekly bulletins – specifically targeted at retail house managers and
mobile workers; and
• employee social media groups.
Details of the financial and economic factors affecting the performance of
the Company are shared with all employees at the appropriate time using the
methods listed above. In line with the requirements of the 2018 Code, the
Board agreed that Dave Coplin will act as a link to the Board for employees in
order to strengthen the ‘employee voice’ at the Board. This involves attending
employee forums, focus groups and providing feedback on values and
behaviours, employee development and upskilling and ensuring that
feedback is listened to and acted upon where appropriate.
As part of this role, Dave Coplin uses the insight he has gained to provide the
Board with an employee perspective across a range of issues, which the Board
considers to be very valuable. Dave meets regularly with senior members of
the Human Resources team and is also supporting the business in how it may
utilise technology to better communicate with employees. In addition, as a
member of the Remuneration Committee his insight is also very helpful in the
context of Executive pay.
Updates on employee matters are normally presented to the Remuneration
Committee or Board at least twice a year and cover a wide range of issues.
Over the course of FY 2025 these updates have focused on employee
engagement and specifically detailed feedback from the two engagement
surveys held during the year, the forthcoming Employment Rights Bill and
its implications for the business, the introduction of a new employee
communications app and progress updates on the implementation of a new
HR and Payroll system, due in 2026.
The Remuneration Committee is also informed where significant changes
are proposed to employment conditions and policies elsewhere in the Group,
or if there are important employee-related projects underway. More detail
on how the Remuneration Committee takes into account wider workforce
polices and the views of employees in relation to Executive pay can be found
on page 108.
We provide opportunities for employees to give their feedback to the Company
in a number of ways, from team or shift meetings in pubs, bars and restaurants
and engagement surveys for all employees to the Mitchells & Butlers Business
Forum. Business Forum representatives collect questions from employees
across the Company and put them to members of the Executive Committee.
The questions and answers are communicated to employees.
Mitchells & Butlers plc Annual Report and Accounts 2025
75
Financial Statements Other Information
Directors’ report continued
‘Hospitality With Heart’ – Our Employee Value Proposition
‘Hospitality With Heart’ is an evolution of the promise we make to our teams.
It enables us to clearly differentiate what it means to work with Mitchells & Butlers.
Pay is of course important to all in the current climate, but our research and
employee feedback show that people value much more than just pay.
What sets us apart is the way we combine rewarding careers with a culture
that truly cares for our people, guests, and communities.
Hospitality With Heart reflects what our employees told us they value most
about working with us – a place where they can thrive, belong, and be proud
of the difference they make every day.
The six core components of Hospitality With Heart:
• A sense of pride, purpose & belonging: We foster a culture of inclusion,
respect, and allyship, so our teams take pride in creating memorable
moments for millions of guests and feel a true sense of belonging in our
local and national community.
• Flexibility: We understand that life doesn’t stop when work begins.
Where possible, we offer flexible working arrangements so our people
can balance their commitments inside and outside of work.
• Fair Reward: We believe hard work should be recognised. Alongside
competitive pay, we provide benefits and rewards that reflect the value
our people bring.
• A Fun & Friendly environment: Hospitality is about people, and we
work hard to create an atmosphere where teams enjoy themselves, feel
supported, and can bring their personality to work every day.
• A Safe & Secure environment: The wellbeing of our teams is essential.
We provide a safe, supportive workplace where people can feel
confident and secure every day.
• Career progression: With structured training and opportunities to grow,
we help our people develop skills for today and careers for tomorrow.
Why this matters
Recent history has shown how important it is to lead with care, flexibility, and
understanding. Hospitality With Heart reflects what makes Mitchells & Butlers
special – the pride our people feel, the support we give each other, and the
memorable moments we create together. Hospitality With Heart is intended
to be more than a just a simple statement. It and its core components shape
the way we work together, look after one another, and ensure every guest
has a great experience. By living this every day, we make Mitchells & Butlers
a place where people want to join and want to stay.
Share ownership
Mitchells & Butlers is keen to encourage greater employee involvement in
the Group’s performance through share ownership. It operates two HMRC
approved all-employee plans, which are the Sharesave Plan (both the 2013
and 2023 versions) and the Share Incentive Plan (which includes Partnership
shares). Further details on the plans are set out in the Report on Directors’
remuneration on pages 98 to 118.
The Company also operates three other plans on a selective basis, which are
the Short Term Deferred Incentive Plan, the Restricted Share Plan and the
Performance Share Plan.
During the year, the Company has remained within its headroom limits for
the issue of new shares for share plans as set out in the rules of the above
plans. The Company uses an employee benefit trust to acquire shares in the
market when appropriate to satisfy share awards in order to manage headroom
under the plan rules. A total of 2,000,000 shares were purchased by the
employee benefit trust during FY 2025.
Responsible alcohol policy
Mitchells & Butlers operates the Challenge 21 policy in all our businesses
across England and Wales, a Challenge 25 policy in our Scottish businesses
and similar policies in Northern Ireland and Germany. The policy requires
that any guest attempting to buy alcohol who appears to be under the age
of 21 in England, Wales or Northern Ireland (or 25 in Scotland) must provide
an acceptable form of proof of age ID to confirm that they are over 18 before
they can be served. We employ similar policies across the various regions of
Germany in order to comply with local laws.
All of these policies form part of our regular training for our employees on
their responsibilities for serving alcohol.
Political donations
The Company made no political donations during the year and intends to
maintain its policy of not making such payments. It will, however, as a
precautionary measure to avoid inadvertent breach of the law, seek shareholder
authority at its 2026 AGM to make limited donations or incur limited political
expenditure, although it has no intention of using the authority.
Modern Slavery Act 2015
In accordance with the requirements of the Modern Slavery Act, a copy of
the Company’s Modern Slavery Act compliance statement, signed on behalf
of the Board by Phil Urban, can be accessed on the Company’s website,
www.mbplc.com
Annual Report and Accounts 2025 Mitchells & Butlers plc76
Strategic Report
Introduction
Governance
This statement covers the Company’s commitment to operating and
conducting its business in such a way that human rights are respected and
protected. Mitchells & Butlers will not permit or condone any form of slavery,
servitude, forced or compulsory labour or human trafficking. It clearly states
how the Company is committed to ensuring that there is no modern slavery
or human trafficking in its supply chains or in any part of its businesses and
this is reflected in the Mitchells & Butlers Modern Slavery & Human
Trafficking Policy and Supplier Code of Conduct. The statement also covers
due diligence processes for slavery and human trafficking, supply chain
accountability, Company accountability (including ethical and socially
responsible conduct in the workplace), training and information and
reviewing key performance indicators to measure how effective we have
been in ensuring that slavery and human trafficking is not taking place in any
part of our business and supply chain, in terms of record keeping and actions
taken to strengthen supply chain due diligence, auditing and verification.
Phil Urban has ultimate responsibility for employment-related issues and he
also oversees matters relating to human rights including the implementation
of the Modern Slavery Act throughout the Group.
Annual General Meeting
The notice convening the Annual General Meeting is contained in a circular
sent to shareholders with this report and includes full details of the
resolutions proposed.
Auditor
KPMG LLP has expressed its willingness to continue in office as auditor of the
Company and its reappointment will be put to shareholders at the AGM.
Funding and liquidity risk
In order to ensure that the Group’s long-term funding strategy is aligned with
its strategic objectives, the Treasury Committee regularly assesses the maturity
profile of the Group’s debt, alongside the prevailing financial projections and
three year plan. This enables it to ensure that funding levels are appropriate
to support the Group’s plans.
The current funding arrangements of the Group consist of the securitised
notes issued by Mitchells & Butlers Finance plc (and associated liquidity
facility) and £150m of unsecured committed bank facilities (reduced by
£50m during the year). Further information regarding these arrangements is
set out on page 64 and is also included in note 4.1 to the financial statements
on page 158. The terms of the securitisation and the bank facilities contain
a number of financial and operational covenants. Compliance with these
covenants is monitored by Group Treasury.
The Group prepares a rolling daily cash forecast covering a six-week period, a
four-weekly update on six-month forward-looking cash forecasts and an annual
cash forecast by period. These forecasts are reviewed and used to manage
the investment and borrowing requirements of the Group. A combination of
cash pooling and zero balancing agreements is in place to ensure the optimum
liquidity position is maintained. Committed facilities outside of the securitisation
are sized to ensure that the Group can meet its medium-term anticipated
cashflow requirements. Short-term cash management is optimised through
regular discussions considering projected cash inflows and outflows.
During FY 2022, the Group completed the necessary amendments to transition
its financing arrangements in advance of the discontinuation of LIBOR as a
floating reference rate, replacing LIBOR with a SONIA-based rate in respect
of sterling and a SOFR-based rate in respect of US dollars. The amendments
in respect of the securitised bonds were agreed by the Bondholders through
a formal consent solicitation process and bilateral agreements were reached
with securitised swap and liquidity facility providers (using amended
reference rates consistent with those agreed under the bonds). The
unsecured committed facility is also documented on a SONIA basis.
Going Concern
After considering forecasts, sensitivities and mitigating actions available
to management and having regard to risks and uncertainties, the Directors
have a reasonable expectation that the Group has adequate resources to
continue to operate within its borrowing facilities and covenants for a period
of at least 12 months from the date of signing the financial statements.
Accordingly, the financial statements have been prepared on the going
concern basis. Full details are included in Section 1 of the notes to the
consolidated financial statements.
Events after the balance sheet date
There are no post-balance sheet events to report.
Greenhouse gas (‘GHG’) emissions statement
The Group generates GHG emissions throughout its estate of bars and
restaurants for heating, cooling, ventilation, lighting, and catering including
the refrigeration and preparation of food and drink.
Location-based GHG emissions per £m turnover have decreased by 14% in
FY 2025 in comparison to FY 2024. Market-based GHG emissions per £m
turnover have decreased by 9% for the same period. This is due to the
following key factors:
1. Realisation of the benefit from the efficiency measures that we have
rolled out as well as decreasing our fugitive (f-gas) emissions.
2. An increase in revenue generated in FY 2025 compared to FY 2024.
3. The published GHG Electricity conversion factor to convert kWh to
tCO
2
e saw a 15% reduction compared to the published factor for FY 2024.
We have also continued with our commitment to purchase a green,
REGO-backed supply of electricity from renewable sources in FY 2025.
Mitchells & Butlers plc Annual Report and Accounts 2025
77
Financial Statements Other Information
Directors’ report continued
Table 3: Mitchells & Butlers’ carbon reporting disclosure
Assessment parameters
Assessment year FY 2025
Consolidation approach Financial control
Boundary summary All bars and restaurants either owned or under operational control during FY 2025 were included.
Scope General classifications of greenhouse gas emissions scopes based on the GHG protocol and ISO14064-1:2006 within
the context of the Group’s operations are as follows:
Scope 1 – direct greenhouse gas emissions from sources that are owned or controlled by the Group, e.g., fuel combustion
of varying types, occurs during kitchen activity and to generate heating and domestic hot water most commonly through
natural grid supplied gas, but also some LPG (Liquefied Petroleum Gas) and oil. Real fires fuelled by logs or coal are also
used to supplement customer comfort and enhance ambience.
Scope 2 – GHG emissions from the generation of purchased electricity used during kitchen activity and for lighting,
heating, and cooling as well as from company electric vehicles.
Scope 3 – indirect emissions from activities up and down the Group’s value chain but occurring from sources not owned
or controlled by the Group.
This assessment focuses on Scope 1 & 2 emissions only (Scope 3 is optional under the current regulations).
Consistency with the
financial statements
Scope 1 & 2 emissions are reported for both FY 2025 and FY 2024 on a financial year basis.
Franchise sites are excluded as they are responsible for arranging and paying for their own energy.
Alex sites in Germany are included. Emissions are based on UK-average emissions per outlet multiplied by the number
of Alex sites. These sites make up the non-UK aspect of this report.
Exclusions Scope 1 – Wood, charcoal, and kerosene are excluded because each of these amounts to less than 1% of total emissions
which falls below the materiality threshold.
Emission factor data source All carbon emission factors used are sourced from the UK Government GHG conversion factors for company reporting 2025.
Assessment methodology Environmental Reporting Guidelines: including Streamlined Energy and Carbon Reporting Guidelines March 2019.
Materiality threshold All emission types estimated to contribute >1% of total emissions are included.
Estimation Scope 1 & 2 – Electricity and gas consumption uses a pro-rata estimate for supplies that do not have complete data in
the reporting year.
Intensity threshold Emissions are stated in tonnes CO
2
e per £m revenue. This intensity ratio puts emissions into context given the scale of the
Group’s activities and enables comparison with prior year performance.
Target Emissions during FY 2024 are provided for comparative purposes. Note the figures for FY 2024 have been re-stated, as an
update was required for the calculation of Scope 1 emissions (which represents 1% of Scope 1 emissions, and is not material).
Energy efficiency action taken
During FY 2025 we continued our deployment of local renewable energy and low carbon technology sources including our solar panel roll out, with 244 sites
now completed, allowing us to generate on-site renewable energy. We have continued to expand the roll out of the Internet of Things (IoT) solution, with 870
sites complete, which involves installing remote sensors and controllers for lighting, catering, and heating/cooling systems. In addition, across the portfolio
we have successfully removed gas as an energy source for cooking, heating and hot water in 24 sites as well as converting 100 kitchens from gas to electricity.
In addition to the technological solutions adopted we have also continued to improve our staff awareness and engagement in energy use and carbon
emissions. We have a team of energy ambassadors who work across the business, who are trained to support General Managers to investigate and resolve
issues resulting in energy exceedances and to identify opportunities for optimising energy use and reducing consumption.
Commentary
Both location- and market-based reporting methodologies are used. Scope 2 location-based emissions use UK grid average emissions. It is worth noting that
the published UK grid average emission factor for Scope 2 electricity saw a 15% reduction compared to the published factor for FY 2024 which is having a
significant influence on the Scope 2 location-based emissions reduction. Scope 2 market-based emissions account for the electricity purchased within the UK
portfolio from REGO-backed sources which result in zero emissions.
For transparency we have reported two intensity ratios: a location-based ratio and a market-based ratio for both Scope 1 & 2 emissions.
Annual Report and Accounts 2025 Mitchells & Butlers plc78
Strategic Report
Introduction
Governance
Global GHG emissions and energy use data for FY 2025
Current reporting period FY 2025 Comparison reporting period FY 2024
UK and
offshore
Global
(excluding UK
and offshore) Total
UK and
offshore
Global
(excluding UK
and offshore) Total
% Change
year-on-year
Scope 1 tCO
2
e
(location-based) 80,921 2,228 83,149 83,946 2,220 86,166 -4%
Scope 2 tCO
2
e
(location-based) 54,716 1,562 56,278 64,927 1,780 66,707 -16%
Total Scope 1 & 2 emissions tCO
2
e
(location-based) 135,637 3,790 139,427 148,873 4,000 152,873 -9%
Total Scope 1 & 2 emissions tCO
2
e
(market-based) 80,970 3,790 84,760 83,980 4,000 87,980 -4%
Energy Consumption used to calculate
the above emissions: kWh 706,610,850 19,884,920 726,495,770 716,909,464 19,454,275 736,363,739 -1%
Intensity Ratio: tCO
2
e/turnover (£m)
– (location-based)
a
– – 51 – – 59 -14%
Intensity Ratio: tCO
2
e/turnover (£m)
– (market-based)
a
– – 31 – – 34 -9%
a. Intensity ratios based on the turnover for FY 2024 of £2,610m and for FY 2025 of £2,711m.
Disclosure of information to auditor
Having made the requisite enquiries, so far as the Directors are aware, specifically those who are a Director at the date of approval of the Annual Report, there
is no relevant audit information (as defined by Section 418(3) of the Companies Act 2006) of which the Company’s auditor is unaware and each Director has
taken all steps that ought to have been taken to make themselves aware of any relevant audit information and to establish that the Company’s auditor is aware
of that information.
This report, which includes the Strategic Report, has been approved by the Board and is signed on its behalf.
Andrew Freeman
Group General Counsel and Company Secretary
27 November 2025
Mitchells & Butlers plc Annual Report and Accounts 2025
79
Financial Statements Other Information
Statement of Directors’ responsibilities in respect of the
Annual Report and Accounts
The Directors are responsible for preparing
the Annual Report and Accounts and the Group
and parent Company financial statements in
accordance with applicable law and regulations.
Company law requires the Directors to prepare Group and parent Company
financial statements for each financial period. Under that law they are
required to prepare the Group financial statements in accordance with
UK-adopted international accounting standards and applicable law and have
elected to prepare the parent Company financial statements in accordance
with UK accounting standards and applicable law, including FRS 101
Reduced Disclosure Framework.
Under company law the Directors must not approve the financial statements
unless they are satisfied that they give a true and fair view of the state of
affairs of the Group and parent Company and of the Group’s profit or loss for
that period. In preparing each of the Group and parent Company financial
statements, the Directors are required to:
• select suitable accounting policies and then apply them consistently;
• make judgements and estimates that are reasonable, relevant and reliable;
• for the Group financial statements, state whether they have been
prepared in accordance with UK-adopted international accounting
standards;
• for the parent Company financial statements, state whether applicable
UK accounting standards have been followed, subject to any material
departures disclosed and explained in the parent Company financial
statements;
• assess the Group and parent Company’s ability to continue as a going
concern, disclosing, as applicable, matters related to going concern; and
• use the going concern basis of accounting unless they either intend to
liquidate the Group or the parent Company or to cease operations, or have
no realistic alternative but to do so.
The Directors are responsible for keeping adequate accounting records that
are sufficient to show and explain the parent Company’s transactions and
disclose with reasonable accuracy at any time the financial position of the
parent Company and enable them to ensure that its financial statements
comply with the Companies Act 2006. They are responsible for such internal
control as they determine is necessary to enable the preparation of financial
statements that are free from material misstatement, whether due to fraud or
error, and have general responsibility for taking such steps as are reasonably
open to them to safeguard the assets of the Group and to prevent and detect
fraud and other irregularities.
Under applicable law and regulations, the Directors are also responsible
for preparing a Strategic Report, Directors’ report, Report on Directors’
remuneration and Corporate Governance Statement that comply with that
law and those regulations.
The Directors are responsible for the maintenance and integrity of the
corporate and financial information included on the Company’s website.
Legislation in the UK governing the preparation and dissemination of
financial statements may differ from legislation in other jurisdictions.
In accordance with Disclosure Guidance and Transparency Rule (‘DTR’)
4.1.16R, the financial statements will form part of the annual financial report
prepared under DTR 4.1.17R and 4.1.18R. The auditor’s report on these
financial statements provides no assurance over whether the annual financial
report has been prepared in accordance with those requirements.
Responsibility statement of the Directors in respect of the
annual financial report
We confirm that to the best of our knowledge:
• the financial statements, prepared in accordance with the applicable set
of accounting standards, give a true and fair view of the assets, liabilities,
financial position and profit or loss of the Company and the undertakings
included in the consolidation taken as a whole; and
• the Strategic Report includes a fair review of the development and
performance of the business and the position of the issuer and the
undertakings included in the consolidation taken as a whole, together
with a description of the principal risks and uncertainties that they face.
We consider the Annual Report and Accounts, taken as a whole, is fair,
balanced and understandable and provides the information necessary for
shareholders to assess the Group’s position and performance, business
model and strategy.
Tim Jones
Chief Financial Officer
27 November 2025
Annual Report and Accounts 2025 Mitchells & Butlers plc80
Strategic Report
Introduction
Governance
Corporate governance statement
The Board is responsible for ensuring that the
activities of the Group and its various businesses
are conducted in compliance with the law,
regulatory requirements and rules, good practices,
ethically and with appropriate and proper
governance and standards.
This includes reviewing internal controls, ensuring that there is an appropriate
balance of skills and experience represented on the Board, compliance with
the applicable UK Corporate Governance Code, which is issued by the
Financial Reporting Council and which is available at www.frc.org.uk, and
maintaining appropriate relations with shareholders and other stakeholders.
The latest financial information for Mitchells & Butlers and its Group of
companies is included in the 2025 Annual Report and Accounts (of which
this Corporate Governance Statement forms part) and which is available
online at: www.mbplc.com/investors.
Shareholder relations
The Board recognises that it is accountable to shareholders for the performance
and activities of the Company. The Company regularly updates the market
on its financial performance, at the half year and full year results in May and
November respectively, and by way of other announcements as required.
The content of these updates is available by webcast on the Company’s
website www.mbplc.com, together with general information about the
Company so as to be available to all shareholders. The Company has a
regular programme of dialogue with its larger shareholders which provides
an opportunity to discuss, on the basis of publicly available information,
the progress of the business.
On a more informal basis, the Chair, the Chief Executive and the Chief Financial
Officer regularly report to the Board the views of larger shareholders about
the Company, and the other Non-Executive Directors are available to meet
shareholders on request and are offered the opportunity to attend meetings
with larger shareholders.
The AGM provides a useful interface with shareholders, many of whom are
also guests in our pubs, bars and restaurants. All proxy votes received in
respect of each resolution at the AGM are counted and the balance for and
against, and any votes withheld, are indicated.
The UK Corporate Governance Code (the ‘Code’) contains best practice
recommendations in relation to corporate governance yet acknowledges
that, in individual cases, these will not all necessarily be appropriate for
particular companies. Accordingly, the Code specifically recognises the
concept of ‘comply or explain’ in relation to divergences from the Code
which reflect the specific circumstances of individual companies.
No changes to the Board were made during the year and the Board currently
consists of nine members, three of whom are independent Non-Executive
Directors (including two female independent Non-Executive Directors).
A more detailed explanation is set out on page 84.
“This statement sets out our report
to shareholders on the status of our
corporate governance arrangements.”
Bob Ivell
Chair
Mitchells & Butlers plc Annual Report and Accounts 2025
81
Financial Statements Other Information
Corporate governance statement continued
Corporate governance arrangements during FY 2025
In FY 2025 the Board maintained its regular set of scheduled meetings.
The details of the number of meetings of the Board and the Audit and
Remuneration Committees in the period are set out on page 66.
The Executive Committee, as the principal operational decision-making
forum of the Group, maintained its monthly cycle of meetings throughout
FY 2025. The outcomes of these meetings were consistently reported to the
Board. The Executive Committee specifically focused on various stakeholder
arrangements, employee engagement, managing supplier arrangements
and overseeing the Group’s pension schemes, as well as managing the
property portfolio.
Employee wellbeing arrangements and workplace implications
The Company has an established wellbeing strategy that encompasses five
pillars of wellbeing: social, environmental, physical, mental and financial.
Within these pillars there are a range of resources and tools available for line
managers and employees to access, including:
• our employee assistance programme which is run by the Licensed Trade
Charity. They operate a free, 24/7 confidential helpline and a website
available to all employees;
• an online wellbeing centre that provides access to workout videos,
nutritional advice, financial wellbeing tools and mindfulness and
meditation videos and articles;
• financial wellbeing tools and support;
• mental health training available for all line managers, developed in
conjunction with the Samaritans, to assist them in supporting their teams;
• wellbeing events which are now often held virtually and this will enable
all employees to participate in various activities and workshops; and
• menopause awareness training for employees and line managers.
Corporate governance code reporting
For FY 2025, the Company has reported under the 2018 Code.
Its requirements include:
1. enhanced Board engagement with the workforce and wider
stakeholders, including describing how the Company complies with its
obligations to take into account stakeholder views pursuant to Section
172 of the Companies Act 2006;
2. demonstration of a clear business strategy aligned with a healthy
corporate company culture;
3. a high-quality and diverse board composition; and
4. proportionate executive remuneration that supports the long-term
success of the business.
The Board established a Corporate Responsibility Committee in June 2019.
The purpose of this Committee is to allow more executive, leadership and
functional management involvement in key areas of significant importance
including environmental impacts of the Group’s activities, community
relationships and the role of the Company in society. The existence of this
Committee demonstrates a significant commitment to the enhancement of
governance in general and matters such as stakeholder engagement. More
details of this Committee and its membership are set out on page 90 and its
Terms of Reference are on the Company’s website www.mbplc.com.
Alignment to the 2018 Code
As part of its alignment with the 2018 Code, the following operational and
administrative framework is in place.
1. Enhanced Board engagement with the workforce and
wider stakeholders
The 2018 Code recommends that the Board should consider wider
stakeholder views, in particular implementing arrangements for gathering
the views of the workforce. The 2018 Code permits a designated Non-
Executive Director to fill this role and in 2019 the Board designated Dave
Coplin for this role. The purpose of this appointment under the 2018 Code
is to gather employee views, ensure employee views are taken into account
in Board discussions and decision-making, and engage with the workforce
to explain how executive remuneration aligns with the Company’s
remuneration policy. This commenced in FY 2019 with Dave Coplin being
introduced to those executive managers who could help ensure that
meetings and site visits were effective. Progress has continued to date.
Mitchells & Butlers has an Employee Forum with elected representatives
which normally meets with the Executive Directors and members of the
Executive Committee twice a year. Dave Coplin also attends these meetings.
During FY 2025 two meetings were held in March and September.
Questions from the workforce in general are sought through the intranet to
seek areas of concern or enquiry and to enable the Company to respond.
The Employee Forum will, from time to time, be provided with an overview
of how executive pay is aligned with the Company’s strategic objectives.
The Terms of Reference of the Employee Forum reflect this. Further details
on employee engagement can be found in the Report on Directors’
remuneration on page 98.
The results of regular Board roadshows are used to update managers on
performance and the latest developments affecting the Group, and employee
feedback is included in Board papers where appropriate as part of the
decision-making process.
2. A clear business strategy aligned with a healthy corporate
company culture
In July 2018 the Financial Reporting Council published ‘Guidance on the
Strategic Report’, strengthening the link between the purpose of the
Strategic Report and the Directors’ duty under Section 172 of the Companies
Act 2006, to promote the success of the Company. The requirement under
the Companies Act 2006 is that the Strategic Report must inform members
of the Company, and help them assess, how the Directors have performed
their duty under Section 172 to promote the success of the Company. The
revised guidance encourages companies to consider the broader matters
that may impact upon the performance of the Company over the longer term
including the interests of wider stakeholders, and it is now established
Mitchells & Butlers practice that strategic proposals put to the Company’s
Board meetings include a requirement to consider the Directors’ duties
under Section 172. A detailed explanation of the manner in which the Board
has discharged its responsibilities under Section 172 is set out in the
Compliance Statements on page 61.
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Strategic Report
Introduction
Governance
The specific provisions of Section 172 require Directors to act in the way they
consider, in good faith, would be most likely to promote the success of the
Company for the benefit of its members as a whole and, in doing so, have
regard to the interests of other stakeholders. The specific requirements of
Section 172 are that Boards should consider:
• the likely consequences of decisions in the long term;
• the interests of the Company’s employees;
• the fostering of business relationships with suppliers, customers
and others;
• the impact of the Company’s operations on the community and
the environment;
• the desirability of the Company maintaining a reputation for high
standards of business conduct; and
• the need to act fairly as between members of the Company.
The 2018 Code specifically requires that the Board should understand the
views of the Company’s key stakeholders (including employees, suppliers,
customers and others) and keep stakeholder engagement mechanisms
under review so they remain effective. The 2018 Code also recommends
that there should be regular reporting as to how the Board has complied with
this engagement approach in its decision-making processes and how the
interests of different shareholders have been considered. The 2018 Code
sets out a series of aspects to be taken into account in demonstrating the
Board has complied with its Section 172 responsibilities. These are listed
below, together with Company procedures which align Mitchells & Butlers’
corporate behaviour with the spirit and values of the 2018 Code and how the
Board has employed its oversight of the Company’s purpose. This purpose
is set out in more detail in the Strategic Report.
a. Culture
Mitchells & Butlers has in place a set of PRIDE values of Passion, Respect,
Innovation, Drive and Engagement which underpin its key priorities of
People, Practices, Profits and Guests. The Board observes these PRIDE
values in discharging its everyday responsibilities and considering decisions
and proposals and encourages all levels of the organisation to do so.
b. Strategy
In demonstrating that the Board is promoting the success of the Company
and taking decisions with regard to their long-term impact, the Board must
ensure it has in place, and regularly reviews, its agreed strategy.
Developments arising from the strategy review are followed up, documented
and, on a regular basis, the Board reviews whether the Company is operating
in line with that strategy and/or there needs to be a revision of the strategy to
reflect external, and possibly internal, changes in the dynamics of the business.
Board papers refer to whether they reflect a proposal that is aligned to,
or diverges from, the agreed strategy.
Principle B and Provisions 1 and 2 of the 2018 Code require the Board to:
• describe how opportunities and risks to the future success of the
business have been considered and addressed, the sustainability of the
Company’s business model and how its governance contributes to the
delivery of its strategy;
• establish the Company’s purpose, values and strategy, ensure that these
and its culture are aligned and describe the activities the Board takes to
monitor and implement this culture; and
• describe the Company’s approach to investing in and rewarding its workforce.
Details of how the Board achieves these are given in the Strategic Report on
pages 24 to 64.
c. Training and awareness
There is an induction process for all Directors on appointment and the
Group General Counsel and Company Secretary is available to all Directors,
whether of the Company or any of the subsidiaries, for consultation and
guidance on matters of governance in relation to any aspects of the affairs
of any part of the Group. As circumstances or new areas develop, whether
in the operations of the business or externally, appropriate training will be
considered to ensure that each Director is involved in decision-making and
oversight with the benefit of the correct amount of knowledge as to what is
relevant for consideration.
The induction process ensures that Directors are aware of, and understand,
the requirements under Section 172. Nevertheless, all subsidiary Directors
have received a comprehensive guide to provide training below Board level
in relation to Section 172 requirements, focusing on how such considerations
should be documented in the future, to ensure a proper understanding of
what needs to be considered and what evidence is required to be presented
when putting proposals to the Board.
Ongoing training and guidance on their responsibilities continues to be
provided to subsidiary company Directors.
d. Information
Board paper procedures now contain specific references to the factors
referred to in Section 172 of the Companies Act 2006, so they can be
brought to the Board’s attention where appropriate.
e. Policies and processes
The business has an existing comprehensive suite of policies and processes
across a wide spectrum of its operations and practices and these are updated,
revised and re-communicated regularly.
f. Stakeholder engagement
Engagement with the workforce is addressed above and engagement with
guests is dealt with through the Guest Health initiatives and this is explained
in our Value Creation story on pages 36 to 39. Engagement with key, critical
suppliers is addressed through the supplier segmentation tiering process
where we consult with suppliers on a regular basis. This varies from monthly
interaction to annual reviews, depending on where the supplier appears on
the Company’s tier 1 to tier 4 ranking (which is a multi-factor process involving
criticality, volume, spend size and availability of substitute products).
Mitchells & Butlers plc Annual Report and Accounts 2025
83
Financial Statements Other Information
Corporate governance statement continued
3. Board composition and diversity
a. Board composition
The Board is currently comprised of nine members whose biographies are outlined on pages 70 and 71. These are the Chair, Chief Executive and Chief
Financial Officer, three independent Non-Executive Directors and three Non-Executive Directors. Two independent Non-Executive Directors, representing
22% of the Board’s Directors, are female, one of whom (Jane Moriarty) is also the Senior Independent Director. The Chair, Bob Ivell, has served on the Board
since May 2011. None of the Directors are from a minority ethnic background (as defined in the UK Listing Rules).
The shareholder representative Non-Executive Directors are nominated by Piedmont and Elpida, who, together with Smoothfield, are subsidiaries of
Odyzean, the Company’s largest shareholder, which holds approximately 57% of the Company’s issued share capital. Further information relating to the
Odyzean Group and the specific nomination rights held by Piedmont and Elpida is set out on page 73.
The Board acknowledges that the Chair’s period of tenure on the Board does not meet the best practice recommendations of the UK Corporate Governance Code.
The Board also notes that Dave Coplin has served more than nine years on the Board and so may not be considered independent under Provision 10 of the
2018 Code. However, the Board considers that his performance as a non-executive director continues to be effective and that he remains independent in
character and judgement. The Board considers that there are no relationships or circumstances in place which would be likely to affect, or might appear to
affect, his judgement in the exercise of his role.
The Board also acknowledges that the level of Board diversity does not meet the targets set out in the UK Listing Rules and, whilst this overall composition of
the Board remains a matter for continuous review, it should be noted that in the prospectus published by the Company on 22 February 2021 in connection
with the Open Offer, the Company confirmed that the Odyzean Group had indicated that it: (a) would disregard specific corporate governance requirements
around tenure; (b) intended to review the composition of the Board, which may result in less focus on compliance with UK Corporate Governance Code
recommendations in the future; and (c) the time and cost devoted by the senior management team to public company matters should be reduced. The Company
has received no indication of a change in approach on these issues from the Odyzean Group.
The composition of the Board and executive management is set out in the following tables as required by UKLR 22.2.30R(2). The underlying information was
collected directly from the relevant individuals. Executive management is classed as the Executive Committee, which includes two Board members.
Gender identity and sex
Number of Board members
Percentage of
the Board
Number of senior
positions on the
Board (CEO, CFO,
SID and Chair)
Number in
executive
management
Percentage of
executive
management
Men 78 3 7 70
Women 22 1 3 30
Ethnic background
Number of Board members
Percentage of
the Board
Number of senior
positions on the
Board (CEO, CFO
SID and Chair)
Number in
executive
management
Percentage of
executive
management
White British or other White (including minority-white groups) 100 4 10 100
Mixed/multiple ethnic groups – – – –
Asian/Asian British – – – –
Black/African/Caribbean/Black British – – – –
Other ethnic group – – – –
Not specified/prefer not to say – – – –
b. Board diversity
Principle J of the 2018 Code states that boards are encouraged to ‘promote diversity of gender, social and ethnic backgrounds, cognitive and personal
strengths’ through their appointments and succession planning. The purpose is to ensure that there is a balance of views from different genders and other
experiences and skill sets around the board table so that decision-making can be made with good oversight of all relevant factors.
Dave Coplin has been identified by the Board as the Director responsible for oversight of the Company’s diversity and inclusion arrangements. The Company
has had a Board Diversity Policy in place for some time, but during FY 2019 it was also agreed that annual talent pipeline presentations to the Board should
include the extent to which diversity aspects have been taken into account in development plans/recruitment, and that ethnicity and disability reporting
should be addressed, to the extent that the Company has reliable data.
Gender Pay Gap data is already overseen by the Remuneration Committee and details are set out on page 114 of the Report on Directors’ remuneration.
Annual Report and Accounts 2025 Mitchells & Butlers plc84
Strategic Report
Introduction
Governance
4. Proportionate executive remuneration
This is dealt with on page 114 of the Report on Directors’ remuneration.
Corporate governance
The Board is committed to high standards of corporate governance.
The Board considers that the Company has complied throughout the year
ended 27 September 2025 with all the Provisions and best practice guidance
of the 2018 Code except certain specific aspects related to the Chair’s tenure,
Board composition, the constitution of a Board Committee and effectiveness
reviews. This Corporate Governance Statement addresses the areas where,
for reasons specific to Mitchells & Butlers, there are divergences from the
2018 Code as described below.
The Audit Committee report and Nomination Committee report, which are
set out on pages 94 to 97 and page 89 respectively of the Annual Report,
also form part of this Corporate Governance Statement and they should all
be considered together.
The Board recognises the importance of good corporate governance in
creating a sustainable, successful and profitable business and details are set
out in this statement of the Company’s corporate governance procedures
and application of the principles of the 2018 Code. There are, however, a
small number of areas where, for reasons specifically related to the Company,
the detailed Provisions of the 2018 Code were not fully complied with in
FY 2025. These areas are kept under regular review. A fundamental aspect
of the 2018 Code is that it contains best practice recommendations in relation
to corporate governance yet acknowledges that, in individual cases, these
will not all necessarily be appropriate for particular companies. Accordingly,
the 2018 Code specifically recognises the concept of ‘comply or explain’ in
relation to divergences from it.
Compliance with the Code
Except for the matters which are explained below (in line with the ‘comply or
explain’ concept), the Company complied fully with the Principles and Provisions
of the 2018 Code throughout the financial period in respect of which this
statement is prepared (and continues to do so as at the date of this statement).
Explanation for non-compliance with parts of the Code
The current Board consists of the two Executive Directors and the Chair,
the three Independent Non-Executive Directors and three representative
directors of the Odyzean Group which holds approximately 57% of the
issued share capital. The Board does not currently intend to change this
arrangement and believes that, despite not strictly complying with the 2018
Code, the current structure strengthens corporate governance as it is both
representative of the Company’s shareholder base and demonstrates the
Odyzean Group’s ongoing commitment and support to the overall strategy
and management of the Company.
The assessment of the composition of the Board and its Committees and the
Chair’s tenure should be considered in the context of the explanation already
set out under the heading of ‘Board composition and diversity’ on page 84.
During the year, there were four separate areas of divergence from full
compliance with the 2018 Code, as set out below by reference to specific
paragraphs in the 2018 Code.
1. Chair’s tenure (Provision 19)
Provision 19 of the 2018 Code states:
“The chair should not remain in post beyond nine years from the date of their
first appointment to the board. To facilitate effective succession planning and
the development of a diverse board, this period can be extended for a limited
time, particularly in those cases where the chair was an existing non-executive
director on appointment. A clear explanation should be provided.”
Bob Ivell was appointed to the Board in May 2011 and, as such, his
appointment extended beyond the normal nine year tenure, which expired
in May 2020. The Board had already reviewed this in advance in 2019 and
concluded that it was appropriate that he should remain in place as Chair.
Mr Ivell’s extensive industry experience and his involvement with such
influential bodies as UK Hospitality have been of great assistance to the
Company in addressing the ongoing challenges of energy prices, inflationary
cost pressures, the demanding trading environment and dampened consumer
confidence. The requirement for a stable and experienced Board in such
circumstances, and it being an inappropriate time for the Board to be
considering changes in the existing arrangements, meant that no further
consideration was given in FY 2025 to Provision 19 of the 2018 Code,
in relation to Bob Ivell’s Chair tenure.
2. Composition of the Board (Provision 11)
Throughout the year, Provision 11 of the 2018 Code, which requires that at
least half the board, excluding the chair, should be non-executive directors
whom the board considers to be independent, was not complied with.
Accordingly, this had consequential implications on the composition of the
Remuneration Committee.
The Board does not comply fully with the requirement for at least half of its
members to be independent, due to the presence of three shareholder
representatives on the Board, representing members of the Odyzean Group.
These shareholders maintain a dialogue via their representatives on the Board,
all of whom are careful to ensure that there is no conflict between that role
and their duty to the Board and other shareholders.
The members of the Odyzean Group made extremely significant investments
in the Company and currently hold approximately 57% of the Company’s
issued share capital. The Board considers their investment objectives to be
fully aligned with those of the Group and of other shareholders. The Board
maintains excellent relations with its major shareholders and considers their
commitment to be a significant factor in the ongoing stability of the Board,
particularly as a result of their strong support of the Board’s long-term
strategy, including the recent Ignite initiatives. Their continued investment
and presence on the Board adds value as the Group works towards common
goals, and in pursuit of the Company’s published strategy. In particular, the
members of the Odyzean Group have been very supportive of the Board’s
actions when the Company had to deal with the forced closure of the business
during the Covid-19 pandemic, followed by the need for an Open Offer in
FY 2021, which they subscribed for in full. Their respective representatives
continued to offer valuable advice and experience while the Board
considered options in the face of such unprecedented circumstances.
The Board intends to continue to work closely with the representatives of its
major shareholders to further the interests of the Company. The Company is
not aware of any changes being proposed to the shareholder representative
profile of the Board in the immediate future.
Mitchells & Butlers plc Annual Report and Accounts 2025
85
Financial Statements Other Information
Corporate governance statement continued
3. Constitution of Committees
Throughout FY 2025, the Company had (and continues to have) fully
functioning Nomination, Audit and Remuneration Committees as required
by the 2018 Code.
Remuneration Committee (Code Provision 32)
The Remuneration Committee is not fully compliant with the relevant
Provisions of the 2018 Code. Provision 32 of the 2018 Code specifies that the
Remuneration Committee should consist of independent Non-Executive
Directors and the Remuneration Committee included the presence of a
representative of a major shareholder who is a member of the Odyzean
Group. As set out on page 73, under the terms of the Deed of Appointment
between the Company and Piedmont, Piedmont is entitled to have a Director
attend, and receive all the papers relating to, meetings of the Remuneration
Committee. The Board has, in the circumstances, agreed that Mr Levy
should be a member of the Committee. The Board has carefully considered
the implications of this arrangement and has concluded that it constitutes a
valid exception under the ‘comply or explain’ regime of the 2018 Code, in
that the shareholder concerned is committed to the progression and growth
of the Company, has made a substantial financial commitment and is fully
supportive of the Group’s strategy. All the shareholder representatives have
significant commercial and financial experience and make a substantial
contribution to the Committees and the Group remains fully committed
to working with them on matters affecting the Group and its activities in
the future.
4. Effectiveness reviews (Provision 21)
As reported on page 69, the Chair has kept the skills, contributions and
experience of the Board members under close review throughout FY 2025.
Provision 21 requires that there should be a formal and rigorous annual
evaluation of the performance of the Board, its committees, the Chair and
individual Directors; that the Chair should consider having a regular externally
facilitated board evaluation; that in FTSE 350 companies this should happen
at least every three years; and that the external evaluator should be identified
in the annual report and a statement made about any other connection it has
with the company or individual directors. None of these evaluations took
place in FY 2025 and the Board will consider if it is appropriate to carry out
any such evaluations, in FY 2026.
The information required by Disclosure Guidance and Transparency Rule
(‘DTR’) 7.1 is set out in the Audit Committee report on pages 94 to 97.
The information required by DTR 7.2 is set out in this Corporate Governance
Statement, other than that required under DTR 7.2.6 which is set out in the
Directors’ report on pages 72 to 79.
Board composition
The Board started the year with nine Directors and the table on page 87 lists
the composition of the Board during the year. There were no changes to the
Board during FY 2025. On 23 October 2025, the Board announced the
retirement of the Chief Financial Officer, Tim Jones, and the appointment of
Emma Harris in his place. These changes are expected to take place in early
summer 2026. No further significant changes to the leadership and oversight
of the Group by its Board and its Committees are currently being considered.
The Board
The Board is responsible to all stakeholders, including its shareholders, for
the strategic direction, development and control of the Group. It approves
strategic plans and annual capital and revenue budgets. It reviews significant
investment proposals and the performance of past investments and maintains
oversight, supervision and control of the Group’s operating and financial
performance. It monitors the Group’s overall system of internal controls,
governance and compliance and ensures that the necessary financial,
technical and human resources are in place for the Company to meet its
objectives. Our website includes a schedule of matters which have been
reserved for the main Board.
During FY 2025 there were eight Board meetings. There were also four
meetings of the Audit Committee, four meetings of the Remuneration
Committee and one meeting of the Nomination Committee. The table in
the Governance at a Glance section on page 66 shows attendance levels at
the Board and Committee meetings held during the year; the numbers in
brackets confirm how many meetings each Director was eligible to attend
during the year.
Except as noted in the table on page 66, full attendance was recorded for
all Directors in respect of all Board and Committee meetings held during
FY 2025, but where Directors are unable to attend a meeting (whether of the
Board or one of its Committees), they are provided with all the papers and
information relating to that meeting and are able to discuss issues arising
directly with the Chair of the Board or Chair of the relevant Committee.
There are eight Board meetings currently planned for FY 2026.
The Company Secretary’s responsibilities include ensuring good information
flows to the Board and between senior management and the Non-Executive
Directors. The Company Secretary is responsible, through the Chair, for
advising the Board on all corporate governance matters and for assisting the
Directors with their professional development. This includes regular corporate
governance and business issues updates, as well as the use of operational
site visits and the provision of external courses where required. The Company
Secretary facilitates a comprehensive induction for newly appointed Directors,
tailored to individual requirements and including guidance on the requirements
of, and Directors’ duties in connection with, the 2018 Code and the Companies
Act 2006 as well as other relevant legislation.
The appointment and removal of the Company Secretary is a matter
reserved for the Board.
Annual Report and Accounts 2025 Mitchells & Butlers plc86
Strategic Report
Introduction
Governance
Directors
The following were Directors of the Company during the year ended 27 September 2025:
Directors who served during the year Date appointed
Date of change of
role
Bob Ivell Independent Non-Executive Director
a
09/05/11 14/07/11
Interim Chair
a
14/07/11 26/10/11
Executive Chair 26/10/11 12/11/12
Non-Executive Chair 12/11/12 –
Amanda Brown Independent Non-Executive Director 04/07/22 –
Keith Browne
b
Non-Executive Director 22/09/16 –
Dave Coplin Independent Non-Executive Director 29/02/16 –
Eddie Irwin
b
Non-Executive Director 21/03/12 –
Tim Jones Chief Financial Officer 18/10/10 –
Josh Levy
c
Non-Executive Director 13/11/15 –
Jane Moriarty Independent Non-Executive Director 27/02/19 25/01/22
Senior Independent Director 25/01/22 –
Phil Urban Chief Executive 27/09/15 –
a. Independent while in the role specified.
b. Nominated shareholder representative of Elpida.
c. Nominated shareholder representative of Piedmont.
At the start of the year, the Board was made up of seven male and two
female Directors and there were no changes during the year, meaning that
at the year end, the Board consisted of seven male and two female Directors.
This is expected to change during FY 2026, when Tim Jones retires and is
replaced by Emma Harris.
The Executive Directors have service contracts. The Chair and each of the
Non-Executive Directors have letters of appointment. Copies of the respective
service contracts or letters of appointment of all the members of the Board
are available on the Company’s website. In addition, they are available for
inspection at the registered office of the Company during normal business
hours and at the place of the Annual General Meeting from at least 15 minutes
before, and until the end of, the meeting.
At the Company’s forthcoming Annual General Meeting in 2026 all the
Directors will be required to stand for annual re-election, in accordance
with the Company’s Articles of Association. Their biographical details as at
27 November 2025 are set out on pages 70 and 71, including their main
commitments outside the Company. In addition, Provision 18 of the 2018
Code requires that the papers accompanying the resolutions to elect or
re-elect directors, set out the specific reasons why the individual director’s
contribution is, and continues to be, important to the Company’s long-term
sustainable success and this information is included in the Notice of Meeting.
Provision 15 of the 2018 Code states that full-time executive directors should
not take on more than one non-executive directorship in a FTSE 100 company
or other significant appointments. The Mitchells & Butlers policy is that
Executive Directors may be permitted to accept one external Non-Executive
Director appointment with the Board’s prior approval and as long as this is
not likely to lead to conflicts of interest. During FY 2025, neither of the
Executive Directors held any such external directorship, nor did they hold
any other significant appointments, as a director or otherwise, and that
remains the case as at the date of this Annual Report.
Division of responsibilities between Chair and Chief Executive
In accordance with Provision 9 of the 2018 Code, the roles of Chair and
Chief Executive should not be exercised by the same individual.
The division of responsibilities between the Chair and the Chief Executive is
clearly established as required by Principle G of the 2018 Code and these are
set out in writing and have been agreed by the Board. In particular, it has been
agreed in writing that the Chair shall be responsible for running the Board
and shall provide advice and assistance to the Chief Executive. He also chairs
the Nomination Committee, is a member of the Remuneration Committee
and attends, by invitation, meetings of the Audit Committee. He also chairs
the Market Disclosure Committee, Corporate Responsibility Committee,
the Property Committee and the Pensions Committee.
It is also agreed in writing that the Chief Executive has responsibility for
all aspects of the Group’s overall commercial, operational and strategic
development. He chairs the Executive Committee (details of which appear
on page 90) and attends the Nomination, Remuneration and Audit Committees
by invitation, not necessarily for the entirety of such meetings depending
upon the subject matter. He is also a member of the Market Disclosure
Committee, the Property Committee and the Pensions Committee.
The segregation of responsibilities between the Chair and the Chief
Executive is set out in the Company’s Corporate Governance Compliance
Statement, which is available on our website, www.mbplc.com.
All other Executive Directors (currently just the Chief Financial Officer) and
all other members of the Executive Committee report to the Chief Executive.
Mitchells & Butlers plc Annual Report and Accounts 2025
87
Financial Statements Other Information
Corporate governance statement continued
Chair
Provision 9 of the 2018 Code provides that the Chair should, on appointment,
meet the independence criteria set out in Provision 10 of the 2018 Code.
Bob Ivell met these independence criteria on appointment.
Bob Ivell was appointed to the role of Executive Chair on 26 October 2011
on the departure of the then Chief Executive and reverted to the role of
Non-Executive Chair on 12 November 2012.
The Chair ensures that appropriate communication is maintained with
shareholders. He ensures that all Directors are fully informed of matters
relevant to their roles. An explanation of the Board’s view on the Chair’s
tenure is set out on page 85.
With effect from 1 January 2026, the Chair’s fee will remain unchanged.
Chief Executive
Phil Urban was appointed Chief Executive on 27 September 2015. He has
responsibility for implementing the strategy agreed by the Board and for the
executive management of the Group.
Senior Independent Director
Jane Moriarty was appointed Senior Independent Director on 25 January 2022.
The Senior Independent Director supports the Chair in the delivery of the
Board’s objectives and ensures that the views of all major shareholders and
stakeholders are conveyed to the Board. Jane Moriarty is available to all
shareholders should they have any concerns if the normal channels of Chair,
Chief Executive or Chief Financial Officer have failed to resolve them, or for
which such contact is inappropriate.
All Directors have the ability to raise any relevant views which they have with
the Senior Independent Director if they feel this is needed.
Non-Executive Directors
The Company has experienced Non-Executive Directors on its Board.
Josh Levy was appointed to the Board as a representative of one of the
Company’s largest shareholders, Piedmont, a member of the Odyzean
Group, and was therefore not regarded as independent in accordance with
the 2018 Code.
Eddie Irwin and Keith Browne were appointed to the Board as representatives
of another of the Company’s largest shareholders, Elpida, which is also
a member of the Odyzean Group, and were therefore not regarded as
independent in accordance with the 2018 Code.
There are currently three independent Non-Executive Directors on the
Board: Dave Coplin, Jane Moriarty and Amanda Brown.
An explanation regarding Dave Coplin’s independence as a Non-Executive
Director having served over nine years on the Board is set out on page 84.
Other than their fees, and reimbursement of taxable expenses which are
disclosed on page 115, the Non-Executive Directors received no remuneration
from the Company during the year.
There will be no increase in the fees of the Non-Executive Directors in
January 2026. This applies to the base fee, the fee paid to Non-Executive
Directors for chairing a Committee, the role of Senior Independent Director,
and the fee paid to Dave Coplin for his role as the Board representative for
‘employee voice’.
When Non-Executive Directors are considered for appointment, the Board
takes into account their other responsibilities in assessing whether they can
commit sufficient time to their prospective directorship. On average, the
Non-Executive Directors spend two to three days per month on Company
business, but this may be more depending on the circumstances from time
to time.
Board information and training
All Directors are briefed by the use of comprehensive papers circulated
in advance of Board meetings and by presentations at those meetings,
in addition to receiving minutes of previous meetings. Their understanding
of the Group’s business is enhanced by business-specific presentations and
operational visits to the Group’s businesses. Separate strategy meetings and
meetings with senior executives and representatives of specific functions,
brands or business units are also held throughout the year.
The training needs of Directors are formally considered on an annual basis
and are also monitored throughout the year with appropriate training being
provided as required, including corporate social responsibility and corporate
governance as well as the environmental impacts of the Company’s activities.
Independent advice
Members of the Board may take independent professional advice in the
furtherance of their duties and the Board has agreed a formal process for
such advice to be made available.
Members of the Board also have access to the advice and services of the
Group General Counsel and Company Secretary, the Company’s legal and
other professional advisers and its external auditor.
The terms of engagement of the Company’s external advisers and its
external auditor are regularly reviewed by the Group General Counsel and
Company Secretary.
Committees
The Audit, Remuneration, Nomination and Corporate Responsibility
Committees have written terms of reference approved by the Board, which
are available on the Company’s website www.mbplc.com. Those terms of
reference are each reviewed annually by the relevant Committee to ensure
they remain appropriate.
Audit Committee
Details of the Audit Committee and its activities during the year are included
in the Audit Committee report on pages 94 to 97 which is incorporated by
reference into this statement.
Remuneration Committee
Details of the Remuneration Committee and its activities during the year are
included in the Report on Directors’ remuneration on pages 98 to 118.
Annual Report and Accounts 2025 Mitchells & Butlers plc88
Strategic Report
Introduction
Governance
Nomination Committee
The Nomination Committee is responsible for nominating, for the approval
of the Board, candidates for appointment to the Board. It is also responsible
for succession planning for the Board and the Executive Committee and
reviewing the output of the Board effectiveness review. In compliance with
the disclosure requirements of Provision 23 of the 2018 Code, there is an
ongoing process of review of the make-up of the Board and for Board
succession, which is carried out by the Nomination Committee and led by
the Chair. The Nomination Committee engages external search agencies
when required and ensures that all candidates are identified and assessed
against pre-determined criteria. Gender balance is dealt with by the
Nomination Committee on a regular basis and includes assessment of
gender balance at senior management level.
The following were members of the Nomination Committee during the year:
Appointment
date
Member at
27/09/25
Bob Ivell (Chair) 11/07/13 Yes
Amanda Brown 04/07/22 Yes
Dave Coplin 29/02/16 Yes
Eddie Irwin 11/07/13 Yes
Jane Moriarty 27/02/19 Yes
In accordance with the disclosure requirement in Provision 23 of the 2018
Code, as at 27 September 2025, the gender balance for those in the senior
management team and their direct reports was split as to 43% female and
57% male. For this purpose, the senior management team comprises the
Executive Committee.
The gender balance of the Executive Committee (which includes two Board
members) is 70% male and 30% female. Further information on the Executive
Committee is given on page 90.
The Nomination Committee recognises the importance of diversity on the
Board, including nominating individuals with varied experiences, skills, and
expertise, to maintain an appropriate balance within the Company and the
wider Group. During FY 2025, the Nomination Committee held a meeting to
discuss the appointment of a new Executive Director and Chief Financial
Officer in FY 2026.
Appointment to the Board
During FY 2025, Tim Jones informed the Board of his intention to retire from
full-time work and step down from his role as an Executive Director and as
Chief Financial Officer of the Company. To find a successor, the Board and
the Nomination Committee initiated an executive search process. The Board
and the Nomination Committee received information on the competitive
market and the necessary skill set. A sub-group was formed to manage the
recruitment process and engage executive search consultants.
The sub-group collaborated with the executive search consultant to develop
a candidate brief, outlining the required competencies, experience, and
knowledge for the position as well as taking into account the Company’s
Diversity and Inclusion policy. Throughout the recruitment process, the
Board and the Nomination Committee were kept informed and had the
opportunity to participate in relevant meetings.
After thorough consideration, Emma Harris was recommended for
appointment to the role of an Executive Director and Chief Financial Officer
of the Company. This decision was based on Emma’s extensive experience in
senior roles within major consumer-focused retail businesses in the UK, and
her proven ability to create shareholder value through strategic thinking,
commercial acumen, and effective partnerships.
Diversity and Inclusion Steering Group and Board
Diversity Policy
The Company has a Diversity and Inclusion Steering Group which examines
the implementation of diversity within the Group. As referred to on page 84,
Dave Coplin has been identified by the Board as the Director with responsibility
for oversight of the Company’s Diversity and Inclusion arrangements.
The Board has approved a Board Diversity Policy, which was reviewed and
approved in October 2022. The key statement and objectives of that policy
are as follows:
Statement:
The Board recognises the benefits of diversity. Diversity of skills, background,
knowledge, international and industry experience, and gender, amongst
many other factors, will be taken into consideration when seeking to appoint
a new Director to the Board. Notwithstanding the foregoing, all Board
appointments will always be made on merit.
Objectives:
• The Board should ensure an appropriate mix of skills and experience
to ensure an optimum Board and efficient stewardship. All Board
appointments will be made on merit while taking into account individual
competence, skills and expertise measured against identified objective
criteria (including consideration of diversity).
• The Board should ensure that it comprises Directors who are sufficiently
experienced and independent of character and judgement.
• The Nomination Committee will continue to review what steps and
recruitment processes are appropriate for achieving diversity on the
Board with due regard being given to the recommendations set out in the
Davies Report, the Hampton-Alexander Review and the 2018 Code.
These will be reviewed on an annual basis.
Progress against the policy:
The Board continues to monitor progress against this policy. In terms of
Board diversity, at the start and end of FY 2025 there were nine Board
Directors, of which two were female (22%). Any future appointments will
always be made on merit and will continue to take into account diversity,
not only in terms of gender, but also in terms of the appropriate mix of skills
and experience. The assessment of the composition of the Board and its
Committees and the Chair’s tenure should be considered in the context
of the explanation already set out under the heading of ‘Board composition
and diversity’ on page 84.
The Company has an Equality, Diversity & Inclusion Policy (last updated in
September 2024), which applies in relation to employees of the Mitchells &
Butlers Group, and which can be found in the Value Creation story on page
37. The aim of the policy is to promote equal opportunities in employment
regardless of age, disability, gender reassignment, marital or civil partner
status, pregnancy or maternity, race (including colour, nationality, ethnic or
national origin), religion or belief, sex, or sexual orientation.
A detailed description of the duties of the Nomination Committee is set out
within its terms of reference which can be viewed at www.mbplc.com/
investors/business-conduct/board-committees/
Market Disclosure Committee
The EU Market Abuse Regulation (‘MAR’) which took effect in July 2016,
brought about substantial changes relating to announcements of material
information about the Company and its affairs, and relating to dealings in
shares or other securities by Directors and other senior managers, including
tighter controls on permitted ‘dealings’ during closed periods and the
handling of information relating to the Company. MAR requires companies
to keep a list of people affected and the previous compliance regime and
timeframe were enhanced.
As a result, a formal standing Committee of the Board was established, the
Market Disclosure Committee, which comprises the Chair, the Chief Executive,
the Chief Financial Officer and an independent Non-Executive Director.
Mitchells & Butlers plc Annual Report and Accounts 2025
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Financial Statements Other Information
Corporate governance statement continued
Corporate Responsibility Committee
A Corporate Responsibility Committee was established in June 2019 and its
purpose is to allow more executive, leadership and functional management
involvement in matters of corporate responsibility and sustainability. Its Terms
of Reference are on the Company’s website www.mbplc.com.
The Corporate Responsibility Committee comprises Bob Ivell (Chair), Eddie
Irwin, Jane Moriarty, Dave Coplin and Amanda Brown. The Chief Executive,
Phil Urban, is invited to attend regularly.
A multi-disciplinary operational and functional steering committee has been
identified and tasked with carrying out first level oversight of the work plan
and roadmap approved by the Committee in FY 2021.
Property Committee
The Property Committee reviews property transactions which have been
reviewed and recommended by the Portfolio Development Committee,
without the need for submission of transactions to the full Board. The Property
Committee agrees to the overall strategic direction for the management of
the Group’s property portfolio on a regular basis and may decide that a
particular transaction should be referred to the Board for consideration or
approval. The Property Committee comprises Bob Ivell (Committee Chair),
Phil Urban, Tim Jones, Josh Levy, Keith Browne, Jane Moriarty, Amanda
Brown and Nick Pinney.
Pensions Committee
The Board has established a Pensions Committee to supervise and manage
the Company’s relationship with its various pension schemes and their trustees.
The Pensions Committee members are Bob Ivell (Committee Chair), Tim Jones,
Phil Urban, Keith Browne and Josh Levy.
The buy-out of the Executive Plan completed in late 2024 as anticipated.
The focus of the Pensions Committee was to continue monitoring the
performance of the Mitchells & Butlers Pension Plan which moved to a full
buy-in with Standard Life during FY 2023. The current position eliminates all
remaining pensions risk in the Group and no further employer contributions
are therefore being made to either scheme. Over the course of the year
agreement was reached to use any surplus arising in the Mitchells & Butlers
Pension Plan to pay for employer contributions in the defined contribution
section of that Plan.
Executive Committee
The Executive Committee, which is chaired by the Chief Executive, consists
of the Executive Directors and certain other senior executives, namely Nick
Pinney (Group Property Director), Susan Martindale (Group HR Director),
Andrew Freeman (Group General Counsel and Company Secretary),
Chris Hopkins (Commercial and Marketing Director) and David Briggs,
Susan Chappell, Martin Nelson (replacing David Gallacher who retired in
September 2025) and Anna-Marie Mason (the Divisional Directors).
Chris Hopkins has made the decision to retire in January 2026 and Martie Smit
will take on the role of Commercial and Marketing Director.
The Executive Committee ordinarily meets, on average, 12 times per year
and has day-to-day responsibility for the running of the Group’s business.
It develops the Group’s strategy and annual revenue and capital budgets for
Board approval. It reviews and recommends to the Board any significant
investment proposals. This Committee monitors the financial and operational
performance of the Group and allocates resources within the budgets agreed
by the Board. It considers employment issues, ensures the Group has an
appropriate pool of talent and develops senior management workforce
planning and succession plans.
A note of the actions agreed by, and the principal decisions of, the Executive
Committee, is supplied to the Board for information in order that Board
members can keep abreast of operational developments.
General Purposes Committee
The General Purposes Committee comprises any two Executive Directors
or any one Executive Director together with a senior officer from an agreed
and restricted list of senior executives. It is always chaired by an Executive
Director. It attends to business of a routine nature and to administrative
matters, the principles of which have been agreed previously by the Board
or an appropriate Committee.
Portfolio Development Committee
The executive review of property transactions and capital allocation to
significant property matters such as site remodel and conversion plans and
the Company’s real estate strategy is carried out by the Portfolio Development
Committee. This is not a formal Board Committee but comprises the Chief
Executive, the Chief Financial Officer, the Group Property Director, and the
Group General Counsel and Company Secretary. It has delegated authority
to approve certain transactions up to agreed financial limits and, above
those authority levels, it makes recommendations to the Board or the
Property Committee.
Treasury Committee
The treasury operations of the Mitchells & Butlers Group are operated on
a centralised basis under the control of the Group Treasury department.
Although not a formal Board Committee, the Treasury Committee, which
reports to the Chief Financial Officer but is subject to oversight from the
Audit Committee and, ultimately, the Board, has day-to-day responsibility for:
• liquidity management;
• investment of surplus cash;
• funding, cash and banking arrangements;
• interest rate and currency risk management;
• guarantees, bonds, indemnities and any financial encumbrances
including charges on assets; and
• relationships with banks and other market counterparties such as credit
rating agencies.
The Treasury Committee also works closely with the Finance Department to
review the impact of changes in relevant accounting practices and to ensure
that treasury activities are disclosed appropriately in the Company’s accounts.
The Board delegates the monitoring of treasury activity and compliance to
the Treasury Committee. It is responsible for monitoring the effectiveness of
treasury policies and making proposals for any changes to policies or in respect
of the utilisation of new instruments. The approval of the Board, or a designated
committee thereof, is required for any such proposals.
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Introduction
Governance
Code of ethics
The Company has implemented business conduct guidelines describing
the standards of behaviour expected from those working for the Company
in the form of a code of ethics (the ‘Ethics Code’). The Ethics Code was
re-communicated to all employees in FY 2025 to ensure it was kept clearly
in focus. Its aim is to promote honest and ethical conduct throughout our
business. The Ethics Code requires:
• compliance with all applicable rules and regulations that apply to the
Company and its officers including compliance with the requirements
of the Bribery Act 2010;
• the ethical handling of actual or apparent conflicts of interest between
internal and external, personal and professional relationships; and
• that any hospitality from suppliers must be approved in advance by
appropriate senior management, with a presumption against its acceptance.
The Company takes a zero tolerance approach to bribery and has developed
an extensive Bribery Policy which is included in the Ethics Code. The Ethics
Code requires employees to comply with the Bribery Policy.
The Company also offers an independently-administered, confidential
whistleblowing hotline for any employee wishing to report any concern that
they feel would be inappropriate to raise with their line manager. All
whistleblowing allegations are reported to, and considered by, the Executive
Committee and a summary report (with details of any major concerns) is
supplied to, and considered by, the Audit Committee at each of its meetings.
Principle E and Provision 6 of the 2018 Code require the Board to be clear
how its approach to whistleblowing has changed from an Audit Committee-
led approach to a Board-led approach. Although the Audit Committee
continues to receive regular reports on whistleblowing activity, each set of
full Board papers also includes, as part of the report from the Group Risk
Director, the number and assessment of any whistleblowing reports received
and, where relevant, the actions taken in respect of reports which are, on
investigation, found to be credible.
The Board takes regular account of social, environmental and ethical matters
concerning the Company through regular reports to the Board and
presentations to the Board at its strategy meetings.
Directors’ training includes environmental, social and governance (‘ESG’)
matters and the Company Secretary is responsible for ensuring that
Directors are made aware of and receive regular training in respect of these
important areas. The Chief Executive, Phil Urban, is ultimately responsible
for ESG matters, which includes climate change reporting, which is dealt
with in the next section.
Climate change reporting
1. Reporting
Current mandatory reporting and disclosure requirements
The Task Force on Climate-related Financial Disclosures (‘TCFD’) was
established by the Financial Stability Board in 2015 and published its final
report in June 2017. The report sets out 11 recommended disclosures under
four pillars to promote better disclosure and these are set out below:
TCFD: four recommendations and eleven recommended disclosures
Recommendations
Governance Strategy Risk Management Metrics and Targets
Disclose the organisation’s
governance around climate-
related risks and opportunities
(‘CRO’).
Disclose the actual and potential
impacts of CRO on the
organisation’s businesses, strategy,
and financial planning where such
information is material.
Disclose how the organisation
identifies, assesses and manages
climate-related risks.
Disclose the metrics and targets
used to assess and manage relevant
CRO where such information
is material.
Recommended Disclosures
(a) Describe the Board’s
oversight of CRO.
(a) Describe the CRO the
organisation has identified
over the short, medium and
long term.
(a) Describe the organisation’s
processes for identifying and
assessing climate-related risks.
(a) Disclose the metrics used by
the organisation to assess CRO
in line with its strategy and risk
management process.
(b) Describe management’s role
in assessing and managing
CRO.
(b) Describe the impact of CRO on
the organisation’s businesses,
strategy and financial planning.
(b) Describe the organisation’s
processes for managing
climate-related risks.
(b) Disclose Scope 1, Scope 2 and,
if appropriate, Scope 3
greenhouse gas (‘GHG’)
emissions and the related risks.
(c) Describe the resilience of the
organisation’s strategy, taking
into consideration different
climate-related scenarios,
including a 2°C or lower
scenario.
(c) Describe how processes for
identifying, assessing and
managing climate-related
risks are integrated into the
organisation’s overall risk
management.
(c) Describe the targets used by
the organisation to manage
CRO and performance
against targets.
For FY 2025 the Company has continued to monitor climate-related risks and opportunities, in relation to TCFD and to oversee the delivery of strategy to
manage and measure the identified risks and opportunities as described in the FY 2024 disclosure. The results of this are set out on pages 46 to 51 of the
Strategic Report.
We plan to disclose Scope 3 emissions information on the finalisation of our updated pathway and targets to align with FLAG requirements.
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Corporate governance statement continued
UK Listing Rules
Climate-related disclosure UK Listing Rule 6.6.6R(8) is a continuing
obligation for listed commercial companies in annual reports for periods
commencing on or after 1 January 2021 and thereafter, and requires
companies to disclose:
• whether they have made disclosures consistent with the four
recommendations and 11 recommended disclosures set out in section C
of the TCFD Final Report in their annual financial report;
• where these disclosures can be found in the annual report; and
• a ‘comply or explain’ obligation to explain:
– if they have not included disclosures consistent with all of the TCFD’s
recommendations and/or recommended disclosures, which
disclosures they have not included and the reasons for not including
them; and/or
– why they have included some or all of the disclosures in a document
other than their annual report.
Where not all required TCFD disclosures have been provided, in addition to
explaining why, the annual report also needs to explain:
• the timeframe for compliance; and
• the steps the company is taking or plans to take to achieve compliance.
Institutional investor requirements
Institutional investors expect all listed companies to be reporting against all
four TCFD pillars and want those disclosures to be meaningful and will be
instructing their clients accordingly in relation to voting. They also expect
companies to include a statement in their annual report that the directors
have considered material climate-related matters when preparing and
signing-off the company’s accounts.
2. Actions taken by the Company
Executive ownership
The Board tasked Phil Urban with spearheading the Company’s approach to
tackling climate change reporting across the organisation since he also chairs
the Executive Committee so can ensure focus at Executive Committee level.
Strategy
The Board is mindful of the business impacts relevant to the sector, and due
consideration of such is included when considering changes made across the
business in relation to climate change obligations. Going forward, this important
issue will continue to form part of the considerations taken into account by
the Board when it is evaluating strategic decision and investment priorities.
Capital expenditure proposals submitted to the Board include appropriate
details on such aspects.
Governance
Climate change issues are discussed at Board level and the Board has
specifically requested the Corporate Responsibility Committee to focus on
ESG/sustainability matters. The Company’s required climate response/
transformation is a feature of agendas, with priority being given to ensuring
enough time is dedicated to the discussion. The Corporate Responsibility
Committee approved, and recommended to the Board, the Group’s
sustainability roadmap through which it identified and agreed how to
manage climate-related issues. These initiatives were first addressed in
FY 2022 when TCFD compliance became compulsory for the Company
and is ongoing.
Risk and scenario analysis
During FY 2022, the Company developed a rigorous climate change scenario
impact analysis. In FY 2023 we reassessed all of the climate-related risks
identified in the FY 2022 process, as well as an analysis of any emerging risks.
The established risk assessment framework was used to assess the materiality
of climate risks. Climate risk analysis is now part of the ongoing risk management
process, with identified risks reviewed at Risk Committee meetings as well as
the opportunity to present any emerging risks. No additional climate risks
have been added to the register during FY 2025.
The Audit Committee is tasked with ensuring it is satisfied that the scenarios
are sufficiently challenging, diverse and relevant, and also ensuring through
this process and the Risk Committee that its risk monitoring activity
appropriately addresses climate change risks for the Company. Further
details are set out on pages 46 to 51 of the Strategic Report.
Information, reporting and assurance
The Board considers it good practice to assess whether climate-related
management information is robust and fit for purpose. Pages 46 to 51 of the
Strategic Report set out the extent to which the Group relies on external
data, and the emissions table on page 79 of the Directors’ report relies on
external expertise, which is reviewed internally, and that is considered by
the Board to be reliable and credible.
The Risk Committee considers the findings of reporting reviews such as the
FRC’s climate change thematic review and during the year we have updated
our quantitative analysis of climate-related financial risks and opportunities
to reflect the most recent data on future weather patterns released by the
Met Office. An independent review was conducted by our internal auditors
of the policies and processes in place to support the calculation and reporting
of sustainability-related key performance indicators. There is currently no
external assurance to which the Company’s metrics are subjected, but this
aspect is being actively considered by the Risk Committee.
The Board is responsible for the Company’s internal risk management system,
in respect of which more details can be found in the ‘Risks and uncertainties’
section of this report, and in the following section of this statement.
Internal control and risk management
The Board has carried out a robust assessment of the Company’s emerging
and principal risks. The Board has completed its assessment, and has
presented a description of its principal risks, what procedures are in place to
identify emerging risks, and an explanation of how these are being managed
or mitigated, on pages 52 to 59.
The Board has overall responsibility for the Group’s system of internal control
and risk management and for reviewing its effectiveness. In order to discharge
that responsibility, the Board has established the procedures necessary to
apply the 2018 Code for the period under review and to the date of approval
of the Annual Report. Such procedures are in line with the Financial
Reporting Council’s ‘Guidance on Risk Management, Internal Control and
Related Financial and Business Reporting’ and are regularly reviewed by
the Audit Committee.
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Introduction
Governance
The key features of the Group’s internal control and risk management
systems include:
• Processes, including monitoring by the Board, in respect of:
i. financial performance within a comprehensive financial planning,
accounting and reporting framework;
ii. strategic plan achievement;
iii. capital investment and asset management performance, with detailed
appraisal, authorisation and post-investment reviews; and
iv. consumer insight data and actions to assess the evolution of brands and
formats to ensure that they continue to be appealing and relevant to the
Group’s guests.
• An overall governance framework including:
i. clearly defined delegations of authority and reporting lines;
ii. a comprehensive set of policies and procedures that employees are
required to follow; and
iii. the Group’s Ethics Code, in respect of which an annual confirmation
of compliance is sought from all corporate employees.
• The Risk Committee, a sub-committee of the Executive Committee,
which assists the Board, the Audit Committee and the Executive Committee
in managing the processes for identifying, evaluating, monitoring and
mitigating risks. The Risk Committee, which continues to meet regularly,
is chaired by the Group General Counsel and Company Secretary and
comprises Executive Committee members and other members of senior
management from a cross-section of functions.
The primary responsibilities of the Risk Committee are to:
i. advise the Executive Committee on the Company’s overall risk appetite
and risk strategy, taking account of the current and prospective operating,
legal, macroeconomic and financial environments;
ii. advise the Executive Committee on the current and emerging risk
exposures of the Company in the context of the Board’s overall risk
appetite and risk strategy;
iii. promote the management of risk throughout the organisation;
iv. review and monitor the Company’s capability and processes to identify
and manage risks;
v. consider the identified key risks faced by the Company and new and
emerging risks and consider the adequacy of mitigation plans in respect
of such risks; and
vi. where mitigation plans are regarded to be inadequate, recommend
improvement actions.
The Group’s risks identified by the processes that are managed by the
Risk Committee are described in the ‘Risks and uncertainties’ section on
pages 52 to 59.
More details of the work of the Risk Committee are included in the Audit
Committee report on pages 94 to 97.
• Examination of business processes on a risk basis including reports from
the internal audit function, known as Group Assurance, which reports
directly to the Audit Committee.
The Group also has in place systems, including policies and procedures, for
exercising control and managing risk in respect of financial reporting and the
preparation of consolidated accounts. These systems, policies and procedures:
i. govern the maintenance of accounting records that, in reasonable detail,
accurately and fairly reflect transactions;
ii. require reported information to be reviewed and reconciled, with
monitoring by the Audit Committee and the Board; and
iii. provide reasonable assurance that transactions are recorded as
necessary to permit the preparation of financial statements in accordance
with International Financial Reporting Standards (‘IFRS’) or UK Generally
Accepted Accounting Practice, as appropriate. Please also refer to the
Statement of Directors’ responsibilities in respect of the Annual Report
and Accounts, on page 80.
In accordance with the 2018 Code, during the year the Audit Committee
completed its annual review of the effectiveness of the Group’s risk
management and internal control systems, including financial, operational
and compliance controls.
The system of internal control is designed to manage, rather than eliminate,
the risk of failure to achieve business objectives and, as such, it can only
provide reasonable and not absolute assurance against material misstatement
or loss. In that context, in the opinion of the Audit Committee, the review did
not indicate that the system was ineffective or unsatisfactory. To the extent
that weaknesses in internal controls were identified, the Audit Committee
reviewed the audit findings, together with the remedial action plans that
were put in place, and sought confirmation that all actions were closed out
in a timely manner. Through this process, material audit findings were
presented to the Audit Committee, the necessary follow-up reviews were
completed and the results were reported to the Audit Committee, to ensure
appropriate mitigation plans had been actioned. Please refer to the Audit
Committee report, on pages 94 to 97.
The Audit Committee is not aware of any change to this status up to the date
of approval of this Annual Report.
With regard to insurance against risk, it is not practicable to insure against
every risk to the fullest extent. The Group regularly reviews both the type
and amount of external insurance that it buys with guidance from an external
independent broker, bearing in mind the availability of such cover, its cost
and the likelihood and magnitude of the risks involved and the mitigation
which insurance might provide.
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93
Financial Statements Other Information
Audit Committee report
During recent years, as the purpose and
effectiveness of external and internal audit
procedures came under increasing public
scrutiny, the Committee has ensured it has
maintained an appropriate level of engagement
with the Chief Financial Officer and the Group
Risk Director, other key individuals and their
teams who collectively provide an appreciation
and rigorous insight into how the Group
functions and reports. The Committee is very
grateful for the insight these interactions provide
and this, in turn, significantly assists the Committee
in executing its oversight role and ensuring
confidence in reporting to the wider Board.
Engagement with external auditors, internal auditors and
other third-party advisers
The Committee continued to engage formally, regularly and at an appropriate
level of detail with our external auditors, internal auditors (also externally
resourced) and other third-party advisers as necessary. This has enabled
the Committee to maintain an appropriate understanding of how our
auditors and advisers interact and test our comprehensive risk functions.
The Committee’s engagement during the auditing and advisory process
enables it to have confidence in their collective fieldwork conclusions.
The Committee also ensured that the Group provided adequate resources to
ensure that any additional non-audit services required during the year were
obtained, where necessary, and the Financial Reporting Council’s (‘FRC’)
evolving reporting requirements were adhered to.
Effectiveness of internal controls and Group assurance and
risk function
The above efforts provided the Committee with a clear and detailed
understanding of the principal financial and operational risks throughout
the period (please also refer to the Group’s risks and uncertainties, detailed
on pages 52 to 59). The Committee continued to focus on challenging the
effectiveness of internal controls, the robustness of assurance and risk
management processes and in assessing the importance of, and acting as
required upon, all reported information received from our external and
internal auditors and third-party advisers.
The Committee remains committed to maintaining an open and
constructive dialogue on relevant audit matters with all shareholders.
Therefore, should you have any comments or questions on any aspects of
this report, or indeed the wider financial statements, may I respectfully ask
you to please email myself, care of Adrian Brannan, Group Risk Director,
at company.secretariat@mbplc.com
“On behalf of the Board, I present
the report of the Audit Committee
for the financial period ended
27 September 2025.”
Jane Moriarty
Chair of the Audit Committee
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Strategic Report
Introduction
Governance
Remit and membership of the Audit Committee
The main purpose of the Audit Committee is to review and maintain
oversight of the Group’s corporate governance, particularly with respect
to financial reporting, internal control and risk management. The Audit
Committee’s responsibilities also include:
• reviewing the processes for detecting fraud, misconduct and internal
control weaknesses;
• reviewing the effectiveness of the Group Assurance function; and
• overseeing the relationship with the external and internal auditors and
other third-party advisers.
At the date of the 2025 Annual Report, the Audit Committee comprised
three independent Non-Executive Directors: Jane Moriarty (Chair of the
Audit Committee), Amanda Brown and Dave Coplin. The Board notes that
Dave Coplin has served more than nine years on the Board and so may
not be considered independent under Provision 10 of the 2018 Code.
However, the Board considers that his performance as a non-executive
director continues to be effective and that he remains independent in character
and judgement. The Board considers that there are no relationships or
circumstances in place which would be likely to affect, or might appear to
affect, his judgement in the exercise of his role. In accordance with 2018
Code Provision 24 the Board considers that Jane Moriarty has significant,
recent and relevant financial experience. Biographies of all of the members
of the Audit Committee, including a summary of their respective experience,
appear on pages 70 and 71.
The Audit Committee met at least quarterly during FY 2025. In each case,
appropriate papers were distributed to the Committee members and other
invited attendees, including, where and to the extent appropriate,
representatives of the external audit firm, the internal Group Assurance
function and other third-party advisers.
When appropriate, the Audit Committee augments the skills and experience
of its members with advice from internal and external audit professionals,
for example, on matters such as developments in financial reporting. Audit
Committee meetings are also attended, by invitation, by other members of
the Board including the Chair of the Company, the Chief Executive and the
Chief Financial Officer, the Group General Counsel and Company Secretary,
the Group Risk Director and representatives of the external auditor, KPMG
LLP. The Audit Committee also has the opportunity to meet privately with
the external auditor not less than twice a year, without any member of
management present, in relation to audit matters.
The remuneration of the members of the Audit Committee is set out in the
Report on Directors’ remuneration on page 115.
Summary terms of reference
A copy of the Audit Committee’s terms of reference is publicly available
within the Investor section of the Group’s website: www.mbplc.com/pdf/
audit_committee_terms.pdf
The Audit Committee’s terms of reference were approved by the
Committee and adopted by the Board in 2013. Those terms of reference
specifically provide that they will be reviewed annually. They have been
reviewed and updated as appropriate each year since and no changes
were felt to be needed when they were reviewed in September 2025.
Accordingly, in FY 2025 no material changes were made to the terms of
reference of the Audit Committee, but the work of the Audit Committee
will be kept under review with the expectation that any such matters which
come to light are included in the next annual review.
The Audit Committee is authorised by the Board to review any activity within
the business. It is authorised to seek any information it requires from, and
require the attendance at any of its meetings of, any Director, any member of
management and any employees, who are expected to co-operate with any
request made by the Audit Committee.
The Audit Committee is authorised by the Board to obtain, at the Group’s
expense, external legal or other independent professional advice and secure
the attendance of outsiders with relevant experience and expertise, if it
considers this necessary.
The Chair of the Audit Committee reports to the Board meeting following
each Committee meeting on the Committee’s work and the Board receives
a copy of the minutes of each meeting.
The role and responsibilities of the Audit Committee are to:
• review the Group’s public statements on internal control, risk management
and corporate governance compliance;
• review the Group’s processes for detecting fraud, misconduct and control
weaknesses and to consider the Group’s response to any such occurrence;
• review management’s evaluation of any change in internal controls over
financial reporting;
• review with management, and the external auditor, Group financial
statements required under UK legislation before submission to the Board;
• establish, review and maintain the role and effectiveness of the internal
audit function, Group Assurance and the risk function, whose objective is
to provide independent assurance over the Group’s significant processes
and controls, including those in respect of the Group’s principal risks;
• assume direct responsibility for the appointment, compensation,
resignation, dismissal and the overseeing of the external auditor,
including review of the external audit, its cost and effectiveness;
• pre-approve non-audit work to be carried out by the external auditor and
the fees to be paid for that work, together with the monitoring of the
external auditor’s independence;
• oversee the process for dealing with complaints received by the Group
regarding accounting, internal accounting controls or auditing matters
and any confidential, anonymous submission by employees of concerns
regarding questionable accounting or auditing matters; and
• adopt and oversee a specific Code of Ethics for all employees which is
consistent with the Group’s overall statement of business ethics.
Key activities of the Audit Committee
Audit matters are reviewed at quarterly Audit Committee meetings
throughout the year at which detailed reports are presented for review.
The Audit Committee commissions reports from external advisers, the
Group Risk Director or Group management, either after consideration of
the Group’s key risks or in response to developing issues.
During the year, in order to fulfil the roles and responsibilities of the Audit
Committee, the following matters were considered:
• the suitability of the Group’s accounting policies and practices;
• half year and full year financial results;
• the scope and cost of the external audit;
• the external auditor’s full year report;
• the reappointment of the external auditor, KPMG LLP;
• any non-audit work carried out by the auditor and trends in the non-audit
fees in accordance with the Committee’s policy to ensure the
safeguarding of audit independence;
• the co-ordination of the activities and the work programmes of the
internal and external audit functions;
• the arrangements in respect of Group Assurance including its resourcing,
external support, the scope of the annual internal audit plan for FY 2025,
the level of achievement of that plan and the scope of the annual internal
audit plan for FY 2026;
• periodic internal control and assurance reports from Group Assurance;
• the Group’s risk management framework for the identification and
control of key risks, its risk and assurance mitigation plan and the annual
assessment of effectiveness of controls;
• review of the Corporate Viability Disclosure on pages 60 and 61;
• compliance with the Group’s Code of Ethics;
• corporate governance developments;
• the status of material litigation involving the Group; and
• reports on allegations made via the Group’s whistleblowing procedures
and the effectiveness of these procedures, including a summary of
reports received during FY 2025.
Mitchells & Butlers plc Annual Report and Accounts 2025
95
Financial Statements Other Information
Audit Committee report continued
Disclosure of significant and other judgements
The Audit Committee has reviewed the key judgements applied in the
preparation of the consolidated financial statements, which are described
in the relevant accounting policies and detailed notes to the consolidated
financial statements on pages 133 to 182.
The Audit Committee’s review included consideration of the following areas
and key accounting judgements:
• Going concern – the headroom on the covenants across both the secured
and unsecured estates and Group liquidity have been reviewed in detail
by management and assessed by the Audit Committee. The Corporate
Viability Disclosure is on pages 60 and 61.
• Property, plant and equipment valuation – the assumptions used by
management to value the long leasehold and freehold estate including:
estimated fair maintainable trading levels; brand multiples and use of
spot valuations, to ensure a consistent valuation methodology is in place.
The revaluation methodology is determined by using management
judgement, with advice taken from third-party valuation experts.
• Impairment of short leasehold properties and right-of-use assets
and goodwill – Short leasehold properties, right-of-use assets, allocated
corporate assets and unlicensed land and buildings and goodwill are
held at cost less depreciation and impairment. Impairment includes
management judgement to determine site level profit and cash flow
forecasts, and the appropriate allocation of overhead costs to those cash
flows. In addition, the value in use calculation includes estimations of the
discount rate and long-term growth rate.
• Separately disclosed items – judgement is used to determine those
items which should be separately disclosed to allow an understanding of
the adjusted trading performance of the Group. Separately disclosed
items are explained and analysed in note 2.2 of the financial statements
on pages 136 and 137. This judgement includes assessment of whether
an item is of sufficient size or of a nature that is not consistent with normal
trading activities.
• Pension – judgement is used to determine the value of pension surplus
that has been recognised estimating the expected value of the surplus to
the Company.
Effectiveness of internal audit
The Audit Committee is responsible for monitoring and reviewing the
effectiveness of the Group’s internal audit function. The Audit Committee
meets regularly with management and with the Group Risk Director and
the internal auditor to review the effectiveness of internal controls and
risk management and receives reports from the Group Risk Director on
a quarterly basis.
During each financial year, the Audit Committee completes its annual review
of the effectiveness of the Group’s system of internal controls and internal
audit function, including financial, operational, compliance and risk
management systems.
The annual internal audit plan is approved by the Audit Committee and is
kept under review on a regular basis, by the Group Risk Director, in order to
reflect the changing business needs and to ensure new and emerging risks
are considered. The Audit Committee is informed of any amendments made
to the internal audit plan on a quarterly basis. The FY 2025 internal audit plan
was developed through a review of formal risk assessments, in conjunction
with the Risk Committee and the Executive Committee, together with
consideration of the Group’s key business processes and functions that could
be subject to audit. A similar approach has been employed in relation to the
FY 2026 internal audit plan. The principal objectives of the internal audit plan
for FY 2025 were, and remain for FY 2026:
• to provide confidence that existing and emerging key risks are being
managed effectively;
• to confirm that controls over core business functions and processes are
operating as intended; and
• to confirm that major projects and significant business change programmes
are being adequately controlled.
Findings from all audit reports issued by the Group Assurance function are
reviewed by the Audit Committee. Internal audit recommendations are closely
monitored from implementation through to closure via a recommendation
tracking system, which efficiently assists the overall monitoring of internal
audit recommendations to ensure these are successfully implemented in
a timely manner. A summary of the status of the implementation of internal
audit recommendations is made every period to the Executive Committee
and Board and quarterly to the Audit Committee.
Risk management framework
As disclosed in the ‘Risk and uncertainties’ section on pages 52 to 59 the
Risk Committee continues to meet on a quarterly basis to review the key risks
facing the business. Membership of the Risk Committee, which includes
representation from each of the key business functions, is detailed below:
• Group General Counsel and Company Secretary (Chair of the
Risk Committee)
• Chief Financial Officer
• Commercial and Marketing Director
• Divisional Director (Operations)
• Group HR Director
• Director of Business Change & Technology
• Group Risk Director
• Head of Legal
• Head of Safety
Key risks identified are reviewed and assessed on a quarterly basis in terms
of their likelihood and impact, and are measured on the Group’s ‘Key Risk
Heat Map’, in conjunction with associated risk mitigation plans. In addition,
the Risk Committee review includes an assessment of the material relevance
of emerging risks and the continued relevance of previously identified risks.
During FY 2025, Risk Committee meetings continued to include a cross-
functional, detailed review of the Group’s key risks. This process continues to
prove to be effective and adds value to the continued development and
progression of the Group’s approach to evaluating new and existing risks,
supported by robust mitigation plans.
Actions arising from Risk Committee meetings are followed up by the Group
Risk Director. The Audit Committee reviews the Risk Committee minutes in
addition to undertaking a quarterly review of the Group’s ‘Key Risk Heat Map’.
Annual Report and Accounts 2025 Mitchells & Butlers plc96
Strategic Report
Introduction
Governance
Confidential reporting
The Group’s whistleblowing policy enables staff, in confidence, to raise
concerns about possible improprieties in financial and other matters and to
do so without fear of reprisal. Details of the policy are set out in the Group’s
Code of Ethics. The Audit Committee receives quarterly reports on
whistleblowing incidents and remains satisfied that the procedures in place
are satisfactory to enable independent investigation and follow up action
of all matters reported. The Board also receives a report on whistleblowing
in the Group General Counsel and Company Secretary’s regular report to
Board meetings.
External auditor appointment
Following shareholder and Board approval, KPMG LLP was appointed as the
auditor in 2022, following a formal tender process in 2020 to ensure the
continued objectivity, independence and value for money of the statutory
audit. KPMG LLP is therefore responsible for undertaking the FY 2025 audit.
The Audit Committee has considered the guidance in relation to rotation
including the proposed transition rules which will be considered when
recommending the appointment of the auditor in future years. The Group
has complied throughout FY 2025 with the provisions of The Statutory Audit
Services for Large Companies Market Investigation (Mandatory Use of
Competitive Tender Processes and Audit Committee Responsibilities)
Order 2014.
External auditor’s independence
The external auditor should not provide non-audit services where it might
impair their independence or objectivity to do so. The Audit Committee has
established a policy to safeguard the independence and objectivity of the
Group’s external auditor. That policy was reviewed in FY 2025 and a copy of
it is appended to the Audit Committee’s terms of reference and is available
on the Group’s website.
Pursuant to that policy, services that have been pre-approved by the Audit
Committee (e.g. covenant reporting) do not exceed in any year more than
70% of the average audit fee paid to that audit firm over the past three years,
unless prior approval has been obtained from the FRC.
The Audit Committee remains confident that the objectivity and independence
of the external auditor are not in any way impaired by reason of the non-audit
services which they provide to the Group.
That policy also includes an extensive list of services which the audit firm may
not provide or may only provide in very limited circumstances where the Group
and the audit firm agree that there would be no impact on the impartiality of
the external audit firm.
Details of the remuneration paid to the external auditor, and the split
between audit and non-audit services, are set out in note 2.3 of the financial
statements on pages 137 to 139.
External audit annual assessment
The Audit Committee assesses annually the qualification, expertise,
resources and independence of the Group’s external auditor and the overall
effectiveness of the audit process. The Chief Financial Officer, Group General
Counsel and Company Secretary, Chair of the Audit Committee and Group
Risk Director meet with the external auditor to discuss the audit, significant
risks and any key issues included on the Audit Committee’s agenda during
the year.
Fair, balanced and understandable statement
One of the key governance requirements of the Annual Report and Accounts
is for the report and accounts, taken as a whole, to be fair, balanced and
understandable, and that they provide the information necessary for
shareholders to assess the Group’s position, performance, business model
and strategy. Therefore, upon review of the financial statements, the Audit
Committee and the Board have confirmed that they are satisfied with the
overall fairness, balance and clarity of the Annual Report and Accounts,
which is underpinned by the following:
• review of the formal review processes at all levels to ensure the Annual
Report and Accounts are factually correct;
• clear guidance being issued to all contributors to ensure a consistent
approach; and
• formal minutes of the Year End Working Group comprised of relevant
internal functional representatives and appropriate external advisers.
Jane Moriarty
Chair of the Audit Committee
27 November 2025
Mitchells & Butlers plc Annual Report and Accounts 2025
97
Financial Statements Other Information
Report on Directors’
remuneration
“I am pleased to present the
Directors’ Remuneration
Report in respect of the
financial period which ended
on 27 September 2025, during
which we have maintained our
outperformance against the
market, despite the sector facing
significant challenges.”
Amanda Brown
Chair of the Remuneration Committee
Dear Shareholder,
I am pleased to present this year’s Directors’
Remuneration Report on behalf of the
Remuneration Committee (‘the Committee’).
The report provides context and insight into our
pay arrangements for Executive Directors and
Non-Executive Directors, including the assessment
of FY 2025 performance and pay. The report,
together with this letter, will be put to an advisory
vote at the 2026 AGM.
87.7
Best ever employee
engagement score
4.60
Record guest review score
£330m
Adjusted Operating Profit
a
3%
Average market
outperformance over
the year
4.3%
Like-for-like sales growth
Annual Report and Accounts 2025 Mitchells & Butlers plc98
Strategic Report
Introduction
Governance
2025 remuneration in the context of our business performance
and outcomes for our key stakeholders
The UK hospitality sector continues to face significant challenges, with
increased wage costs, higher employer national insurance contributions and
increasing food inflation. In spite of these external pressures the team have
continued to find innovative ways to improve performance and mitigate costs,
whilst supporting employees looking after guests and investing in the business.
As a result of these actions Mitchells & Butlers’ performance has again been
very strong, with like-for-like sales outperforming the market consistently
throughout the year, a pattern of outperformance that has been maintained
for a number of years. Sales performance was particularly good over the
festive period and continued to be resilient throughout the remainder of the
year, with our diverse portfolio of brands enabling us to grow sales across the
segments of the market. Overall like-for-like sales increased by 4.3%, and our
market outperformance over the year was c. 3%
b
. Despite the significant
increase in costs, our Ignite programme has once again been instrumental
to our ability to mitigate the cost pressures the business has faced with over
40 initiatives underway, focusing on activity to improve sales or better control
costs. It is therefore particularly pleasing that despite the considerable cost
headwinds, we have been able to improve our margins by 0.2 ppts. The
business is generating strong cash flows and has a strengthening balance
sheet, with net debt continuing to fall. Our strong financial foundations mean
that we have been able to increase the pace of our capital plan this year with
over 200 conversions and remodels being completed and delivering record
returns. As a result, these factors in combination have enabled us to deliver an
Adjusted Operating Profit in line with the top end of consensus expectations.
Last year I explained how pleased I was that as well as delivering financial
results, we had also scored highly on all stakeholder measures. I am therefore
delighted that 2025 has seen a further increase in Guest Health, Employee
Engagement and Safety scores, further evidencing the clear link between
engaged employees and satisfied guests and the financial performance of
the business. The business continues to work towards our sustainability
targets which focus on reducing Scope 1, 2 & 3 emissions, to zero by 2040,
to have zero operational waste into landfill by 2030 and for a 50% reduction
in food waste by 2030. There are a number of initiatives underway to deliver
these targets, with the roll out of solar panels, electrification of kitchens and
the introduction of remote energy consumption controls being examples
that have been undertaken during FY 2025.
The coming year will see a further material increase in cost headwinds,
over and above the level experienced in FY 2025, particularly driven by
higher levels of food inflation, and as a result we expect cost inflation to be
c. £130m. However, as noted above and throughout the Annual Report, the
business has good momentum, a healthy balance sheet and a proven track
record of overcoming cost challenges successfully through our range of
Ignite initiatives, the strength of our portfolio of brands and an ambitious
capital plan.
The Committee has, as usual, considered executive remuneration in the light
of outcomes for the wider workforce, our shareholders and other stakeholders
by taking a fair and balanced approach to remuneration.
Remuneration in FY 2025
Annual Bonus
Financial measures – Adjusted Operating Profit (outcome 53.7%
out of 70%)
At the time the financial targets were set, the macroeconomic outlook was
more settled with some cost inflation beginning to flatten, but wage costs
anticipated to rise. Challenging financial targets were set by the Committee
taking into account all of these factors. Labour cost increases proved to be
even higher than anticipated, driven notably by the increase in employer
national insurance contributions which was announced after these targets
had already been set. To deliver an on-target performance, the business
needed to offset at least £100m of cost inflation through sales growth and
improved cost efficiencies.
Total sales across the period were £2,711m, an increase of 3.9% and
on a like-for-like basis sales increased by 4.3%
a
. Our sales performance
outperformed the market
b
consistently over the year, and FY 2025
represented the ninth year in which the business has delivered sales
ahead of the market.
Adjusted Operating Profit over the year was £330m; an increase of 5.8%
on the prior year, and near the top of the range of consensus forecasts
which had already been increased through the year. This performance was
ahead of the target set by the Committee (£325m) driven by a good sales
performance over the year, improved cost efficiencies and excellent returns
from our capital plan.
Non-financial measures – (outcome 30% out of 30%)
The non-financial measures encompass Guest Health, Employee
Engagement and Safety.
Guest Health performance is measured as a combination of online review
scores and guest complaints. Over the year our online review scores have
averaged 4.60, representing a best ever score for this measure. Record low
scores have also been achieved for guest complaints, which are measured
as a ratio of complaints received for every 1,000 meals served. The average
number of complaints received per 1,000 meals over the year was just 0.52.
This combined performance has resulted in a maximum payment for the
guest element.
Employee engagement is measured at two points during the year, in
February and June, giving two different reference points to measure
employee satisfaction. This year around two thirds of employees completed
a survey and the overall score across the two surveys was 87.7, a record high
for employee engagement, and an increase of almost two points on the prior
year score, which itself was a record score. As a result a maximum payment
is due for this element.
Our safety measure encompasses four areas of safety; Food Hygiene
(as measured by the National Food Hygiene Rating System), Food Practices,
Allergens and Fire Safety. The measure assesses the percentage of our
businesses that have scored at least a 4 or 5 rating in each of the elements in
a combined score. The target set at the start of the year was for an overall
performance of 97.5% of all ratings to be at a 4 or 5. The year end performance
was 98% resulting in an on-target/maximum payment for this element.
a. The Directors use a number of alternative performance measures (APMs)
that are considered critical to aid the understanding of the Group’s performance.
Key measures are explained on pages 189 to 191 of this Report.
b. As measured by the CGA Business Tracker.
Mitchells & Butlers plc Annual Report and Accounts 2025
99
Financial Statements Other Information
Final Bonus Outcome
The Committee undertook a quality of earnings assessment to ensure that
the overall bonus outcome was fully representative of the overall performance
of the business across the financial period. The bonus outcome reflects
another strong performance over the financial period, driven by continued
sales growth ahead of the sector as a whole. This strong sales performance,
combined with improved cost efficiencies and excellent returns from our
capital plan, enabled the business to grow profits at a slightly better rate
than expected.
We are proud of the performance over the year, which was achieved
through hard work and in a manner which is consistent with the experience
of all stakeholders, including that of our employees and customers as
evidenced above.
In taking all these factors into account, the Committee was satisfied that
the overall formulaic outcome against our targets was consistent with our
performance over the year and as such no discretion was exercised when
determining the resultant annual bonuses. As a result of this review of
performance, bonuses of 83.7% of base pay (which is also 83.7% of the
maximum) were awarded to our CEO and CFO respectively.
FY 2023 RSP Vesting
During FY 2023, share awards were made to Phil Urban and Tim Jones
under the Restricted Share Plan (‘RSP’) to the value of 100% of their
respective salaries.
Vesting of the RSP was subject to the satisfactory assessment of performance
against three qualitative underpins, discussed in further detail on page 111.
The Committee is satisfied that these have been met and, as such, the 2023
RSP award will vest on 1 December 2025.
In addition, the Committee reviewed whether the Executive Directors might
unduly benefit from a windfall gain on these awards. As explained at the date
of grant, the prevailing share price used for the 2023/25 RSP award reflected
the challenging trading conditions facing the business at that time. The fall in
share price was due to overall market sentiment about the industry and not
directly linked to the underlying performance of the business. The increase
in value over the three-year vesting period for the 2023/25 RSP reflects
the strong underlying performance of the business in spite of these
difficult trading conditions. The Mitchells & Butlers’ share price has also
outperformed the wider market and peers in the FTSE All Share Travel and
Leisure index. The Mitchells & Butlers’ share price has increased by 24.8%
p.a. over the period whereas the FTSE All Share Travel and Leisure index has
grown by 13.8% p.a. and the FTSE 250 by 5.8% p.a. The share price also did
not follow the typical short-term ‘V-shape’ recovery that is often associated
with ‘windfall gains’ and instead has recovered over time, reflecting strong,
sustained performance driven by management actions. The Committee also
assessed the share prices at which prior RSP awards have been granted and
vested over the last five years and took into consideration the value gained
and lost by participants over this period. After careful consideration the
Committee concluded that participants will not benefit from a windfall gain
on the FY 2023 RSP awards and therefore has determined that no
adjustment is required.
Board changes
As announced in October 2025, during FY 2025, Tim Jones indicated to the
Board his intention to retire from full time work and step down as CFO, and
from the Board, in the summer of 2026. The Committee has determined that
Tim will be treated as a good leaver and full details of his leaving arrangements
will be disclosed in the FY 2026 remuneration report. Tim has been
fundamental to the success of Mitchells & Butlers over his 15 year tenure
and will be missed by all of his colleagues.
We were pleased to announce the appointment of Emma Harris as CFO with
the expectation that she will join the business in time to enable a smooth
handover from Tim. Emma is currently Finance Director – Food, Retail &
Property at Marks and Spencer Group plc. She brings extensive experience
from working in a variety of senior roles in major consumer-focused retail
businesses in the UK, with a track record of creating shareholder value
through partnering, commerciality and critical thinking.
Details of her remuneration on joining the business are shown in the table
below. Her remuneration package has been set in line with the Directors’
Remuneration Policy approved by shareholders in 2024 and in setting the
package the Committee took account of a number of factors, including her
experience, skill set and appropriate market benchmarks.
Element Quantum
Salary £520,000
Pension & Benefits Pension contribution aligned with that of the
wider workforce at 4% of salary.
Benefits in line with the Remuneration Policy.
Annual Bonus Maximum opportunity of 100% of salary. For
FY 2026, the maximum opportunity will be
pro-rated to reflect Emma’s period in the role.
In line with the Remuneration Policy, 50% of the
award to be deferred as shares and released in
two equal tranches, after 12 and 24 months.
Performance Share
Plan
Maximum opportunity of 200% of salary.
The award will be pro-rated to reflect Emma’s
period in the role.
Buy-out Awards Emma will also receive buy-out awards for
remuneration which will be forfeited when she
leaves her current employer. These awards will
remain subject to performance conditions,
where appropriate, and will not exceed the value
of the forfeited awards as at the time of grant.
The form of the buy-out awards (cash or shares)
will match the form of the corresponding
forfeited award and where the forfeited award
was subject to performance conditions, the
buy-out award will also be subject to
performance conditions. This will be based on
either the Marks and Spencer Group plc
performance or Mitchells & Butlers’
performance depending upon the vesting
timeline of the forfeited award. Mitchells &
Butlers’ shares acquired from a buy-out award
will be subject to the shareholding and deferral
requirements of the current Policy.
Full details of any buy-out awards will be fully
disclosed in the FY 2026 remuneration report
and at the time of grant.
Report on Directors’ remuneration continued
Annual Report and Accounts 2025 Mitchells & Butlers plc100
Strategic Report
Introduction
Governance
Remuneration for FY 2026
Fixed Pay (Base Pay, Pensions and Benefits)
In reviewing Executive Directors’ salaries, the Committee took account of
market positioning and the level of increases applied to Executive Directors
in other organisations, but most importantly felt that the increases applied to
Executives should be below that of other colleagues and especially those in
frontline positions.
Overall pay increases have been 6.7% over the year with hourly paid frontline
employees who are typically the lowest paid employees in the Group, seeing
the largest increases.
With effect from 1 January 2026 Phil Urban’s salary will increase to £647,600
(3.5%) and Tim Jones’s to £541,500 (3.5%). As Tim is expected to work until
summer 2026, the majority of the financial year, he is eligible for a salary increase.
As noted above, on appointment Emma Harris’s salary will be £520,000.
Executive Directors’ pension contributions remain aligned with that of the
wider workforce at 4%.
There are no changes to the benefits available to Executive Directors.
Annual Bonus
The Committee believes that the annual bonus scheme for FY 2025 was
successful in driving the right behaviours across the business, and as such
has determined that the annual bonus scheme for FY 2026 will be unchanged.
The maximum opportunity will remain at 100% of salary for our Executive
Directors. Tim Jones’s annual bonus will be pro-rated based on his time in
employment in the financial year, with 50% deferred into shares in line with
normal practice. As noted above, Emma Harris’s bonus opportunity will also
be pro-rated to reflect her time in the role.
Performance Share Plan (‘PSP’) award FY 2026 to FY 2028
A PSP award is due to be made in respect of the FY 2026 to FY 2028
performance period. No changes are proposed to the opportunity level or
the measures and weightings for Executive Directors. Tim Jones’s PSP award
will be pro-rated based on his time in employment from the start of the
performance period.
Therefore, the overall opportunity for Executive Directors will remain at
200% of base salary and the measures and weightings (as a percentage of
maximum) will apply as follows: Operating Cashflow (70%), Earnings Per
Share (‘EPS’) growth (20%), and a sustainability measure based on reduction
in Scope 1, 2 & 3 emissions (10%). Full details of the proposed performance
measures and targets are set out on page 112.
In conclusion, FY 2025 has been another strong year for the business in what
is a challenging market with an uncertain outlook. The Committee is satisfied
that the Remuneration Policy approved at the 2024 AGM is operating as
intended and supports appropriate outcomes for the performance of the
business over the year, whilst being cognisant of the wider economic context
including appropriate governance considerations.
The remainder of the report sets out in more detail our overall approach to
Executive Remuneration, and how this aligns to the strategy of the business
and the interests of our stakeholders. I look forward to your continued
engagement and feedback and hope you will join the Board in supporting
our FY 2025 outcomes at the 2026 AGM.
Remuneration Policy renewal and approach for FY 2026
Our Remuneration Policy was approved by our shareholders at the 2024
AGM, with a vote in favour of more than 95%. During the course of FY 2026
we will be reviewing our Policy, ahead of its renewal at the 2027 AGM, to
ensure that it continues to support our strategic priorities and provides an
appropriate level of reward to attract and retain high-calibre individuals,
taking into account market positioning and the strong performance and
growth of the business over the last few years. We will engage with stakeholders
during FY 2026 in relation to our proposed approach to the new Policy in
advance of its finalisation.
Amanda Brown
Chair of the Remuneration Committee
27 November 2025
Mitchells & Butlers plc Annual Report and Accounts 2025
101
Financial Statements Other Information
2016 2017 2018 2019 2020 2021 2022 2023 2024 2025
£613
£89
£15
£509
£624
£91
£15
£518
£759
£89
£15
£509
£146
£1,925
£91
£16
£516
£423
£879
£553
£70
£15
£468
£624
£76
£14
£534
£807
£64
£15
£546
£182
£1,578
£40
£15
£581
£390
£552
£1,804
£599
£565
£26
£15
£599
£
2,298
£518
£1,120
£25
£16
£619
£515
£75
£15
£425
£526
£76
£16
£434
£638
£75
£16
£425
£122
£1,392
£76
£16
£432
£354
£514
£465
£59
£15
£391
£524
£63
£14
£447
£677
£53
£15
£457
£152
£1,511
£501
£472
£22
£15
£501
£1
,924
£433
£937
£21
£15
£518
£1,324
£462
£326
£34
£16
£486
2016 2017 2018 2019 2020 2021 2022 20242023 2025
Remuneration at a glance
Report on Directors’ remuneration continued
Remuneration key:
Base pay Benefits Pension Annual bonus Long-term incentives
Phil Urban
Chief Executive
(£’000)
Tim Jones
Chief Financial Officer
(£’000)
FY 2025 Performance
The following ‘Remuneration at a Glance’ section provides a short summary that demonstrates that our overall approach to Executive Remuneration has
been and continues to be measured, well balanced and appropriate.
Summary of Executive Directors’ Total Remuneration
The charts below set out the CEO and CFO earnings history from 2016 onwards, the latter being the first full year Phil Urban was in place as CEO.
The Committee continued to review the appropriateness of remuneration decisions, and in particular variable remuneration outcomes. In doing so, it considered
overall business performance as well as the wider experience of our key stakeholders, namely our customers, colleagues, supplier partners and shareholders,
and our wider communities. Balancing the needs of all our stakeholders continues to be at the heart of our purpose. In particular, the Committee considered
the following factors throughout the year in determining remuneration decisions:
Key stakeholder Factors considered by the Committee
Customers • Year-on-year improvements in Guest Health scores
• Very strong safety scores and focus on allergens
Colleagues • The number of eligible employees receiving a bonus payout in the year
• Number of apprentices in learning
• Investments in pay and benefits
• Health and wellbeing initiatives including mental health support in conjunction with the Samaritans
• Establishing of employee network groups to support our diversity and inclusion agenda
Suppliers • Close working relationships maintained during supply chain challenges
• Accreditations e.g. Tier 3 Business Benchmark on Farm Animal Welfare rating
Shareholders • Sales performance consistently ahead of the market
• Strong profit growth and improved cashflow performance
• Continued to pay down debt
Community • Strategic partnership with Social Bite
Appropriateness of remuneration decisions
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Strategic Report
Introduction
Governance
Current shareholding Shareholding requirementsOwned shares
Outstanding unvested shares not subject to further performance conditions
Outstanding unvested shares subject to further performance conditions/underpins
How Executive Directors are building towards shareholding requirement
The table below shows the current shareholding as a percentage of base pay, what the shareholding as a percentage of base pay would be once unvested
shares not subject to further performance conditions are released (such as deferred bonus shares), and then the shareholding taking into account unvested
shares that are subject to performance conditions. Shareholdings are calculated based on the average share price over the final three months of the financial
period; for FY 2025 this was 271.5p (FY 2024 299.7p).
Mitchells & Butlers’ remuneration principles
When determining Executive Director remuneration policy, the
Remuneration Committee addresses each of the factors under Provision 40
of the 2018 UK Corporate Governance Code and these are also reflected in
our principles:
Shareholder alignment
A high proportion of reward is delivered in the form of equity, ensuring
Executives have strong alignment with shareholders.
Competitive
Providing reward that promotes the long-term success of the business
whilst enabling the attraction, retention and motivation of high-calibre
senior Executives.
Performance-linked
A significant proportion of an Executive Director’s reward is linked to
performance, with a clear line of sight between the outcomes of the business
and the delivery of shareholder value.
Straightforward
The remuneration structure is simple to understand for participants and
shareholders, and is aligned to the strategic priorities of the business.
These same principles apply throughout the organisation and are adapted as
appropriate for specific employee groups with a different emphasis on certain
principles in comparison to Executive Directors. This is illustrated in the table
on page 107 which sets out remuneration below Executive Director level.
For senior management, a much greater proportion of the overall reward
package is performance-linked and therefore is variable and at risk, whereas
for our hourly paid colleagues a greater weighting applies to the competitive
and straightforward principles as these factors are more important to the
attraction and retention of these employees.
291% 370% 967%
276% 354% 951%
200%
250%
Phil Urban (Current salary £625,725)
Tim Jones (Current salary £523,250)
Mitchells & Butlers plc Annual Report and Accounts 2025
103
Financial Statements Other Information
Report on Directors’ remuneration continued
Alignment of Executive pay to strategy
The table below sets out how the three strategic priorities of the business align to Executive remuneration:
Strategic priority Link to Executive remuneration
Annual
Bonus PSP
Building a more
balanced business
Strong operating performance supports the
delivery and sustainability of the capital plan
and estate optimisation.
Adjusted Operating Profit delivery is the main component
of the annual bonus plan.
Operating Cashflow supports cumulative cash generation
to enable debt repayment whilst EPS incentivises profit
recovery.
A more balanced business delivers brands
and food and drink offers in an environment
that guests want to enjoy.
The Guest Health element of the annual bonus plan
provides a strong indicator of the success of each business.
There is a clear correlation between strong Guest Health
performance and sales performance.
High-quality engaged teams are fundamental
to the success of any business.
The engagement element of the annual bonus plan
measures how our teams feel about working for Mitchells
& Butlers and, in turn, the service they provide to guests.
Instilling a more
commercial culture
A commercial culture improves controls,
efficiency, purchasing and pricing, driving
both improved cashflow and operating
performance.
Adjusted Operating Profit delivery is the main component
of the annual bonus plan.
Cashflow is the main component of the PSP.
Commercial decisions must be guest-focused
and benefit from the input of customer
feedback.
The Guest Health metric quickly demonstrates where
decisions are right or wrong and Executives are
incentivised to react.
Developing and evolving a commercial
culture requires high levels of employee
engagement and business awareness.
The employee engagement element of the annual bonus
plan supports and underpins the development of culture.
Driving an
innovation agenda
Innovation at small and large scale is an
engine for improved sales and, therefore,
cash and profit generation.
Adjusted Operating Profit delivery is the main component
of the annual bonus plan.
Operating Cashflow and EPS make up the majority of the
PSP performance assessment.
Guests’ expectations continue to increase,
demanding higher standards of service and
digital capability.
The Guest Health element of the annual plan provides
valuable actionable feedback and incentivises action.
Innovation involves change, and delivery of
change requires strong employee
engagement.
The employee engagement element of the annual bonus
plan incentivises action to maintain and improve employee
engagement.
Annual Report and Accounts 2025 Mitchells & Butlers plc104
Strategic Report
Introduction
Governance
Overview of remuneration policy and its implementation
for FY 2026
The key elements of our remuneration policy are shown below, along with details of how we plan to implement the policy specifically for 2026 and if any of the
elements impact on future remuneration.
Policy 2026 2027 2028 2029 2030 Implementation for 2026
Base pay
Increases in line with wider workforce,
except for exceptional circumstances.
Base pay
Effective
1 Jan 2025
Effective
1 Jan 2026
%
increase
Phil Urban 625,725 647,300 3.5
Tim Jones 523,250 541,500 3.5
Average
employee
increase
6.7%
(actual)
5%
(projected)
Benefits
Benefits normally include (but are not
limited to) private healthcare, life
assurance, annual health check,
employee assistance programme, use of
a Company vehicle or cash equivalent,
and discounts on food and associated
drinks purchased in our businesses.
Private healthcare is provided for the
Executive, spouse or partner and
dependent children.
In line with FY 2025.
Pension
Executive Directors’ contributions
aligned with the wider workforce
pension rate (currently 4% of salary).
Unchanged
Phil Urban: 4% of salary.
Tim Jones: 4% of salary.
Short-term
incentives
Normal maximum of 100% of salary.
At least 50% of performance conditions
to be based on financial measures, the
remainder based on non-financial or
personal business objectives.
50% of the award to be deferred as
shares and released in two equal
tranches, after 12 and 24 months.
The following maximum opportunities will
apply in FY 2026 (unchanged).
Phil Urban: 100% of salary.
Tim Jones: 100% of salary.
Long-term
incentives
Normal maximum of 200% of salary,
exceptional maximum of 250% of salary.
Performance will be measured over no
less than three financial years.
At least 70% of the award will be based
on the achievement of financial
measures, the remainder based on
non-financial, strategic or ESG
measures.
Vesting after three years, with a
two-year holding period post-vesting.
The following maximum opportunities will
apply in FY 2026 (unchanged).
Phil Urban: 200% of salary.
Tim Jones: 200% of salary.
Performance measures for FY 2026-28 are:
Operating Cashflow – (70%)
Adjusted EPS – (20%)
Sustainability (Scope 1, 2 &3) – (10%)
Shareholding
requirement
250% of salary for the CEO; 200% of
salary for all other Executive Directors.
All Executive Directors are required to
maintain shareholding requirements in
full for two years post-cessation.
Base pay
At start of
FY 2025
At start of
FY 2026
Phil Urban 246% 291%
Tim Jones 229% 246%
Mitchells & Butlers plc Annual Report and Accounts 2025
105
Financial Statements Other Information
Report on Directors’ remuneration continued
Illustrations of remuneration policy
The charts below show an estimate of the remuneration that could be
received by Executive Directors under the remuneration policy. The charts
also show the impact of a 50% increase in share price on the LTIP outcome.
Chief Executive
£689,504
£1,660,904
£2,632,304
£3,279,904
Minimum
41.5%
19.5%
39.0%
26.2%
24.6%
49.2%
21.0%
19.7%
39.6%
19.7%
£1,804,000
35.5%
33.2%
£2,298,000
28.7%
22.5%
48.8%
31.3%
On-target Maximum
FY 2025
Actual
FY 2024
Actual
Maximum
+50% Share
price gain
100%
Chief Financial Officer
£578,160
£1,390,410
£2,202,660
£2,744,160
Minimum
41.6%
19.5%
38.9%
26.2%
24.6%
49.2%
21.1%
19.7%
39.5%
19.7%
£1,512,000
35.6%
33.1%
£1,907,000
28.2%
22.7%
49.1%
31.3%
On-target Maximum
FY 2025
Actual
FY 2024
Actual
Maximum
+50% Share
price gain
100%
The performance scenarios demonstrate the proportion of maximum
remuneration which would be payable in respect of each remuneration
element at each of the performance levels. In developing these scenarios,
the following assumptions have been made:
Minimum
Only the fixed elements of remuneration are payable. The fixed element
consists of base salary, benefits and pension. Base salary is the salary
effective from 1 January 2026. Benefits are based on actual FY 2025 figures
and include company car, healthcare and taxable expenses. Pension is
aligned with the rate available to the wider workforce (4%).
On-target
In addition to the minimum, this reflects the amount payable for on-target
performance under the short- and long-term incentive plans:
• 50% of maximum (50% of base salary for the Chief Executive and Chief
Financial Officer) is payable under the short-term incentive plan; and
• 50% of maximum (100% of base salary for the Chief Executive and Chief
Financial Officer) is payable under the PSP.
Maximum
In addition to the minimum, maximum payment is achieved under both the
short- and long-term incentive plans such that:
• 100% of base salary is payable under the short-term incentive plan for the
Chief Executive and Chief Financial Officer; and
• 200% of base salary for the Chief Executive and Chief Financial Officer is
payable under the PSP.
Share price gain
This shows the impact a 50% increase in the share price would have on the
maximum PSP outcome.
Share price gain Long-term incentives
Short-term incentives Fixed pay
Share price gain Long-term incentives
Short-term incentives Fixed pay
Annual Report and Accounts 2025 Mitchells & Butlers plc106
Strategic Report
Introduction
Governance
How our policy cascades to colleagues and
workforce engagement
Remuneration below Executive Director level
The table below demonstrates how the key elements of Executive pay align with the wider UK workforce:
Job Group
(Number of employees) Base pay Annual bonus Long-term incentives All-employee share plans
Executive Directors (2) Pay broadly around
mid-market levels.
Overall, increases (in
percentage terms)
consistent across all
salaried employee groups.
Bonus schemes for all
schemes align to the
business scorecard.
The majority of bonus
opportunity is linked to
financial performance.
Measures and targets for
long-term incentive plans
consistent for all
participants.
All employees can
participate in any of the
all-employee share
schemes, subject to
qualifying service, building
a stake in the business.
Executive Committee (8)
Senior management (c. 40)
Retail Support Centre
(c. 1,200)
Retail managers (c. 5,400)
Retail team members
(c. 41,000)
Pay set in line with market
requirements and closely
monitored.
Base pay for many
employees is ahead of the
statutory minimums.
Many employees benefit
from tips and service
charges, and in line with the
Employment (Allocation of
Tips) Act 2023 100% of
these earnings are passed
on to employees.
Our pay approach is aimed at providing regular and
predictable earnings through competitive base pay for our
retail team members. This is valued more highly than variable
pay elements by retail team members and is in line with our
‘competitive’ and ‘straightforward’ remuneration principles.
Workforce engagement
We welcome and encourage feedback from employees on a broad range of topics including business improvement, engagement and remuneration.
This feedback is gathered in a number of ways throughout the year as shown in the illustration below:
Remuneration Committee
Employee survey
Outcomes reviewed by
the Remuneration
Committee and taken
into account when
setting remuneration
policy.
CEO and CFO
roadshows
The CEO and CFO hold
regular roadshows that
allow both support centre
colleagues and General
Managers an opportunity
to discuss business issues
and provide feedback.
Employee forum
Elected representatives
have direct access to the
Executive Committee as
part of the forum and
where necessary
Executive remuneration
matters are brought to
the attention of the
Remuneration
Committee Chair.
Overview of pay and
policy decisions
Committee members are
updated on employee
terms and conditions and
made aware of significant
changes to policies and
other pay-related
matters.
Nominated
Non-Executive
Director
A Non-Executive
Director (Dave Coplin)
has been appointed to
engage with employees
and report back to the
Board. Dave Coplin is a
member of the
Remuneration
Committee.
Mitchells & Butlers plc Annual Report and Accounts 2025
107
Financial Statements Other Information
Report on Directors’ remuneration continued
The Committee is regularly updated on pay and conditions applying to
Group employees alongside other workforce-related matters.
Where significant changes are proposed to employment conditions and
policies elsewhere in the Group, or there are important employee-related
projects underway, these are highlighted for the attention of the Committee
at an early stage. Over the course of FY 2025, these updates have focused on
employee engagement, the implementation of the new tips code of practice,
progress against our diversity and inclusion agenda and the roll out of a new
talent management system that will help to support the development of our
people. The Committee has also been kept informed of the potential impact
of the Government’s Employee Rights Bill, which is expected to have a
material impact on our employees once it is passed into law.
The Committee takes into account the base pay review budget applicable
to other employees when considering the pay of Executive Directors. The
Committee considers a broad range of reference points when determining
policy and pay levels. These include external market benchmarks as well as
internal reference points. Any such reference points are set in an appropriate
context and are not considered in isolation.
Obtaining and understanding the views of our employees, including in
relation to Executive Remuneration, is an important consideration for the
Committee when developing and operating our overall approach to
remuneration across Mitchells & Butlers. In addition to our approach to
communicating with our employees, we also welcome feedback and all
employees are invited to take part in our employee engagement surveys.
These provide all employees with an opportunity to give anonymous
feedback on a wide range of topics of interest or concern to them.
The Committee reviews these results and any significant concerns over
remuneration would be considered separately by the Committee and,
if appropriate, taken into account when determining the remuneration
approach and its implementation.
An employee forum is normally held twice every year, which gives an
opportunity for employees to ask questions of senior management via
elected representatives, and which from FY 2020 has been attended by
Dave Coplin. In 2025, two forums were held in March 2025 and September
2025. The Executive team finds these forums very valuable, as the format
allows for a more in-depth discussion and understanding that is not possible
through other channels such as surveys.
In addition, in his role as the nominated Non-Executive Director, Dave Coplin
undertakes a number of activities ranging from visits to our businesses to
meet and discuss issues with employees, to focus groups with specific employee
groups. Dave meets regularly with members of the Human Resources team
and is also supporting the business in how it may utilise technology to better
communicate with all employees; in particular Dave has had input into the
replacement of our HR and Payroll system in 2026 and the ongoing
development of our employee communications app.
The views of employees in relation to Executive remuneration have been
sought in the past and this issue was not proved to be an area of interest or
concern for employees at this time. Our engagement survey has a section
that allows employees to anonymously raise any concerns they may have on
any matter, and in 2025 there were over 20,000 comments recorded, none
of which related to senior management pay.
Annual Report and Accounts 2025 Mitchells & Butlers plc108
Strategic Report
Introduction
Governance
This section details the remuneration payable to the Executive and Non-Executive Directors (including the Company Chair) for the financial period ended
27 September 2025 and how we intend to implement our remuneration policy for FY 2026. This report, along with the Chair’s annual statement, will be
subject to a single advisory vote at the 2026 AGM.
Pay outcomes
The tables and related disclosures set out on pages 109 to 116 on Directors’ remuneration, deferred annual bonus share awards (‘STDIP’), PSP and RSP share
options, Share Incentive Plan, Save as You Earn Plan (‘SAYE’) and pension benefits have been audited by KPMG LLP where explicitly indicated.
Executive Directors’ remuneration
The table below sets out the single figure remuneration received by the Executive Directors during the reporting year and prior year.
Executive Directors (audited by KPMG)
Basic salaries
£000
Taxable benefits
a
£000
Short-term
incentives
£000
Pension-related benefits
b
£000
Long-term
incentives
c
£000
FY
2025
FY
2024
FY
2025
FY
2024
FY
2025
FY
2024
FY
2025
FY
2024
FY
2025
FY
2024
Phil Urban 619 599 16 15 518 599 25 26 1,120 565
Tim Jones 518 501 15 16 433 501 21 22 937 472
Sub-total Executive Directors 1,137 1,100 31 31 951 1,100 46 48 2,057 1,037
Other
d
£000
Total
remuneration
£000
Total
fixed pay
£000
Total
variable pay
£000
FY
2025
FY
2024
FY
2025
FY
2024
FY
2025
FY
2024
FY
2025
FY
2024
Phil Urban 2.5 2.5 2,300.5 1,806.5 662.5 642.5 1,638.0 1,164.0
Tim Jones 2.0 2.0 1,926.0 1,514.0 556.0 541.0 1,370.0 973.0
Sub-total Executive Directors 4.5 4.5 4,226.5 3,320.5 1,218.5 1,183.5 3,008.0 2,137.0
a. Taxable benefits for the year comprised car allowance, healthcare and taxable expenses.
b. Based on the value of supplements paid in lieu of contributions to the Company scheme.
c. The value of the RSP vesting is based on the average share price in the last three months of the financial period (271.5p) multiplied by the number of shares vesting. The increase
in Mitchells & Butlers’ share price over the period from when the RSP was granted in December 2022 to the end of FY 2025 has had an impact on the value of the 2023 PSP.
£568,411 of the CEO’s total pay and £475,651 of the CFO’s total pay is attributable to share price increase. The FY 2024 figure has been restated to reflect the actual value on
vesting based on a share price of 249p.
d. Includes free shares awarded under the SIP.
Annual bonus
Details of the measures and targets applying to the 2025 annual bonus plan are set out below:
Threshold – 95%
of Target
(% of salary
payable)
Target
(% of salary
payable)
Maximum – 103%
of Target
(% of salary
payable)
Outcome
(% of salary
payable)
Adjusted Operating Profit
(70%) (52 weeks)
£312m
(7.5%)
£325m
(35%)
£334.8m
(70%)
£330m
a
(53.7%)
Threshold Target Performance (Score)
Calculation of outcome
(% of salary payable)
Outcome
(% of salary
payable)
Guest Health (15%) Each element is scored 1 if better than target,
0 if between threshold and target,
and -1 if below threshold.
2
Social Media Score
4.45 4.54 4.60 (1)
• If the sum of these scores is +2 then maximum
bonus is paid (15%).
• If the sum of these scores is +1 then an
on-target payment would be made (7.5%).
• If the sum of these scores is 0 then threshold
bonus is paid (3.75%).
(15%)
Complaints Ratio
0.66 0.56 0.52 (1)
Annual report on remuneration
Mitchells & Butlers plc Annual Report and Accounts 2025
109
Financial Statements Other Information
Report on Directors’ remuneration continued
Threshold
(% of salary
payable)
Target
(% of salary
payable)
Maximum
(% of salary
payable)
Outcome
(% of salary
payable)
Employee Engagement
(10%)
83.5
(2.5%)
85
(5%)
86.3
(10%)
87.7
(10%)
Combined Safety Score
(5%)
97.5%
(5%)
98%
(5%)
a. Payout is on a straight-line basis between points.
Financial measures
Adjusted Operating Profit (Outcome 53.7% out of 70%)
At the time the financial targets were set, the macroeconomic outlook was
more settled with some cost inflation beginning to flatten, but wage costs
were anticipated to rise. Challenging financial targets were set by the
Committee taking into account all of these factors. Labour cost increases
proved to be even higher than anticipated, driven notably by the increase in
employer national insurance contributions which was announced after these
targets had already been set. To deliver an on-target performance, the
business needed to offset at least £100m of cost inflation through sales
growth and improved cost efficiencies.
Total sales across the period were £2,711m, an increase of 3.9% and on
alike-for-like basis sales increased by 4.3%
a
. Our sales performance
outperformed the market
b
consistently over the year, and FY 2025
represented further year in which the business has delivered sales ahead
of the market.
Adjusted Operating Profit over the year was £330m; an increase of 5.8% on
the prior year, and in line with consensus forecasts which had already been
increased through the year. This performance was ahead of the target set by
the Committee (£325m), driven by a good sales performance over the year,
improved cost efficiencies and excellent returns from our capital plan.
a. The Directors use a number of alternative performance measures (APMs)
that are considered critical to aid the understanding of the Group’s performance.
Key measures are explained on pages 189 to 191 of this Report.
b. As measured by the CGA Business Tracker.
Non-financial measures
The non-financial measures encompass Guest Health, Employee
Engagement and Safety.
Guest Health (15% out of 15%)
Guest Health performance is measured as a combination of online review
scores and guest complaints. Over the year our online review scores have
averaged 4.60, representing a best ever score for this measure. Record low
scores have also been achieved for guest complaints, which are measured as
a ratio of complaints received for every 1,000 meals served. The average
number of complaints received per 1,000 meals over the year was just 0.52.
This combined performance has resulted in a maximum payment for the
guest element.
Employee Engagement (10% out of 10%)
Employee engagement is measured at two points during the year, in
February and June, giving two different reference points to measure
employee satisfaction. This year around two thirds of employees completed
a survey and the overall score across the two surveys was 87.7, a record high
for employee engagement, and an increase of almost two points on the prior
year score, which itself was a record score. As a result a maximum payment is
due for this element.
Safety (5% out of 5%)
Our safety measure encompasses four areas of safety; Food Hygiene
(as measured by the National Food Hygiene Rating System), Food Practices,
Allergens and Fire Safety. The measure assesses the percentage of our
businesses that have scored at least a 4 or 5 rating in each of the elements in
a combined score. The target set at the start of the year was for an overall
performance of 97.5% of all ratings to be at a 4 or 5. The year end performance
was 98% resulting in an on-target/maximum payment for this element.
Overall outcome
The total bonus awarded to Executive Directors is 83.7% of salary,
resulting in bonus payments of £518,171 and £433,308 to Phil Urban and
Tim Jones respectively.
In line with our policy, half of any bonus award will be deferred into shares
under the Short Term Deferred Incentive Plan (‘STDIP’), which will be
released in two equal amounts after 12 and 24 months. Bonus Share awards
are subject to continued employment at the time the awards are granted.
These shares must be retained until the shareholding requirement is met and
are subject to a post-cessation holding period.
Annual Report and Accounts 2025 Mitchells & Butlers plc110
Strategic Report
Introduction
Governance
Long-term incentives vesting during the year
FY 2023–25 RSP vesting
During FY 2023 share awards were made to Phil Urban and Tim Jones under the terms of the RSP to the value of 100% of their respective salaries.
Awards were subject to a performance underpin, meaning that the Committee took into account the following factors (amongst other things) when
determining whether to exercise its discretion to adjust the number of shares vesting:
Underpin condition Commentary
• if any adjustments have been made to annual
bonus outcomes for each of the three years
covered by the vesting period for awards
under the RSP;
No adjustments were made to any bonus outcomes during the vesting period.
The approval of any annual bonus payout is subject to a robust quality of earnings assessment
that considers all aspects of scorecard performance and a range of other performance factors to
determine if the annual bonus outcome was consistent with overall business performance. This annual
assessment is then used as a basis to assess performance against these factors over the course of the
RSP vesting period.
• whether there has been material damage to
the reputation of the Company (in such
circumstances, responsibility and hence any
adjustments to the level of vesting may be
allocated collectively or individually to
participants); and
There were no issues that caused material damage to the reputation of the Company.
• that the business has a stable and appropriate
capital structure in place to enable execution
of the Company’s strategic priorities.
The Board believes that the business continues to have a stable capital structure that has strengthened
over the course of the FY 2023–25 period.
Therefore, having reviewed each underpin condition, the Committee determined that awards should vest in full.
The Committee reviewed whether the Executive Directors might unduly benefit from a windfall gain on these awards. As explained at the date of grant,
the prevailing share price used for the 2023/25 RSP award reflected the challenging trading conditions facing the business at that time. The fall in share price
was due to overall market sentiment and not directly linked to the underlying performance of the business. The increase in value over the three-year vesting
period for the 2023/25 RSP reflects the strong underlying performance of the business despite significant headwinds. The Mitchells & Butlers’ share price
has also outperformed the wider market and peers in the FTSE All Share Travel and Leisure index. The Mitchells & Butlers’ share price has increased by 24.8%
p.a. over the period whereas the FTSE All Share Travel and Leisure index has grown by 13.8% p.a. and the FTSE 250 by 5.8% p.a. The share price also did not
follow the typical short-term ‘V-shape’ recovery that is often associated with ‘windfall gains’ and instead has recovered over time, reflecting strong, sustained
performance driven by management actions. The Committee also assessed the share prices at which prior RSP awards have been granted and vested over
the last five years and took into consideration the value gained and lost by participants over this period. After careful consideration the Committee concluded
that participants will not benefit from a windfall gain on the FY 2023 RSP awards and therefore has determined that no adjustment is required.
Long-term incentive awards made during FY 2025
An award for FY 2025-27 was made to the Chief Executive and the Chief Financial Officer in December 2024 in accordance with the rules of the PSP and
within the remuneration policy approved at the January 2024 AGM.
The performance condition has three independent elements: Operating Cashflow (70%); Earnings Per Share (‘EPS’) growth (20%); and a sustainability
measure based on reduction in Scope 1, 2 & 3 emissions (10%).
The Committee undertook a thorough review of the performance measures and targets that will apply and disclosed this in last years report. For completeness
these are summarised in the table below:
FY 2025 – 2027 PSP performance conditions
Weighting (% of
maximum) Threshold Maximum
Operating Cashflow (£m) 70% 1,370 1,448
EPS Growth (% CAGR) 20% 4.1 6.9
Sustainability – reduction in Scope 1, 2 & 3 emissions tCO
2
e 10% -41,891 -41,891
Full details of awards made to Executive Directors under the PSP are set out below (audited by KPMG):
Executive Directors
Nil Cost Options
awarded during
the year to
27/09/25
Basis of award
(% of basic
annual salary)
Award
date
Market price
per share used
to determine
the award
(p)
a
Actual/
planned
vesting date
Latest
lapse date
b
Face value
c
£
Phil Urban 494,908 200 3/12/24 2.455 Nov 27 Mar 2028 1,254,592
Tim Jones 413,849 200 3/12/24 2.455 Nov 27 Mar 2028 1,049,107
Total 908,757 2,303,699
a. Market price is the average of the middle market quotations on the three days prior to the award being made.
b. The date on which vested shares will lapse if not exercised.
c. Face value is the maximum number of shares that may vest (excluding any dividend shares that may accrue) multiplied by the middle market quotation of a Mitchells & Butlers’
share on the day the award was made (253.5p).
Mitchells & Butlers plc Annual Report and Accounts 2025
111
Financial Statements Other Information
Report on Directors’ remuneration continued
All-employee SIP and Sharesave
The table below shows the awards made to Directors under the free share element of the SIP during the year and under Sharesave Scheme (‘SAYE’)
(audited by KPMG).
SIP
Executive Director
Shares
awarded
during
the year
to 27/9/25
Award
date
Market price
per share
at award
(p)
Normal
vesting
date
Market price
per share
at normal
vesting date
(p)
Lapsed
during
period
Phil Urban 801 26/6/25 284p 26/6/28 n/a –
Tim Jones 665 26/6/25 284p 26/6/28 n/a –
Total 1,466
Directors’ entitlements under the Partnership Share element of the SIP are set out as part of the Directors’ interests table on page 116.
SAYE
Director
Shares
awarded
during
the year
to 27/9/25
Award
date
Option Price
(p)
Earliest Exercise
date
Last Expiry date
(p)
Phil Urban 6,746 26/06/25 272 1/10/28 31/3/29
Total 6,746
Executive Directors: Implementation of remuneration policy in FY 2026
Fixed Pay (Base Pay, Pensions and Benefits)
The current level of inflation is putting pressure on pay increases. Overall pay increases have been 6.7% over the year with hourly paid frontline employees
who are typically the lowest paid employees in the Group, seeing the largest increases.
With effect from 1 January 2026 Phil Urban’s salary will increase to £647,600 (3.5%) and Tim Jones’s to £541,500 (3.5%).
The pension allowance paid to Executive Directors remains at 4%, in line with the general workforce.
There are no changes to the benefits available to Executive Directors.
Annual Bonus
The Committee believes that the annual bonus scheme for FY 2025 was successful in driving the right behaviours across the business and as such has
determined that the annual bonus scheme for FY 2026 will be the same and will be structured as follows:
• The maximum earnings opportunity will remain at 100% of base salary.
• Adjusted Operating Profit will continue to account for 70% of the overall opportunity.
The remaining 30% of the annual bonus plan will be allocated against the business scorecard as follows:
– 15% for Guest Health (reputation.com scores and guest complaints).
– 10% for employee engagement.
– 5% for overall safety performance.
• The non-financial elements will only be payable if a threshold level of financial performance is achieved. For FY 2026 this will be unchanged at 97.5%
of Adjusted Operating Profit.
Targets are not being disclosed on the basis that they are considered commercially sensitive but will be disclosed in next year’s report.
Executive Directors are also aware that the Committee may take into account other factors when assessing if any bonus may be paid as part of our established
quality of earnings assessment. In particular this assessment will review the overall financial performance of the Group over the year to ensure that any payout
resulting from the approach to target setting above, is consistent with overall performance across the year.
Performance Share Plan (‘PSP’) award FY 2026 to FY 2028
A PSP award is due to be made in respect of the 2026–2028 performance period.
The Committee has undertaken a thorough review of the performance measures that will apply and these are summarised in the table below:
2026 – 2028 PSP performance conditions
Weighting (% of
maximum) Threshold Maximum
Operating Cashflow (£m) 70% 1,454 1,535
EPS Growth (% CAGR) 20% 3.1 5.9
Sustainability – reduction in Scope 1, 2 & 3 emissions tCO
2
e 10% 61,883 76,581
Annual Report and Accounts 2025 Mitchells & Butlers plc112
Strategic Report
Introduction
Governance
Additional remuneration disclosures (audited by KPMG)
Payment for loss of office
No payments for loss of office were made in the year ended 27 September 2025.
Payments to past Directors
No payments were made to any past Directors in the year ended 27 September 2025.
Total shareholder return from September 2015 to September 2025 (rebased to 100)
This graph shows the value, by 27 September 2025, of £100 invested in Mitchells & Butlers plc on 27 September 2015, compared with the value of £100
invested in the FTSE 250 and the FTSE All Share Travel and Leisure indices.
200
100
150
50
0
2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025
Mitchells & Butlers plc FTSE 250 FTSE All Share Travel and Leisure Source: Datastream (Thomson Reuters)
CEO earnings history
Year ended 24/09/16 30/09/17 29/09/18 28/09/19 26/09/20 25/09/21 24/09/22 30/09/23 28/09/24 27/09/25
Phil Urban
Single figure remuneration (£000) 613 770 819 1,684 553 627 810 1,573 1,806.5 2,300.5
Annual bonus outcome (% of max) – 28 39 82 – – 33 95 100 83.7
LTIP vesting outcome (% of max) – – – 47.5 – – – 100 100 100
Pay ratios
The table below sets out the Chief Executive pay ratio at the median, 25th and 75th percentiles for 2025. Data is also presented for 2018 as Mitchells & Butlers
has disclosed the pay ratio between the Chief Executive and the median pay of other employees for the last seven years, despite not needing to comply with
this requirement until the 2020 Annual Report.
Chief Executive pay ratio
Financial period Method P25 (lower quartile) P50 (median) P75 (upper quartile)
2025 Option C 108:1 106:1 100:1
2024 Option C 92:1 92:1 87:1
2023 Option C 86:1 82:1 78:1
2022 Option C 53:1 47:1 45:1
2021 Option C 41:1 38:1 36:1
2020 Option C 37:1 35:1 35:1
2019 Option C 120:1 112:1 106:1
2018 Option C 61:1 58:1 52:1
The lower quartile, median and upper quartile employees were calculated based on full-time equivalent base pay data as at 27 September 2025. This calculation
methodology was selected as the data was felt to be the most accurate way of identifying the best equivalents of P25, P50 and P75 and, therefore, the most
accurate measurement of our pay ratios. Of the three allowable methodologies under the legislation, this method is classed as ‘Option C’. Option A was
considered but given the high levels of team member turnover, it was felt more appropriate to adopt the approach set out above.
The employee pay data has been reviewed and the Committee is satisfied that it fairly reflects the relevant quartiles given the very large proportion of hourly
paid team members employed by Mitchells & Butlers (c. 85% of the total workforce). The three representative employees used to calculate the pay ratios are
hourly paid and the base pay elements were calculated using a full-time equivalent hourly working week of 35 hours. Hourly paid employees do not participate in
the annual bonus plan or long-term incentive plan and in most cases do not have any taxable benefits. Employee pay does not include earnings from tips and
service charges, from which many employees benefit. The calculations are based on the single figure methodology and exclude the value of any awards
under the free share element of the SIP.
Mitchells & Butlers plc Annual Report and Accounts 2025
113
Financial Statements Other Information
Report on Directors’ remuneration continued
Pay details for the individuals are set out below:
Chief Executive
(£)
P25 (lower quartile)
(£)
P50 (median)
(£)
P75 (upper quartile)
(£)
Salary 619,328 21,003 21,721 22,535
Total pay 2,298,146 21,228 21,721 22,962
On a total pay basis, the ratio of workforce pay to the Chief Executive’s total pay has increased, reflecting the higher levels of variable pay from the annual
bonus plan and the vesting under the RSP. The Committee believes that the ratio is broadly consistent with that of other organisations in the hospitality and
retail sectors. The overall trend in the median ratio aligns with the movement in the single total figure of remuneration over time.
Hourly-paid employees do not participate in the annual bonus plan, whereas salaried employees do participate in an annual bonus plan (c. 5,000 employees).
The median pay ratio is consistent with pay and progression policy for UK employees. More broadly, pay in the hospitality sector is lower than many other
sectors and this will be an influencing factor in the overall pay ratio, despite significant increases in pay rates over the last few years.
Gender Pay Gap
The 2025 mean Gender Pay Gap for the Group is 5.4% (2024 5.9%) and the median Gender Pay Gap is 1.7% (2024 1.7%). The mean bonus gap is 26.5%
(2024 25.5%) and the median bonus gap is 0.0% (2024 0.0%).
Year-on-year change in remuneration of Directors compared to an average employee
2025 2024 2023 2022 2021
Salary/
Fees
%
Bonus
%
Benefits
%
Salary/
Fees
%
Bonus
%
Benefits
%
Salary/
Fees
%
Bonus
%
Benefits
%
Salary/
Fees
%
Bonus
%
Benefits
%
Salary/
Fees
%
Bonus
%
Benefits
%
Average employee 7.1 -16.4 4.7 9.7 7.0 -4.5 8.7 422.3 -6.3 5.6 32.2 -14.0 1.2 81.6 6.3
Executive Directors
Phil Urban 3.4 -13.5 0.0 3.0 8.5 0.0 6.5 202.9 4.3 2.2 100.0 3.1 0.00 0.00 -1.4
Tim Jones 3.4 -13.5 0.0 3.0 8.4 2.6 6.5 203.0 2.2 2.2 100.0 5.9 0.00 0.00 -3.3
Non-Executive Directors
Bob Ivell 0.0 – -2.2 -0.9 – 16.7 4.8 – 180.0 0.0 0.0 -60.4 0.0 0.0 -25.4
Eddie Irwin 0.0 – 0 -0.9 – – 4.8 – – 0.0 0.0 0.0 0.0 0.0 0
Dave Coplin 0.0 – 134.4 -0.9 – 36.1 4.8 – 967.9 0.0 0.0 -93.2 0.0 0.0 -74.0
Josh Levy 0.0 – -59.2 -0.9 – – 4.8 – – 0.0 0.0 -100.0 0.0 0.0 225.1
Keith Browne 0.0 – 0 -0.9 – – 4.8 – – 0.0 0.0 0.0 0.0 0.0 -59.2
Jane Moriarty 0.0 – -44.4 -0.9 – 98.2 8.7 – 197.3 34.8 0.0 -54.3 24.5 0.0 443.9
Amanda Brown 0.0 – -7.2 -0.9 – – 354.0 – – 100.0 0.0 0.0 n/a n/a n/a
Salaries and fees are based on rates at the year end date on a full time equivalent (‘FTE’) basis. Hourly paid employees do not participate in any bonus scheme
and in most cases are not eligible for taxable benefits. The figures shown for these elements are based on the year-on-year change for eligible employees.
The figures for Executive Directors do not include LTIP awards or pension benefits that are disclosed in the single figure table. The benefit figures for
Non-Executive Directors relate to taxable expenses as detailed in the single figure table on page 115.
Relative importance of spend on pay (£m)
Figures shown for wages and salaries consist of all earnings, including bonus. In FY 2025, £2.8m (0.3%) was paid to Executive and Non-Executive Directors
(2024 £3m (0.35%)).
0%
-1%
907 197 199852 140 127
1
1
1,000
200
400
0
600
800
FY 2025 FY 2024
* From note 2.3 to the consolidated financial statements. ** Business Rates, Corporation Tax, Employer’s NI.
There were no shareholder dividends or share buybacks in FY 2025.
Wages and salaries* Principal taxes** Pension deficit contributions Debt service
6.5%
10.2%
Annual Report and Accounts 2025 Mitchells & Butlers plc114
Strategic Report
Introduction
Governance
Fees for external directorships
No external non-executive directorships were held by either Executive Director during the year to 27 September 2025.
Chair and Non-Executive Directors
Non-Executive Directors (audited by KPMG)
The table below set out the single figure remuneration received by the Non-Executive Directors during the reporting year and prior year.
Fees
£000
Taxable
benefits
a
£000
Short-term
incentives
£000
Pension-
related benefits
£000
Long-term
incentives
£000
Other
£000
Total
remuneration
£000
Total
fixed pay
£000
Total
variable pay
£000
FY
2025
FY
2024
FY
2025
FY
2024
FY
2025
FY
2024
FY
2025
FY
2024
FY
2025
FY
2024
FY
2025
FY
2024
FY
2025
FY
2024
FY
2025
FY
2024
FY
2025
FY
2024
Bob Ivell 295 295 3 2 – – – – – – – – 298 297 298 297 – –
Eddie Irwin 55 55 – – – – – – – – – – 55 55 55 55 – –
Josh Levy 55 55 0.3 0.5 – – – – – – – – 55.3 55.5 55.3 55.5 – –
Dave Coplin 68 68 3 1 – – – – – – – – 71 69 71 69 – –
Keith Browne 55 55 – – – – – – – – – – 55 55 55 55 – –
Jane Moriarty 82 82 2 3 – – – – – – – – 84 85 84 85 – –
Amanda Brown 68 68 1 1 – – – – – – – – 69 69 69 69 – –
Sub-total
Non-Executive
Directors
678 678 9.3 7.5 – – – – – – – – 687.3 685.5 687.3 685.5 – –
Total Executive
Directors and
Non-Executive
Directors
1,815 1,778 40.3 38.5 951 1,100 46 48 2,057 1,037 4.5 4.5 4,913.8 4,006 1,905.8 1,869 3,008 2,137
a. Taxable benefits for Non-Executive Directors include cash payments made or accounted for by the Company relating to the reimbursement of expenses (and the value of
personal tax on those expenses).
Non-Executive Directors: Implementation of remuneration policy in FY 2026
The Chair’s fee and those of the Non Executive Directors were increased in January 2022. No increase will apply in 2026.
Directors’ shareholdings and share interests
RSP, PSP, STDIP and SAYE
The table below sets out details of the Executive Directors’ outstanding awards under the RSP, PSP, STDIP and Sharesave (‘SAYE’) (audited by KPMG).
Executive Director Scheme
Number of
shares at
28 September
2024
Granted
during the
period
Lapsed
during the
period
Exercised
during the
period
Number of
shares at
27 September
2025
Phil Urban RSP 639,300 – – 226,810 412,490
PSP 467,307 494,908 – – 962,215
STDIP 155,572 121,200 – 94,824 181,948
SAYE 7,031 6,746 7,031 – 6,746
Total 1,269,210 622,854 7,031 321,634 1,563,399
Tim Jones RSP 534,925 – – 189,750 345,175
PSP 390,769 413,849 – – 804,618
STDIP 130,180 101,366 – 79,396 152,150
SAYE – – – – –
Total 1,055,874 515,215 – 269,146 1,301,943
Directors’ interests
Executive Directors are expected to hold Mitchells & Butlers’ shares in line with the shareholding guideline set out in the approved remuneration policy.
This requires the Chief Executive to accumulate Mitchells & Butlers’ shares to the value of a minimum of 250% of salary (200% of salary for the CFO) through
the retention of shares arising from share schemes (on a net of tax basis) or through market purchases. Phil Urban’s shareholding at 27 September 2025 was
291% of his basic annual salary (2024 246%) and as a result Phil Urban has met the shareholding guideline. Tim Jones’s shareholding was 274% of his basic
annual salary (2024 229%) and as a result Tim Jones has also met the shareholding guideline. Shareholdings are calculated based on the average share price
over the final three months of the financial period; for FY 2025 this was 271.5p (FY 2024 299.7p). In line with the remuneration policy, no shares can be sold
until the guideline is met and post-cessation holding requirements are in place.
Mitchells & Butlers plc Annual Report and Accounts 2025
115
Financial Statements Other Information
Report on Directors’ remuneration continued
The interests of the Directors in the ordinary shares of the Company as at 28 September 2024 and 27 September 2025 are as set out below (audited by KPMG):
Wholly-owned shares
without performance
conditions
a
Unvested
shares with
performance
conditions
Unvested shares without
performance conditions
b
Unvested options
without performance
conditions
c
Unvested options
with performance
conditions/underpins
d
Vested but
unexercised
options
Total
shares/options
2025 2024 2025 2024 2025 2024 2025 2024 2025 2024 2025 2024 2025 2024
Executive
Directors
Phil Urban
671,181 499,599 – – 181,948 155,572 6,746 7,031 1,374,705 1,106,607 – – 2,234,580 1,768,809
Tim Jones 531,283 387,597 – – 152,150 130,180 – – 1,149,793 925,694 – – 1,833,226 1,443,471
Non-Executive
Directors
Bob Ivell
17,222 17,222 – – – – – – – – – – 17,222 17,222
Eddie Irwin 43,833 43,833 – – – – – – – – – – 43,833 43,833
Dave Coplin 7,360 6,000 – – – – – – – – – – 7,360 6,000
Josh Levy – – – – – – – – – – – – – –
Keith Browne – – – – – – – – – – – – – –
Jane Moriarty – – – – – – – – – – – – – –
Amanda Brown – – – – – – – – – – – – –
Total 1,270,879 954,251 – – 334,098 285,752 6,746 7,031 2,524,498 2,032,301 – – 4,136,221 3,279,335
a. Includes Free Shares and Partnership Shares granted under the SIP.
b. Deferred bonus awards granted under the STDIP.
c. Options granted under the Sharesave as detailed in the table on page 112.
d. Options granted under the RSP or PSP as detailed in the table on page 112.
Directors’ shareholdings (shares without performance conditions) include shares held by persons closely associated with them.
The above shareholdings are beneficial interests and are inclusive of Directors’ holdings under the Share Incentive Plan (both Free Share and Partnership
Share elements).
Phil Urban and Tim Jones acquired 112 and 111 shares respectively under the Partnership Share element of the Share Incentive Plan between the end of the
financial period and 27 November 2025. There have been no changes in the holdings of any other Directors since the end of the financial period.
None of the Directors has a beneficial interest in the shares of any subsidiary or in debenture stocks of the Company or any subsidiary.
The market price per share on 27 September 2025 was 249p and the range during the year to 27 September 2025 was 208.5p to 295.5p per share.
The Executive Directors as a group beneficially own 0.2% of the Company’s shares.
Service contracts and Letters of Appointment
Executive Directors
Details of the service contracts of Executive Directors are set out below.
Director Contract start date Unexpired term
Notice period
from Company
Minimum notice
period from Director
Compensation on
change of control
Phil Urban
a
27/09/15 Indefinite 12 months 6 months No
Tim Jones 18/10/10 Indefinite 12 months 6 months No
a. Phil Urban became Chief Executive and joined the Board on 27 September 2015. His continuous service date started on 5 January 2015, the date on which he joined the
Company as Chief Operating Officer.
Annual Report and Accounts 2025 Mitchells & Butlers plc116
Strategic Report
Introduction
Governance
Non-Executive Directors
Non-Executive Directors, including the Company Chair, do not have service
contracts but serve under letters of appointment which provide that they are
initially appointed until the next AGM when they are required to stand for
election. In line with the Company’s Articles of Association, all Directors,
including Non-Executive Directors, will stand for re-election at the 2026
AGM. This is also in line with the provisions of the 2018 UK Corporate
Governance Code. Non-Executive Directors’ appointments are terminable
without notice and with no entitlement to compensation. Payment of fees
will cease immediately on termination.
Copies of the individual letters of appointment for Non-Executive Directors
and the service contracts for Executive Directors are available at the registered
office of the Company during normal business hours and on our website.
Copies will also be available to shareholders to view at the 2026 AGM.
Mitchells & Butlers Remuneration Committee
Committee terms of reference
The Committee’s terms of reference were reviewed and updated in 2019
to take account of the 2018 UK Corporate Governance Code.
The Committee’s main responsibilities include:
• determining and making recommendations to the Board on the
Company’s Executive remuneration policy and its cost;
• taking account of all factors necessary when determining the
remuneration policy, the objective of which is to ensure that the policy
promotes the long-term success of the Company;
• determining the individual remuneration packages of the Executive Directors
and other senior Executives (including the Group General Counsel and
Company Secretary and all direct reports to the Chief Executive) and,
in discussion with the Executive Directors, the Company Chair;
• having regard to the pay and employment conditions across the
Company when setting the remuneration of individuals under the remit
of the Committee; and
• aligning Executive Directors’ interests with those of shareholders by
providing the potential to earn significant rewards where significant
shareholder value has been delivered.
Committee membership and operation
Committee members and their respective appointment dates are detailed
in the table below.
Name
Date of appointment to
the Committee
Amanda Brown
a
4 July 2022
Bob Ivell 11 July 2013
Dave Coplin
a
29 February 2016
Josh Levy 20 July 2017
Jane Moriarty
a
27 February 2019
a. Independent Non-Executive Directors.
Committee activity during the year
During the year the Committee met four times.
Key remuneration items considered over the year were as follows:
October 2024 Annual Bonus Targets
Salary Reviews
Provisional PSP Target
November 2024 Remuneration Policy
2024 Bonus – Confirmation of outcome
2022 RSP Vesting outcome
Final approval of PSP Targets
April 2025 Employee Update
All Employee Share Schemes approval
September 2025 2026 Annual Bonus Plan structure
Executive Pay Benchmarking
Employee engagement
Advice to the Committee
During the year the Committee undertook a competitive tender process for
the provision of remuneration advice, and appointed Deloitte LLP with effect
from June 2025. Prior to this the Committee received advice from PwC LLP
(‘PwC’). Both Deloitte and PwC are signatories to the Remuneration
Consultants Group Code of Conduct and any advice received is governed
by that Code. Total fees
b
payable in respect of remuneration advice to the
Committee in the reporting year were £10,500 and £41,500 to Deloitte and
PwC respectively and were charged on a time and materials basis.
Advice was also received from the Company’s legal advisers, Freshfields LLP,
on the operation of the Company’s employee share schemes and on corporate
governance matters. Clifford Chance LLP also provided advice in relation to
pension schemes.
The Committee is satisfied that the advice received from its advisers was
objective and independent and that the Deloitte engagement partner and
the team that provide remuneration advice to the Committee do not have
any connections that may impair their independence.
Members of management including Susan Martindale, the Group HR Director,
and Craig Provett, the Director of Compensation and Benefits, are invited to
attend meetings on remuneration matters where appropriate. They are not
present when matters affecting their own remuneration arrangements are
discussed. The Company Chair does not attend Board or Committee
meetings when his remuneration is under review.
Phil Urban and Tim Jones were present at meetings where the Company’s
long-term and short-term incentive arrangements and share schemes were
discussed. However, each declared an interest in the matters under review
and did not vote on their own arrangements.
b. Fees are shown net of VAT. 20% VAT was paid on the advisers’ fees shown above.
Mitchells & Butlers plc Annual Report and Accounts 2025
117
Financial Statements Other Information
Report on Directors’ remuneration continued
Previous AGM voting outcomes
At the last AGM (held on 23 January 2025), a resolution on the annual report on remuneration was subject to an advisory vote.
The table below sets out details of this advisory vote at the 2025 AGM, and also the outcome of the vote on our remuneration policy at the 2024 AGM:
Votes cast Votes for
a
% Votes against % Votes withheld
b
Approval of annual report on remuneration 535,915,910 535,033,047 99.84 882,863 0.16 47,494
Approval of remuneration policy at 2024 AGM 535,062,052 509,875,972 95.29 25,186,080 4.71 61,730
a. The ‘For’ vote includes those giving the Company Chair discretion.
b. A vote withheld is not a vote in law and is not counted in the calculation of the votes ‘For’ or ‘Against’ the resolution.
Votes ‘For’ and ‘Against’ are expressed as a percentage of votes cast.
The Board was pleased with the very high levels of support for both the new policy and the annual report on remuneration.
The Directors’ Remuneration Report has been approved by the Board of Mitchells & Butlers plc.
Amanda Brown
Chair of the Remuneration Committee
27 November 2025
Annual Report and Accounts 2025 Mitchells & Butlers plc118
Strategic Report
Introduction
Governance
Details the financial performance of the
Group in FY 2025 in comparison to its
performance in prior years.
Financial Statements
In this section
120 Independent auditor’s report to the
members of Mitchells & Butlers plc
128 Group income statement
129 Group statement of comprehensive
income
130 Group balance sheet
131 Group statement of changes in equity
132 Group cash flow statement
Notes to the consolidated financial
statements
133 Section 1 – Basis of preparation
136 Section 2 – Results for the period
136 2.1 Segmental analysis
136 2.2 Separately disclosed items
137 2.3 Revenue and operating costs
139 2.4 Taxation
142 2.5 Earnings per share
143 Section 3 – Operating assets and liabilities
143 3.1 Property, plant and equipment
148 3.2 Leases
152 3.3 Impairment
153 3.4 Working capital
155 3.5 Provisions
156 3.6 Goodwill and other intangible
assets
158 Section 4 – Capital structure and
financing costs
158 4.1 Borrowings
160 4.2 Finance costs and income
160 4.3 Financial instruments
169 4.4 Net debt
171 4.5 Pensions
175 4.6 Share-based payments
177 4.7 Equity
179 Section 5 – Other notes
179 5.1 Acquisitions
180 5.2 Related party transactions
181 5.3 Subsidiaries and associates
183 Mitchells & Butlers plc Company
financial statements
185 Notes to the Mitchells & Butlers plc
Company financial statements
52 weeks ended 27 September 2025
119
Other InformationFinancial Statements
119 Mitchells & Butlers plc Annual Report and Accounts 2025
Independent auditor’s report to the members
of Mitchells & Butlers plc
1. Our opinion is unmodified
We have audited the financial statements of Mitchells & Butlers plc
(“the Company”) for the 52 week period ended 27 September 2025 which
comprise the Group Income Statement, the Group Statement of Comprehensive
Income, the Group and Company Balance Sheets, the Group and Company
Statements of Changes in Equity, the Group Cash Flow Statement, and the
related notes, including the accounting policies within notes 1 to 5.3 of the Group
financial statements and notes 1 to 10 of the Company financial statements.
In our opinion:
• the financial statements give a true and fair view of the state of the
Group’s and of the parent Company’s affairs as at 27 September 2025
and of the Group’s profit for the 52 week period then ended;
• the Group financial statements have been properly prepared in
accordance with UK-adopted international accounting standards;
• the parent Company financial statements have been properly
prepared in accordance with UK accounting standards, including FRS
101 Reduced Disclosure Framework and
• the financial statements have been prepared in accordance with the
requirements of the Companies Act 2006.
Basis for opinion
We conducted our audit in accordance with International Standards on
Auditing (UK) (“ISAs (UK)”) and applicable law. Our responsibilities are
described below. We believe that the audit evidence we have obtained is a
sufficient and appropriate basis for our opinion. Our audit opinion is consistent
with our report to the audit committee.
We were first appointed as auditor by the shareholders on 25 January 2022.
The period of total uninterrupted engagement is for the 4 financial periods
ended 27 September 2025. We have fulfilled our ethical responsibilities
under, and we remain independent of the Group in accordance with, UK
ethical requirements including the FRC Ethical Standard as applied to listed
public interest entities. No non-audit services prohibited by that standard
were provided.
Overview
Materiality:
Group financial
statements as a whole
£26.5 million (2024:£24.0 million)
0.49% (2024: 0.46%) of total assets
Key audit matters vs 2024
Recurring risks Valuation of the freehold and
long leasehold restaurant and
pub estate
Recoverability of parent
Company investments
in subsidiaries
Annual Report and Accounts 2025 Mitchells & Butlers plc120
Governance
Strategic Report
Introduction
Financial Statements
2. Key audit matters: our assessment of risks of material misstatement
Key audit matters are those matters that, in our professional judgement, were of most significance in the audit of the financial statements and include the most
significant assessed risks of material misstatement (whether or not due to fraud) identified by us, including those which had the greatest effect on: the overall
audit strategy; the allocation of resources in the audit; and directing the efforts of the engagement team. We summarise below the key audit matters
(unchanged from 2024), in decreasing order of audit significance, in arriving at our audit opinion above, together with our key audit procedures to address
those matters and, as required for public interest entities, our results from those procedures. These matters were addressed, and our results are based on
procedures undertaken, in the context of, and solely for the purpose of, our audit of the financial statements as a whole, and in forming our opinion thereon,
and consequently are incidental to that opinion, and we do not provide a separate opinion on these matters.
The risk Our response
Valuation of the
freehold and long
leasehold restaurant
and pub estate
(£4,407 million; 2024:
£4,260 million)
Refer to page 96 (Audit
Committee Report), pages
143-144 (accounting policy)
and pages 145-147 (financial
disclosures).
Subjective estimate
The Group holds its freehold
and long leasehold property
estate at fair value, with a
revaluation taking place as at
the balance sheet date. We
determined that the valuation
of the Group’s property estate
is a major source of estimation
uncertainty.
The valuation involves the
determination of key
assumptions, being fair
maintainable trade (FMT) and
applicable trading multiples by
category and location.
These estimations are inherently
subjective and small changes in
the assumptions used to value
the Group’s estate could have
a potential range of reasonable
outcomes greater than our
materiality for the financial
statements as a whole and
possibly many times that
amount. The financial
statements (note 3.1) disclose
the sensitivity estimated by
the Group.
Key elements of estimation
uncertainty are due to the
following business risks:
• Economic environment (cost
inflation) and consumer
changes (demographic
changes) have led to
increased uncertainty of
maintainable performance
based on historical trends.
• Capital market sentiment
of the sector remains in
recovery and the sector
has been trading below its
historical levels, leading to
a deficit between market
capitalisation and asset
carrying value of the Group
as a whole.
We performed the tests below rather than seeking to rely on any of the Group’s controls
because the nature of the balance is such that we would expect to obtain audit evidence
primarily through the detailed procedures described.
Our procedures included:
Evaluating the valuation approach:
Meeting with the Group’s external valuers and relevant Group management to critically
assess the valuation assumptions and methodology used in valuing the properties and
the market evidence used by the valuers to support their assumptions;
Assessing valuer’s credentials:
Evaluating the independence, professional qualification, competence and experience
of the internal and external valuers engaged by the Group;
Benchmarking assumptions:
Using our own valuation specialists to benchmark the key assumptions, being FMT and
trading multiples, for a sample of properties against comparable market data;
Comparing assumptions against market capitalisation:
Comparing the Group’s market capitalisation to the sum of discounted cashflows to
assess the reasonableness of those cash flows which were consistent with those used
to help inform our assessment of FMT.
Agreeing inputs:
Agreeing observable inputs for a sample of properties to source documentation;
Sensitivity analysis:
Assessing the sensitivity of the overall valuation to changes in key assumptions, being the
FMT and trading multiples; and
Assessing transparency:
Assessing whether the Group’s disclosures about the sensitivity of the estate valuation
to changes in key assumptions reflects the inherent risks.
Our results
We found the valuation of the freehold and long leasehold restaurant and pub estate
to be acceptable (2024: acceptable).
Other Information
Mitchells & Butlers plc Annual Report and Accounts 2025
121
2. Key audit matters: our assessment of risks of material misstatement continued
The risk Our response
Recoverability of
parent Company
investments in
subsidiaries
(£1,966 million; 2024:
£1,966 million)
Refer to page 186
(accounting policy and
financial disclosures).
Low risk high value
The carrying amount of the
parent Company’s investments
in subsidiaries represents 72%
(2024: 71%) of the parent
Company’s total assets.
Their recoverability is not at
a high risk of material
misstatement or subject to
significant judgement. However,
due to their materiality in the
context of the parent Company
financial statements, this is
considered to be the area that
had the greatest effect on our
overall parent Company audit.
We performed the tests below rather than seeking to rely on any of the Company’s
controls because the nature of the balance is such that we would expect to obtain audit
evidence primarily through the detailed procedures described.
Our procedures included:
Test of detail:
Comparing the carrying amount of 100% of investments with the relevant subsidiaries’
draft balance sheet to identify whether their net assets, being an approximation of their
minimum recoverable amount, are in excess of their carrying amount and assess whether
those subsidiaries have historically been profit-making;
Assessing subsidiary audits:
Considering the results of our work on those subsidiaries’ profits and net assets.
Our results:
We found the parent Company’s conclusion that there is no impairment of its
investments in subsidiaries to be acceptable (2024: acceptable).
Independent auditor’s report to the members of Mitchells & Butlers plc continued
Annual Report and Accounts 2025 Mitchells & Butlers plc122
Governance
Strategic Report
Introduction
Financial Statements
3. Our application of materiality and an overview of the scope
of our audit
Our application of materiality
Materiality for the Group financial statements as a whole was set at
£26.5 million (2024: £24.0 million), determined with reference to a benchmark
of Group total assets, of which it represents 0.49% (2024: 0.46%).
Materiality for the parent Company financial statements as a whole was set at
£23.1 million (2024: £18.7 million), determined with reference to a benchmark
of Company total assets, of which it represents 0.85% (2024: 0.68%).
In line with our audit methodology, our procedures on individual account
balances and disclosures were performed to a lower threshold, performance
materiality, so as to reduce to an acceptable level the risk that individually
immaterial misstatements in individual account balances add up to a material
amount across the financial statements as a whole.
Performance materiality was set at 75% (2024: 75%) of materiality for the
financial statements as a whole, which equates to £19.8 million (2024:
£18.0 million) for the Group and £17.3 million (2024: £14 million) for the
parent Company. We applied this percentage in our determination of
performance materiality because we did not identify any factors indicating
an elevated level of risk.
We agreed to report to the Audit Committee any corrected or uncorrected
identified misstatements exceeding £1.3 million (2024: £1.2 million), in
addition to other identified misstatements that warranted reporting on
qualitative grounds.
Overview of the scope of our audit
This year, we applied the revised group auditing standard in our audit of the
consolidated financial statements. The revised standard changes how an
auditor approaches the identification of components, and how the audit
procedures are planned and executed across components.
In particular, the definition of a component has changed, shifting the focus
from how the entity prepares financial information to how we, as the group
auditor, plan to perform audit procedures to address group risks of material
misstatement (“RMMs”). Similarly, the group auditor has an increased role in
designing the audit procedures as well as making decisions on where these
procedures are performed (centrally and/or at component level) and how
these procedures are executed and supervised. As a result, we assess
scoping and coverage in a different way and comparisons to prior period
coverage figures are not meaningful. In this report we provide an indication
of scope coverage on the new basis.
We performed risk assessment procedures to determine which of the
Group’s components are likely to include risks of material misstatement to
the Group financial statements and which procedures to perform at these
components to address those risks.
In total, we identified 3 components, having considered our evaluation of
the Group’s operational structure, the existence of common information
systems, the existence of common risk profile across entities, geographical
locations, and our ability to perform audit procedures centrally.
Of those, we identified 1 quantitatively significant component which
contained the largest percentages of either total revenue or total assets
of the Group, for which we performed audit procedures.
Accordingly, we performed audit procedures on 1 component. We also
performed the audit of the parent Company.
We set the component materiality of £26.0 million, having regard to the mix
of size and risk profile of the Group across the components.
Our audit procedures covered 95% of Group revenue. We performed audit
procedures in relation to components that accounted for 99% of Group profit
before tax and 98% of Group total assets.
Impact of controls on our group audit
The Mitchells & Butlers plc Group operates with a diverse range of IT
systems across its operating business. We used IT auditors to assist us in
obtaining an understanding of the Group’s IT environment and applications
relevant to our audit. Given the diverse nature of the IT systems, we determined
a substantive audit approach was most efficient in predominantly all areas
of our audit.
As we did not rely upon automated or manual controls, we performed
additional substantive testing to respond to the risks identified. This included
performing a direct testing approach over the completeness and reliability of
data used in our data-oriented approach to revenue and journals, and considering
both manual and automated journals in our work to respond to the risk of
management override of controls.
Group materiality
£26.5 million
(2024: £24.0 million)
£26.5m
Whole financialstatements
materiality (2024: £24.0m)
£19.8m
Whole financialstatements
performance materiality
(2024: £18.0m)
£26.0m
Materiality at 1 component
(2024: range of
£12.0m–£21.6m)
£1.3m
Misstatements reported to the
audit committee (2024: £1.2m)
Group total assets
£5,393 million
(2024: £5,245 million)
Group materiality
Group total assets
Other Information
Mitchells & Butlers plc Annual Report and Accounts 2025
123
4. The impact of climate change in our audit
In planning our audit, we have considered the potential impacts of climate
change on the Group’s business and its financial statements.
The Group has set out its target to achieve Net Zero emissions by 2040,
including Scope 1, 2 and 3 emissions, zero operational waste to landfill by
2030 and to reduce food waste by 50% by 2030 (from FY 2019 baselines).
Climate-related risks and opportunities could have a significant impact on
the Group’s business and operations in the long term. There is the possibility
that climate change risks, both physical and transitional, could affect the
long-term profitability of the business. These risks are discussed within the
annual report, however, the costs of transition and how demand may be
impacted by any price increases needed to recover these costs cannot yet
be reasonably estimated by the Group.
As part of our audit we have performed a risk assessment, including making
enquiries of management, reading board meeting minutes and applying our
knowledge of the Group and sector in which it operates to understand the
extent of the potential impact of climate change risk on the Group’s financial
statements. Taking into account the nature of the business and the time
horizon of risks identified, we have not assessed climate related risk to be
significant to our audit this financial year. There was no impact on our key
audit matters.
We have read the Group’s disclosure of climate related information in the
front half of the annual report and considered consistency with the financial
statements and our knowledge gained from our financial statement audit work.
5. Going concern
The directors have prepared the financial statements on the going concern
basis as they do not intend to liquidate the Group or the Company or to cease
their operations, and as they have concluded that the Group’s and the
Company’s financial position means that this is realistic. They have also
concluded that there are no material uncertainties that could have cast
significant doubt over their ability to continue as a going concern for at least
12 months from the date of approval of the financial statements (“the going
concern period”).
We used our knowledge of the Group, its industry, and the general economic
environment to identify the inherent risks to its business model and analysed
how those risks might affect the Group’s financial resources or ability to
continue operations over the going concern period. The risks that we
considered most likely to adversely affect the Group’s available financial
resources and metrics relevant to debt covenants over this period were:
• Maintenance of sales growth in the face of pressure on consumer
spending power
• Future outlook for cost inflation specifically in food costs, drink costs,
energy prices and wages, salaries & related costs.
We also considered less predictable but realistic second order impacts, such
as global political developments, supply chain disruptions and government
policy that could affect demand in the Group’s markets.
We considered whether these risks could plausibly affect the liquidity and
covenant compliance in the going concern period by assessing the directors’
sensitivities over the level of available financial resources and covenant
thresholds indicated by the Group’s financial forecasts taking account of
severe, but plausible adverse effects that could arise from these risks
individually and collectively.
We considered whether the going concern disclosure in note 1 to the
financial statements gives a full and accurate description of the directors’
assessment of going concern, including the identified risks, dependencies,
and related sensitivities. We assessed the completeness of the going
concern disclosure.
Our conclusions based on this work:
• we consider that the directors’ use of the going concern basis of
accounting in the preparation of the financial statements is appropriate;
• we have not identified, and concur with the directors’ assessment that
there is not, a material uncertainty related to events or conditions that,
individually or collectively, may cast significant doubt on the Group’s
or Company’s ability to continue as a going concern for the going
concern period;
• we have nothing material to add or draw attention to in relation to the
directors’ statement in note 1 to the financial statements on the use of the
going concern basis of accounting with no material uncertainties that may
cast significant doubt over the Group and Company’s use of that basis for
the going concern period, and we found the going concern disclosure in
note 1 to be acceptable; and
• the related statement under the UK Listing Rules set out on page 60 is
materially consistent with the financial statements and our audit knowledge.
However, as we cannot predict all future events or conditions and as
subsequent events may result in outcomes that are inconsistent with
judgements that were reasonable at the time they were made, the above
conclusions are not a guarantee that the Group or the Company will continue
in operation.
Independent auditor’s report to the members of Mitchells & Butlers plc continued
Annual Report and Accounts 2025 Mitchells & Butlers plc124
Governance
Strategic Report
Introduction
Financial Statements
6. Fraud and breaches of laws and regulations – ability
to detect
Identifying and responding to risks of material misstatement due
to fraud
To identify risks of material misstatement due to fraud (‘fraud risks’) we
assessed events or conditions that could indicate an incentive or pressure to
commit fraud or provide an opportunity to commit fraud. Our risk assessment
procedures included:
• Enquiring of directors, the audit committee, internal audit and inspection
of policy documentation as to the Group’s and parent Company’s
high-level policies and procedures to prevent and detect fraud, including
the internal audit function, and the Group’s and parent Company’s
channels for ‘whistleblowing’, as well as whether they have knowledge
of any actual, suspected or alleged fraud.
• Reading Board, audit committee, risk and remuneration committee
meeting minutes.
• Considering remuneration incentive schemes and performance targets
for directors and other management.
• Using analytical procedures to identify any unusual or unexpected
relationships.
We communicated identified fraud risks throughout the audit team and
remained alert to any indications of fraud throughout the audit.
As required by auditing standards, and taking into account possible pressures
to meet profit targets, our overall knowledge of the control environment,
we performed procedures to address the risk of management override of
controls, in particular the risk that Group and component management may
be in a position to make inappropriate accounting entries and the risk of bias
in accounting estimates and judgements such as the valuation of the freehold
and long leasehold estate. On this audit we do not believe there is a fraud
risk related to revenue recognition because Group revenue is generated
predominantly through the operation of pubs & restaurants. This revenue
contains no significant judgements and is comprised of a large number of
small, simple transactions that are received in cash or credit card receivables
at the point of sale. Therefore, there is limited opportunity for management
to manipulate or to fraudulently post the volume of transactions that would
be required to have a material impact on revenue.
We did not identify any additional fraud risks.
We performed procedures including:
• Identifying journal entries and other adjustments to test based on risk
criteria and comparing the identified entries to supporting documentation.
These included those posted by senior finance management/those
posted to unusual accounts related to revenue, cash and borrowings.
• Assessing whether the judgements made in making accounting estimates
are indicative of a potential bias.
Identifying and responding to risks of material misstatement due
to non-compliance with laws and regulations
We identified areas of laws and regulations that could reasonably be expected
to have a material effect on the financial statements from our general commercial
and sector experience, and through discussion with the directors and other
management (as required by auditing standards), and from inspection of the
Group’s regulatory and legal correspondence and discussed with the directors
and other management the policies and procedures regarding compliance
with laws and regulations.
As the Group is regulated, our assessment of risks involved gaining an
understanding of the control environment including the entity’s procedures
for complying with regulatory requirements.
We communicated identified laws and regulations throughout our team and
remained alert to any indications of non- compliance throughout the audit.
The potential effect of these laws and regulations on the financial statements
varies considerably.
Firstly, the Group is subject to laws and regulations that directly affect the
financial statements including financial reporting legislation (including
related companies legislation), distributable profits legislation, pension
legislation and taxation legislation and we assessed the extent of compliance
with these laws and regulations as part of our procedures on the related
financial statement items.
Secondly, the Group is subject to many other laws and regulations where the
consequences of non-compliance could have a material effect on amounts or
disclosures in the financial statements, for instance through the imposition of
fines or litigation or the loss of the Group’s license to operate. We identified
the following areas as those most likely to have such an effect: licensing
regulations, responsible drinking regulations, planning and building legislation,
health and safety, data protection laws, anti-bribery, employment law,
recognising the nature of the Group’s activities. Auditing standards limit the
required audit procedures to identify non-compliance with these laws and
regulations to enquiry of the directors and other management and inspection
of regulatory and legal correspondence, if any. Therefore if a breach of
operational regulations is not disclosed to us or evident from relevant
correspondence, an audit will not detect that breach.
Context of the ability of the audit to detect fraud or breaches of law
or regulation
Owing to the inherent limitations of an audit, there is an unavoidable risk that
we may not have detected some material misstatements in the financial
statements, even though we have properly planned and performed our audit
in accordance with auditing standards. For example, the further removed
non-compliance with laws and regulations is from the events and transactions
reflected in the financial statements, the less likely the inherently limited
procedures required by auditing standards would identify it.
In addition, as with any audit, there remained a higher risk of non-detection
of fraud, as these may involve collusion, forgery, intentional omissions,
misrepresentations, or the override of internal controls. Our audit procedures
are designed to detect material misstatement. We are not responsible for
preventing non-compliance or fraud and cannot be expected to detect
non-compliance with all laws and regulations.
Other Information
Mitchells & Butlers plc Annual Report and Accounts 2025
125
7. We have nothing to report on the other information in the
Annual Report
The directors are responsible for the other information presented in the
Annual Report together with the financial statements. Our opinion on the
financial statements does not cover the other information and, accordingly,
we do not express an audit opinion or, except as explicitly stated below,
any form of assurance conclusion thereon.
Our responsibility is to read the other information and, in doing so, consider
whether, based on our financial statements audit work, the information
therein is materially misstated or inconsistent with the financial statements
or our audit knowledge. Based solely on that work we have not identified
material misstatements in the other information.
Strategic report and directors’ report
Based solely on our work on the other information:
• we have not identified material misstatements in the strategic report and
the directors’ report;
• in our opinion the information given in those reports for the financial year
is consistent with the financial statements; and
• in our opinion those reports have been prepared in accordance with the
Companies Act 2006.
Directors’ remuneration report
In our opinion the part of the Directors’ Remuneration Report to be audited
has been properly prepared in accordance with the Companies Act 2006.
Disclosures of emerging and principal risks and longer-term viability
We are required to perform procedures to identify whether there is a
material inconsistency between the directors’ disclosures in respect of
emerging and principal risks and the viability statement, and the financial
statements and our audit knowledge.
Based on those procedures, we have nothing material to add or draw
attention to in relation to:
• the directors’ confirmation on page 92 that they have carried out a robust
assessment of the emerging and principal risks facing the Group, including
those that would threaten its business model, future performance,
solvency and liquidity;
• the Risks and Uncertainties disclosures describing these risks and how
emerging risks are identified, and explaining how they are being
managed and mitigated; and
• the directors’ explanation in the Corporate viability disclosure of how
they have assessed the prospects of the Group, over what period they
have done so and why they considered that period to be appropriate, and
their statement as to whether they have a reasonable expectation that the
Group will be able to continue in operation and meet its liabilities as they fall
due over the period of their assessment, including any related disclosures
drawing attention to any necessary qualifications or assumptions.
We are also required to review the Corporate viability disclosure, set out on
page 60 under the UK Listing Rules. Based on the above procedures, we
have concluded that the above disclosures are materially consistent with the
financial statements and our audit knowledge.
Our work is limited to assessing these matters in the context of only the
knowledge acquired during our financial statements audit. As we cannot
predict all future events or conditions and as subsequent events may result in
outcomes that are inconsistent with judgements that were reasonable at the
time they were made, the absence of anything to report on these statements
is not a guarantee as to the Group’s and Company’s longer-term viability.
Corporate governance disclosures
We are required to perform procedures to identify whether there is a
material inconsistency between the directors’ corporate governance
disclosures and the financial statements and our audit knowledge.
Based on those procedures, we have concluded that each of the following is
materially consistent with the financial statements and our audit knowledge:
• the directors’ statement that they consider that the annual report and
financial statements taken as a whole is fair, balanced and understandable,
and provides the information necessary for shareholders to assess the
Group’s position and performance, business model and strategy;
• the section of the annual report describing the work of the Audit
Committee, including the significant issues that the audit committee
considered in relation to the financial statements, and how these issues
were addressed; and
• the section of the annual report that describes the review of the effectiveness
of the Group’s risk management and internal control systems.
We are required to review the part of the Corporate Governance Statement
relating to the Group’s compliance with the provisions of the UK Corporate
Governance Code specified by the UK Listing Rules for our review. We have
nothing to report in this respect.
8. We have nothing to report on the other matters on which we
are required to report by exception
Under the Companies Act 2006, we are required to report to you if,
in our opinion:
• adequate accounting records have not been kept by the parent Company,
or returns adequate for our audit have not been received from branches
not visited by us; or
• the parent Company financial statements and the part of the Directors’
Remuneration Report to be audited are not in agreement with the
accounting records and returns; or
• certain disclosures of directors’ remuneration specified by law are not
made; or
• we have not received all the information and explanations we require for
our audit.
We have nothing to report in these respects.
Independent auditor’s report to the members of Mitchells & Butlers plc continued
Annual Report and Accounts 2025 Mitchells & Butlers plc126
Governance
Strategic Report
Introduction
Financial Statements
9. Respective responsibilities
Directors’ responsibilities
As explained more fully in their statement set out on page 80, the directors
are responsible for: the preparation of the financial statements including
being satisfied that they give a true and fair view; such internal control as they
determine is necessary to enable the preparation of financial statements that
are free from material misstatement, whether due to fraud or error; assessing
the Group and parent Company’s ability to continue as a going concern,
disclosing, as applicable, matters related to going concern; and using the
going concern basis of accounting unless they either intend to liquidate the
Group or the parent Company or to cease operations, or have no realistic
alternative but to do so.
Auditor’s responsibilities
Our objectives are to obtain reasonable assurance about whether the
financial statements as a whole are free from material misstatement,
whether due to fraud or error, and to issue our opinion in an auditor’s report.
Reasonable assurance is a high level of assurance, but does not guarantee
that an audit conducted in accordance with ISAs (UK) will always detect a
material misstatement when it exists. Misstatements can arise from fraud or
error and are considered material if, individually or in aggregate, they could
reasonably be expected to influence the economic decisions of users taken
on the basis of the financial statements.
A fuller description of our responsibilities is provided on the FRC’s website
at www.frc.org.uk/auditorsresponsibilities.
The Company is required to include these financial statements in an annual
financial report prepared under Disclosure Guidance and Transparency Rule
4.1.17R and 4.1.18R. This auditor’s report provides no assurance over
whether the annual financial report has been prepared in accordance with
those requirements.
10. The purpose of our audit work and to whom we owe
our responsibilities
This report is made solely to the Company’s members, as a body, in
accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit
work has been undertaken so that we might state to the Company’s members
those matters we are required to state to them in an auditor’s report and for
no other purpose. To the fullest extent permitted by law, we do not accept or
assume responsibility to anyone other than the Company and the Company’s
members, as a body, for our audit work, for this report, or for the opinions
we have formed.
Simon Haydn-Jones
(Senior Statutory Auditor)
for and on behalf of KPMG LLP, Statutory Auditor
Chartered Accountants
One Snowhill
Snowhill Queensway
Birmingham
B4 6GH
27 November 2025
Other Information
Mitchells & Butlers plc Annual Report and Accounts 2025
127

|  |  | 2025 |  |  | 2024 |
|  |  | 52 weeks |  |  | 52 weeks |
|  | Before |  |  | Before |  |
|  | separately | Separately |  | separately | Separately |
|  | disclosed | disclosed |  | disclosed | disclosed |
|  | items | items a | Total | items | items a | Total
| Notes | £m | £m | £m | £m | £m | £m
Revenue | 2.1, 2.3 | 2,711 | – | 2,711 | 2,610 | – | 2,610
Operating costs before depreciation, amortisation and movements in the valuation |  |  |  |  |  |  |
of the property portfolio | 2.2, 2.3 | (2,246) | (6) | (2,252) | (2,168) | – | (2,168)
Net profit arising on property disposals | 2.2, 2.3 | – | 1 | 1 | – | 2 | 2
EBITDA b before movements in the valuation of the property portfolio |  | 465 | (5) | 460 | 442 | 2 | 444
Depreciation, amortisation and movements in the valuation of the property portfolio | 2.2, 2.3 | (135) | (3) | (138) | (130) | (14) | (144)
Operating profit/(loss) |  | 330 | (8) | 322 | 312 | (12) | 300
Finance costs | 4.2 | (100) | – | (100) | (109) | – | (109)
Finance income | 4.2 | 9 | – | 9 | 10 | – | 10
Net pensions finance income/(charge) | 4.2, 4.5 | 7 | – | 7 | (2) | – | (2)
Profit/(loss) before tax |  | 246 | (8) | 238 | 211 | (12) | 199
Tax (charge)/credit | 2.2, 2.4 | (62) | 1 | (61) | (54) | 4 | (50)
Profit/(loss) for the period |  | 184 | (7) | 177 | 157 | (8) | 149
Earnings per ordinary share |  |  |  |  |  |  |
– Basic | 2.5 | 30.9p |  | 29.7p | 26.4p |  | 25.0p
– Diluted | 2.5 | 30.6p |  | 29.5p | 26.2p |  | 24.8p

a. Separately disclosed items are explained and analysed in note 2.2.
b. Earnings before interest, tax, depreciation, amortisation and movements in the valuation of the property portfolio. The Directors use a number of alternative performance
measures (APMs) that are considered critical to aid the understanding of the Group’s performance. Key measures are explained on pages 189 to 191 of this Report.
The notes on pages 133 to 182 form an integral part of these consolidated financial statements.
All results relate to continuing operations.
Group income statement
For the 52 weeks ended 27 September 2025
Annual Report and Accounts 2025 Mitchells & Butlers plc128
Governance
Strategic Report
Introduction
Financial Statements
Group statement of comprehensive income
For the 52 weeks ended 27 September 2025

|  | 2025 | 2024
|  | 52 weeks | 52 weeks
| Notes | £m | £m
Profit for the period |  | 177 | 149
Items that will not be reclassified subsequently to profit or loss: |  |  |
Unrealised gain on revaluation of the property portfolio | 3.1 | 88 | 254
Remeasurement of pension liability | 4.5 | (18) | 166
Tax relating to items not reclassified | 2.4 | (13) | (116)
|  | 57 | 304
Items that may be reclassified subsequently to profit or loss: |  |  |
Cash flow hedges: |  |  |
– Gain/(losses) arising during the period | 4.3 | 10 | (34)
– Reclassification adjustments for items included in profit or loss | 4.3 | 5 | 11
Tax relating to items that may be reclassified | 2.4 | (4) | 6
|  | 11 | (17)
Other comprehensive income after tax |  | 68 | 287
Total comprehensive income for the period |  | 245 | 436

The notes on pages 133 to 182 form an integral part of these consolidated financial statements.
Other Information
Mitchells & Butlers plc Annual Report and Accounts 2025
129

|  | 2025 | 2024
| Notes | £m | £m
Assets |  |  |
Goodwill and other intangible assets | 3.6 | 28 | 20
Property, plant and equipment | 3.1 | 4,591 | 4,419
Right-of-use assets | 3.2 | 291 | 307
Finance lease receivables | 3.2 | 10 | 11
Pension surplus | 4.5 | 132 | 164
Deferred tax asset | 2.4 | 2 | 3
Derivative financial instruments | 4.3 | 15 | 19
Total non-current assets |  | 5,069 | 4,943
Inventories | 3.4 | 26 | 27
Trade and other receivables | 3.4 | 79 | 98
Current tax asset |  | 2 | –
Finance lease receivables | 3.2 | 1 | 1
Cash and cash equivalents | 4.4 | 216 | 176
Total current assets |  | 324 | 302
Total assets |  | 5,393 | 5,245
Liabilities |  |  |
Pension liabilities | 4.5 | (1) | (1)
Trade and other payables | 3.4 | (473) | (482)
Current tax liabilities |  | – | (1)
Borrowings | 4.1 | (174) | (143)
Lease liabilities | 3.2 | (42) | (33)
Derivative financial instruments | 4.3 | (4) | (2)
Total current liabilities |  | (694) | (662)
Pension liabilities | 4.5 | (21) | (24)
Other payables | 3.4 | – | (8)
Borrowings | 4.1 | (900) | (1,041)
Lease liabilities | 3.2 | (392) | (414)
Derivative financial instruments | 4.3 | (11) | (27)
Deferred tax liabilities | 2.4 | (546) | (491)
Provisions | 3.5 | (13) | (12)
Total non-current liabilities |  | (1,883) | (2,017)
Total liabilities |  | (2,577) | (2,679)
Net assets |  | 2,816 | 2,566
Equity |  |  |
Called up share capital | 4.7 | 51 | 51
Share premium account | 4.7 | 358 | 357
Capital redemption reserve | 4.7 | 3 | 3
Revaluation reserve | 4.7 | 1,209 | 1,143
Own shares held | 4.7 | (10) | (9)
Hedging reserve | 4.7 | (10) | (21)
Translation reserve | 4.7 | 14 | 14
Retained earnings |  | 1,201 | 1,028
Total equity |  | 2,816 | 2,566

The notes on pages 133 to 182 form an integral part of these consolidated financial statements.
The consolidated financial statements were approved by the Board and authorised for issue on 27 November 2025.
They were signed on its behalf by:
Tim Jones
Chief Financial Officer
Group balance sheet
27 September 2025
Annual Report and Accounts 2025 Mitchells & Butlers plc130
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Financial Statements
Group statement of changes in equity
For the 52 weeks ended 27 September 2025

| Called | Share | Capital |  | Own |  |  |  |
| up share | premium | redemption | Revaluation | shares | Hedging | Translation | Retained | Total
| capital | account | reserve | reserve | held | reserve | reserve | earnings | equity
| £m | £m | £m | £m | £m | £m | £m | £m | £m
At 30 September 2023 | 51 | 357 | 3 | 951 | (5) | (4) | 14 | 763 | 2,130
Profit for the period | – | – | – | – | – | – | – | 149 | 149
Other comprehensive income/(expense) | – | – | – | 192 | – | (17) | – | 112 | 287
Total comprehensive income/(expense) | – | – | – | 192 | – | (17) | – | 261 | 436
Purchase of shares | – | – | – | – | (7) | – | – | – | (7)
Release of shares | – | – | – | – | 3 | – | – | (3) | –
Credit in respect of share-based payments | – | – | – | – | – | – | – | 6 | 6
Tax on share-based payment | – | – | – | – | – | – | – | 1 | 1
At 28 September 2024 | 51 | 357 | 3 | 1,143 | (9) | (21) | 14 | 1,028 | 2,566
Profit for the period | – | – | – | – | – | – | – | 177 | 177
Other comprehensive income/(expense) | – | – | – | 66 | – | 11 | – | (9) | 68
Total comprehensive income | – | – | – | 66 | – | 11 | – | 168 | 245
Share capital issued | – | 1 | – | – | – | – | – | – | 1
Purchase of shares | – | – | – | – | (5) | – | – | – | (5)
Release of shares | – | – | – | – | 4 | – | – | (4) | –
Credit in respect of share-based payments | – | – | – | – | – | – | – | 9 | 9
At 27 September 2025 | 51 | 358 | 3 | 1,209 | (10) | (10) | 14 | 1,201 | 2,816

The notes on pages 133 to 182 form an integral part of these consolidated financial statements.
Other Information
Mitchells & Butlers plc Annual Report and Accounts 2025
131

|  | 2025 | 2024
|  | 52 weeks | 52 weeks
| Notes | £m | £m
Cash flow from operations |  |  |
Operating profit |  | 322 | 300
Add back/(deduct): |  |  |
Movement in the valuation of the property portfolio | 2.2 | 3 | 14
Net profit arising on property disposals | 2.2 | (1) | (2)
Depreciation of property, plant and equipment | 2.3 | 96 | 92
Amortisation of intangibles | 2.3 | 3 | 4
Depreciation of right-of-use assets | 2.3 | 36 | 34
Cost charged in respect of share-based payments | 4.6 | 9 | 7
Administrative pension costs | 4.5 | 4 | 5
Amendment of past service cost in relation to the defined benefit obligation | 2.2 | 3 | –
Utilisation of pension surplus for DC contributions |  | 9 | –
Operating cash flow before movements in working capital and additional pension contributions |  | 484 | 454
Decrease/(increase) in inventories |  | 1 | (1)
Decrease in trade and other receivables |  | 16 | 44
(Decrease)/increase in trade and other payables |  | (17) | 8
Decrease in provisions |  | (3) | (1)
Pension contributions | 4.5 | (1) | (1)
Cash flow from operations |  | 480 | 503
Interest payments a |  | (82) | (96)
Interest (payments)/receipts on interest rate swaps a |  | (1) | 3
Interest receipts on cross currency swap a |  | 4 | 7
Interest payments on cross currency swap a |  | (3) | (5)
Other interest paid – lease liabilities | 4.4 | (14) | (17)
Borrowing facility fees paid |  | (1) | –
Interest received |  | 9 | 9
Tax paid |  | (24) | (18)
Net cash from operating activities |  | 368 | 386
Investing activities |  |  |
Acquisition of Pesto Restaurants Limited | 5.1 | – | (2)
Purchases of property, plant and equipment |  | (169) | (152)
Purchases of intangible assets |  | (12) | (2)
Proceeds from sale of property, plant and equipment |  | 1 | 1
Finance lease principal repayments received |  | 1 | 1
Net cash used in investing activities |  | (179) | (154)
Financing activities |  |  |
Issue of ordinary share capital |  | 1 | –
Purchase of own shares | 4.7 | (5) | (7)
Repayment of principal in respect of securitised debt b | 4.4 | (134) | (128)
Principal receipts on currency swap b | 4.4 | 21 | 21
Principal payments on currency swap b | 4.4 | (17) | (16)
Cash payments for the principal portion of lease liabilities | 4.4 | (39) | (41)
Repayment of other borrowings |  | – | (1)
Short term financing of employee advances |  | – | 2
Net cash used in financing activities |  | (173) | (170)
Net increase in cash and cash equivalents |  | 16 | 62
Cash and cash equivalents at the beginning of the period | 4.4 | 164 | 103
Foreign exchange movements |  | 1 | (1)
Cash and cash equivalents at the end of the period | 4.4 | 181 | 164

a. Interest paid is split to show gross payments on the interest rate and cross currency swaps.
b. Principal repayments on securitised debt are split to show repayments relating to the cross currency swap.
The notes on pages 133 to 182 form an integral part of these consolidated financial statements.
Group cash flow statement
For the 52 weeks ended 27 September 2025
Annual Report and Accounts 2025 Mitchells & Butlers plc132
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Strategic Report
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Financial Statements
Notes to the consolidated financial statements
Section 1 – Basis of preparation
General information
Mitchells & Butlers plc (the Company) is a public limited company limited by
shares and is registered in England and Wales. The Company’s shares are
listed on the London Stock Exchange. The address of the Company’s
registered office is shown on page 192.
The principal activities of the Company and its subsidiaries (the Group) and
the nature of the Group’s operations are set out in the Strategic Report on
pages 24 to 64.
The Group is required to prepare its consolidated financial statements in
accordance with UK-adopted International Financial Reporting Standards
(IFRSs) and in accordance with the Companies Act 2006.
The Group’s accounting reference date is 30 September. The Group draws
up its consolidated financial statements to the Saturday directly before or
following the accounting reference date, as permitted by section 390 (3) of
the Companies Act 2006. The period ended 27 September 2025 includes
52 trading weeks and the comparative period ended 28 September 2024
includes 52 trading weeks.
The consolidated financial statements have been prepared on the historical
cost basis as modified by the revaluation of freehold and long leasehold
properties, pension obligations and financial instruments.
The Group’s accounting policies have been applied consistently.
Going concern
The Group’s business activities, together with the factors likely to affect its
future development, performance and position, are set out in the Strategic
Report on pages 24 to 64. The financial position of the Group, its cash flows,
liquidity position and borrowing facilities are also described within the
Financial Review on pages 62 to 64.
Note 4.3 to the consolidated financial statements includes the Group’s
objectives, policies and processes for managing capital; its financial risk
management objectives; details of its financial instruments and hedging
activities; and, its exposures to credit and liquidity risks. As highlighted in
note 4.1 to the consolidated financial statements, the Group’s financing is
based on securitised debt and unsecured borrowing facilities.
The Directors have adopted the going concern basis in preparing these
financial statements after assessing the impact of identified principal risks
and their possible adverse impact on financial performance, specifically
revenue and cash flows throughout the going concern period, being
12 months from the date of signing of these financial statements.
The Group’s primary source of borrowings is through nine tranches of fully
amortising loan notes with a gross debt value of a little over £1bn as at the
end of the year. These are secured against the majority of the Group’s
property and future income streams. The principal repayment period varies
by class of note with maturity dates ranging from 2028 to 2036. Within this
financing structure there are two main covenants: the level of net worth
(being the net asset value of the securitisation group), and FCF to DSCR.
As at 27 September 2025 there was substantial headroom on the net worth
covenant. FCF to DSCR represents the multiple of Free Cash Flow (being
EBITDA less tax and required capital maintenance expenditure) generated
by sites within the structure to the cost of debt service (being the repayment
of principal, net interest charges and associated fees). This is tested quarterly
on both a trailing two quarter and four quarter basis.
The Group also has a committed unsecured credit facility of £150m,
with a negative pledge in favour of participating banks and an expiry date
in July 2028. At the balance sheet date there were no drawings under this
facility. This facility has two main financial covenants, based on the
performance of the unsecured estate: the ratio of EBITDAR to rent plus
interest (at a minimum of 1.25 times) and Net debt to EBITDA (to be no more
than 3.0 times), both tested on a half-yearly basis (for the prior four quarters).
In the year ahead the main uncertainties facing the Group are considered
to be the maintenance of sales growth in the face of pressure on consumer
spending power, and the rate of cost inflation. The outlook for these remains
uncertain, depending on a number of factors including consumer confidence,
global macroeconomic and political developments, supply chain disruptions
and Government policies.
The Directors have reviewed the financing arrangements against a base case
forward trading forecast. This forecast assumes continued mid single digit
growth in sales across the year. Cost inflation is assumed to increase to a
slightly higher level than the previous financial year driven primarily by
increased food input costs (notably red meat) and labour costs (which
include annualisation of increased levels of employers national insurance
contributions from April 2025). As a result an overall net increase of
approximately 6% across the cost base of the business of approximately
£2.2bn is expected. Under this base case the Group is able to stay within
securitisation and committed facility financial covenants and maintains
sufficient liquidity.
The Directors have also considered a severe but plausible downside scenario
covering adverse movements against the base forward forecast in both
sales and cost inflation, but no major disruption to supply chain or systems.
Some mitigation activity is taken including lower capital expenditure on site
remodel activity and a flex down of labour and site costs in line with reduced
sales. In this scenario sales are assumed to remain marginally in growth, but
at 2.5% below the base case forecast. Unmitigated cost inflation is also higher
in the areas of food, labour, duty and energy. In this downside scenario the
Group is again able to stay within securitisation and committed facility
financial covenants, whilst maintaining sufficient liquidity.
Furthermore, the Directors have considered a reverse stress test analysis,
to review the headroom below which trading could fall beyond the downside
scenario before the earlier of financial covenants becoming breached, or
available liquidity becoming insufficient. This analysis indicates that on
consistent cost assumptions, sales would be able to fall by approximately
4% beyond the downside case throughout the assessment period before
financial covenants were breached, when tested at Q4 FY 2026 being the
last full testing period within the 12 month going concern assessment period.
In this scenario the Group would still have sufficient available liquidity.
After due consideration of these factors, the Directors therefore believe
that it remains appropriate to prepare the financial statements on a going
concern basis.
A review of longer-term viability is provided on page 60 which assesses the
Group’s ability to continue and to meet its liabilities as they fall due over
a longer, three year, period.
Other Information
Mitchells & Butlers plc Annual Report and Accounts 2025
133
Foreign currencies
Transactions in foreign currencies are recorded at the exchange rates ruling
on the dates of the transactions. Monetary assets and liabilities denominated
in foreign currencies are translated into the functional currency at the relevant
rates of exchange ruling at the balance sheet date. Foreign exchange
differences arising on translation are recognised in the Group income
statement. Non-monetary assets and liabilities are measured at cost using
the exchange rate on the date of the initial transaction.
The consolidated financial statements are presented in pounds sterling
(rounded to the nearest million), being the functional currency of the primary
economic environment in which the parent and most subsidiaries operate.
On consolidation, the assets and liabilities of the Group’s overseas operations
are translated into sterling at the relevant rates of exchange ruling at the
balance sheet date. The results of overseas operations are translated into
sterling at average rates of exchange for the period. Exchange differences
arising from the translation of the results and the retranslation of opening net
assets denominated in foreign currencies are taken directly to the Group’s
translation reserve. When an overseas operation is sold, such exchange
differences are recognised in the Group income statement as part of the
gain or loss on sale.
The results of overseas operations have been translated into sterling at the
weighted average euro rate of exchange for the period of £1 = €1.17 (2024
£1 = €1.15), where this is a reasonable approximation to the rate at the dates of
the transactions. Euro and US dollar denominated assets and liabilities have
been translated at the relevant rate of exchange at the balance sheet date of
£1 = €1.14 (2024 £1 = €1.20) and £1 = $1.34 (2024 £1 = $1.34) respectively.
New and amended IFRS Standards that are effective for the
current period
The International Accounting Standards Board (IASB) and International
Financial Reporting Interpretations Committee (IFRIC) have issued the
following standards and interpretations which have been adopted by the
Group in these consolidated financial statements for the first time with no
material impact.

Accounting standard | Effective date
Amendments to IFRS 16 Leases | 1 January 2024
(Lease Liability in a Sale and Leaseback) |
Amendments to IAS 1 Presentation | 1 January 2024
of Financial Statements |
(Classification of liabilities as Current |
or Non-Current and Non-current |
Liabilities with Covenants) |
Amendments to IAS 7 Statement of Cash Flows and IFRS 7 Financial | 1 January 2024
Instruments (Disclosures – Supplier |
Finance Arrangements) |

Section 1 – Basis of preparation continued
Notes to the consolidated financial
statements continued
Basis of consolidation
The consolidated financial statements incorporate the financial statements
of Mitchells & Butlers plc (‘the Company’) and entities controlled by the
Company (its subsidiaries).
Control is achieved when the Company:
• has the power over the investee;
• is exposed, or has rights, to variable return from its involvement with the
investee; and
• has the ability to use its power to affect its returns.
The Company reassesses whether or not it controls an investee if facts and
circumstances indicate that there are changes to one or more of the three
elements of control listed above.
When the Company has less than a majority of voting rights of an investee,
it considers that it has power over the investee when the voting rights are
sufficient to give it the practical ability to direct the relevant activities of the
investee unilaterally. The Company considers all relevant facts and
circumstances in assessing whether or not the Company’s voting rights in
an investee are sufficient to give it power, including:
• the size of the Company’s holding of voting rights relative to the size
and dispersion of holdings of the other vote holders;
• potential voting rights held by the Company, other vote holders
or parties;
• rights arising from other contractual arrangements; and
• any additional facts and circumstances that indicate that the Company
has, or does not have, the current ability to direct the relevant activities
at the time that decisions need to be made, including voting patterns at
the previous shareholders’ meetings.
Consolidation of a subsidiary begins when the Company obtains control over
the subsidiary and ceases when the Company loses control of the subsidiary.
Specifically, the results of the subsidiaries acquired or disposed of during
the period are included in the Group income statement from the date the
Company gains control until the date when the Company ceases to control
the subsidiary.
The financial statements of the subsidiaries are prepared for the same
financial reporting period as the Company, with the exception of Pesto
Restaurants Limited which is prepared to 28 September 2025 (see note 5.3).
Intercompany transactions, balances and unrealised gains and losses on
transactions between Group companies are eliminated on consolidation.
Annual Report and Accounts 2025 Mitchells & Butlers plc134
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Financial Statements
New and revised IFRS Standards in issue but not yet effective
The IASB, IFRIC and the International Sustainability Standards Board (ISSB)
have issued the following standards and interpretations which could impact
the Group, with an effective date for financial periods beginning on or after
the dates disclosed below:

Accounting standard |  | Effective date
Amendments to IAS 21 The Effects |  | 1 January 2025
of Changes in Foreign Exchange |  |
Rates (Lack of Exchangeability) |  |
Amendments to IFRS 9 Financial |  | 1 January 2026
Instruments and IFRS 7 Financial |  |
Instruments: Disclosures |  |
(Amendments to the Classification |  |
and Measurement of Financial |  |
Instruments) |  |
Annual Improvements to IFRS |  | 1 January 2026
Accounting Standards – |  |
Amendments to: |  |
• | IFRS 1 First-time Adoption of |
| International Financial Reporting |
| Standards; |
• | IFRS 7 Financial Instruments: |
| Disclosures and its |
| accompanying Guidance on |
| implementing IFRS 7; |
• | IFRS 9 Financial Instruments; |
• | IFRS 10 Consolidated Financial |
| Statements; and |
• | IAS 7 Statement of Cash flows |
IFRS 18 Presentation and Disclosure |  | 1 January 2027
in Financial Statements |  |

The Directors do not expect that the adoption of the standards listed above
will have a material impact on the consolidated financial statements in future
periods. With respect to IFRS 18, the Group is still assessing the potential
impact of this standard on presentation and disclosures.
Critical accounting judgements and key sources of
estimation uncertainty
The preparation of the consolidated financial statements requires
management to make judgements, estimates and assumptions in the
application of accounting policies that affect reported amounts of assets,
liabilities, income and expense.
Estimates and judgements are periodically evaluated and are based on
historical experience and other factors including expectations of future
events that are believed to be reasonable under the circumstances. Actual
results may differ from these estimates.
Judgements and estimates for the period remain largely unchanged from the
prior period.
Significant accounting estimates:
The significant accounting estimate with a significant risk of a material change
to the carrying value of assets and liabilities within the next year in terms of
IAS 1 Presentation of Financial Statements, is:
• Fair value of freehold and long leasehold properties – see note 3.1
Other areas of judgement are described in each section listed below:
• Determination of items that are separately disclosed – see note 2.2
• Impairment review of short leasehold properties and right-of-use assets
– see note 3.3
• Recognition of pension surplus – see note 4.5
Other sources of estimation uncertainty are described in:
• Impairment review of short leasehold properties and right-of-use assets
– see note 3.3
Other Information
Mitchells & Butlers plc Annual Report and Accounts 2025
135
Section 2 – Results for the period
2.1 Segmental analysis
Accounting policies
Operating segments
IFRS 8 Operating Segments requires operating segments to be based on the Group’s internal reporting to its Chief Operating Decision Maker (CODM).
The CODM is regarded as the Chief Executive together with other Board members. The Group trades in one business segment (that of operating pubs
and restaurants) and the Group’s brands meet the aggregation criteria set out in Paragraph 12 of IFRS 8. Economic indicators assessed in determining that
the aggregated operating segments share similar economic characteristics include: expected future financial performance; operating and competitive
risks; and return on invested capital. As such, the Group reports the business as one reportable business segment.
The CODM uses EBITDA and operating profit before interest and separately disclosed items as the key measures of the Group’s results on an
aggregated basis.
Geographical segments
Substantially all of the Group’s business is conducted in the United Kingdom. In presenting information by geographical segment, segment revenue
and non-current assets are based on the geographical location of customers and assets.
Geographical segments

|  | UK | Germany |  | Total |
| 2025 | 2024 | 2025 | 2024 | 2025 | 2024
| 52 weeks | 52 weeks | 52 weeks | 52 weeks | 52 weeks | 52 weeks
| £m | £m | £m | £m | £m | £m
Revenue – sales to third parties | 2,598 | 2,493 | 113 | 117 | 2,711 | 2,610
Segment non-current assets a | 4,868 | 4,706 | 56 | 51 | 4,924 | 4,757

a. Includes balances relating to intangibles, property, plant and equipment, right-of-use assets and finance lease receivables.
2.2 Separately disclosed items
Accounting policy
In addition to presenting information on an IFRS basis, the Group also presents adjusted profit and earnings per share information that excludes separately
disclosed items and the impact of any associated tax. Adjusted profit measures are presented excluding separately disclosed items as we believe this
provides management, investors and other stakeholders with useful additional information about the Group’s performance and supports a more effective
comparison of the Group’s trading performance from one period to the next. Adjusted profit and earnings per share information is used by management
to monitor business performance against both shorter-term budgets and forecasts but also against the Group’s longer-term strategic plans.
Judgement is used to determine those items which should be separately disclosed. This judgement includes assessment of whether an item is of sufficient
size or of a nature that is not consistent with normal trading activities.
Separately disclosed items are those which are separately identified by virtue of their size or incidence.
Accounting judgements
Judgement is used to determine those items which should be separately disclosed to allow an understanding of the adjusted trading performance of the
Group. This judgement includes assessment of whether an item is of sufficient size or of a nature that is not consistent with normal trading activities.
Separately disclosed items are identified as follows:
• Profit/(loss) arising on property disposals – property disposals are disclosed separately as they are not considered to be part of adjusted trade
performance and there is volatility in the size of the profit/(loss) in each accounting period.
• Movement in the valuation of the property portfolio – this is disclosed separately, due to the size and volatility of the movement in property valuation
each period, which can be partly driven by movements in the property market and discount rate where impairment reviews are completed. This
movement is also not considered to be part of the adjusted trade performance of the Group and would prevent comparability between periods of the
Group’s trading performance if not separately disclosed.
• Movements in contingent consideration – adjustments relating to the estimate of contingent consideration on acquisition of Pesto Restaurants Limited
are disclosed separately due to the nature of the transaction as it is not considered to be part of the adjusted trade performance of the Group.
• Amendment of the past service cost in relation to the defined benefit pension obligation relating to the 2018 High Court ruling on guaranteed minimum
pensions (GMPs) equalisations. Consistent with disclosure of the original estimation in the FY 2019 financial statements this has been disclosed
separately as it is not considered part of the adjusted trade performance of the Group and would prevent year on year comparability of the Group’s
trading if not separately disclosed.
Notes to the consolidated financial
statements continued
Annual Report and Accounts 2025 Mitchells & Butlers plc136
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Strategic Report
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Financial Statements
The items identified in the current period are as follows:

|  | 2025 | 2024
|  | 52 weeks | 52 weeks
| Notes | £m | £m
Separately disclosed items |  |  |
Remeasurement of contingent consideration | a | (3) | –
Amendment of past service cost in relation to the defined benefit obligation | b | (3) | –
Total separately disclosed items recognised within operating costs |  | (6) | –
Net profit arising on property disposals |  | 1 | 2
Movement in the valuation of the property portfolio: |  |  |
– Impairment reversal arising from the revaluation of freehold and long leasehold properties | c | 11 | 4
– Net impairment of short leasehold and unlicensed properties | d | (5) | –
– Net impairment of right-of-use assets | e | (8) | (17)
– Net impairment of computer software | f | – | (1)
– Net impairment of goodwill | g | (1) | –
Net movement in the valuation of the property portfolio |  | (3) | (14)
Total separately disclosed items before tax |  | (8) | (12)
Tax credit relating to above items |  | 1 | 4
Total separately disclosed items after tax |  | (7) | (8)

a. Loss on remeasurement of the contingent consideration relating to the acquisition of Pesto Restaurants Limited. See note 5.1 for further details.
b. In FY 2018 the High Court ruled that pensions provided to members who had contracted-out of their scheme must be recalculated to ensure payments reflect the equalisation
of state pension ages in the 1990s. An initial estimate for this liability of £19m was charged in FY 2019, and disclosed separately. Following the buy-in of the Mitchells & Butlers
Main Pension Plan during the 53 weeks ending 30 September 2023 work is ongoing to fully quantify the liability, which is now anticipated to cost an additional £3m.
c. The impairment arising from the Group’s revaluation of its freehold and long leasehold pub estate comprises an impairment credit as the result of a revaluation surplus that
reverses past impairments net of an impairment charge, where the carrying values of the properties exceed their recoverable amount. See note 3.1 for further details.
d. Impairment of short leasehold and unlicensed properties where their carrying values exceed their recoverable amounts, net of reversals of past impairments. See note 3.3 for
further details.
e. Impairment of right-of-use assets where their carrying values exceed their recoverable amounts, net of reversals of past impairments. See note 3.3 for further details.
f. Impairment of computer software where the carrying value exceeds the recoverable amount. See note 3.3 for further details.
g. Impairment of goodwill where the carrying value exceeds the recoverable amount. See note 3.3 for further details.
2.3 Revenue and operating costs
Accounting policies
Revenue recognition
Revenue is measured based on the consideration to which the Group expects to be entitled in a contract with a customer and excludes amounts collected
on behalf of third parties. The Group recognises revenue when it transfers control of a product or service to a customer.
Revenue – food and drink
The majority of revenue comprises food and drinks sold in the Group’s outlets. Revenue is recognised when control of the goods has transferred, being
at the point the customer purchases the goods at the outlet or on ordering through a delivery partner. Payment of the transaction price is due immediately
at the point the customer makes a purchase at the outlet, or on agreed terms where purchases are made through third-party delivery partners. Revenue
excludes sales-based taxes, and is net of any coupons and discounts.
Revenue – services
Revenue for services mainly represents income from gaming machines, hotel accommodation and rent receivable from unlicensed and leased operations.
Revenue for gaming machines and hotel accommodation is recognised at the point the service is provided and excludes sales-based taxes and discounts.
Rental income is received from operating leases where the Group acts as lessor for a number of unlicensed and leased operations. Income from these
leases is recognised on a straight-line basis over the term of the lease.
Operating profit
Operating profit is stated after charging separately disclosed items but before investment income and finance costs.
Supplier incentives
Supplier incentives and rebates are recognised within operating costs as they are earned. The accrued value at the reporting date is included in
other receivables.
Other Information
Mitchells & Butlers plc Annual Report and Accounts 2025
137
2.3 Revenue and operating costs continued
Revenue
Revenue is analysed as follows:

| 2025 | 2024
| 52 weeks | 52 weeks
| £m | £m
Food | 1,440 | 1,385
Drink | 1,172 | 1,132
Services | 99 | 93
| 2,711 | 2,610

Revenue from services includes rent receivable from unlicensed properties and leased operations of £8m (2024 £9m).
Food and drink revenue includes £21m (2024 £18m) in respect of gift card redemptions, which were sold in the prior period, and recorded within deferred
income at the prior period end.
Operating costs
Operating costs are analysed as follows:

| 2025 | 2024
| 52 weeks | 52 weeks
| £m | £m
Raw materials and food and drink consumables recognised as an expense a | 681 | 670
Changes in inventory of finished goods and work in progress | 1 | (2)
Employee costs | 1,023 | 946
Hire of plant and machinery | 24 | 23
Property operating lease costs b | 9 | 11
Utility costs | 103 | 107
Business rates | 79 | 77
Other pub costs | 266 | 271
Other central costs | 60 | 65
Operating costs before depreciation and amortisation and other separately disclosed items | 2,246 | 2,168
Other separately disclosed items (note 2.2) | 6 | –
| 2,252 | 2,168
Net profit arising on property disposals | (1) | (2)
Depreciation of property, plant and equipment (note 3.1) | 96 | 92
Depreciation of right-of-use assets (note 3.2) | 36 | 34
Amortisation of intangible assets (note 3.6) | 3 | 4
Net movement in the valuation of the property portfolio (note 2.2) | 3 | 14
Depreciation, amortisation and movements in the valuation of the property portfolio | 138 | 144
Total operating costs | 2,389 | 2,310

a. Supplier incentives are included as a reduction to the raw materials and consumables expense. These are not disclosed separately as the value is immaterial.
b. Property operating lease costs include service charge, insurance and turnover rents.
Section 2 – Results for the period continued
Notes to the consolidated financial
statements continued
Annual Report and Accounts 2025 Mitchells & Butlers plc138
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Strategic Report
Introduction
Financial Statements
Employee costs

| 2025 | 2024
| 52 weeks | 52 weeks
| £m | £m
Wages and salaries | 907 | 852
Share-based payments (note 4.6) | 9 | 7
Social security costs | 86 | 68
Pensions (note 4.5) | 21 | 19
Total employee costs | 1,023 | 946

The four-weekly average number of employees including part-time employees was 49,2 87 retail employees (2024 49,249) and 1,271 support employees
(2024 1,206).
Information regarding key management personnel is included in note 5.2. Detailed information regarding Directors’ emoluments, pensions, long-term
incentive scheme entitlements and their interests in share options is given in the Report on Directors’ remuneration in the information labelled as audited by
KPMG on pages 98 to 118.
Auditor remuneration

| 2025 | 2024
| 52 weeks | 52 weeks
| £m | £m
Fees payable to the Group’s auditor for the: |  |
– audit of the consolidated financial statements | 0.4 | 0.4
– audit of the Company’s subsidiaries’ financial statements | 0.6 | 0.6
Total audit fees a | 1.0 | 1.0
Total fees | 1.0 | 1.0

a. Auditor’s remuneration of £0.9m (2024 £0.9m) was paid in the UK and £0.1m (2024 £0.1m) was paid in Germany.
Fees payable to the Group auditor for audit-related assurance services in respect of covenant reporting and turnover certificates totalled £12k (2024 £10k).
2.4 Taxation
Accounting policies
The income tax (charge)/credit represents both the income tax payable, based on profits/(losses) for the period, and deferred tax and is calculated using
tax rates enacted or substantively enacted at the balance sheet date. Taxable profit differs from net profit as reported in the income statement because it
excludes items of income or expense which are not taxable. Income tax is recognised in the income statement except when it relates to items that are
charged or credited in other comprehensive income or directly in equity, in which case the income tax is also charged or credited in other comprehensive
income or directly in equity.
Deferred tax
Deferred tax is the tax expected to be payable or recoverable on differences between the carrying amount of assets and liabilities in the financial statements
and the corresponding tax bases used in the computation of taxable profits and is accounted for using the balance sheet liability method. Deferred tax
liabilities are generally recognised for all taxable temporary differences and deferred tax assets are recognised to the extent that it is probable that taxable
profits will be available against which deductible temporary differences can be utilised.
Deferred tax liabilities are recognised for taxable temporary differences arising on investments in subsidiaries and associates, except where the Group is
able to control the reversal of the temporary difference and it is probable that the temporary difference will not reverse in the foreseeable future. Deferred
tax assets arising from deductible temporary differences associated with such investments and interests are only recognised to the extent that it is probable
that there will be sufficient taxable profits against which to utilise the benefits of the temporary differences and they are expected to reverse in the
foreseeable future.
The carrying amount of deferred tax assets is reviewed at each balance sheet date and reduced to the extent that it is no longer probable that sufficient
taxable profits will be available to allow all or part of the asset to be recovered.
Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled, or the asset realised based on tax laws and
rates that have been substantively enacted at the balance sheet date. The amount of deferred tax recognised is based on the expected manner of
realisation or settlement of the carrying amount of assets and liabilities.
Other Information
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139
2.4 Taxation continued
Taxation – Group income statement

| 2025 | 2024
| 52 weeks | 52 weeks
| £m | £m
Current tax: |  |
– Corporation tax | (22) | (16)
Total current tax charge | (22) | (16)
Deferred tax: |  |
– Origination and reversal of temporary differences | (40) | (33)
– Amounts over/(under)-provided in prior periods | 1 | (1)
Total deferred tax charge | (39) | (34)
Total tax charge in the Group income statement | (61) | (50)
Further analysed as tax relating to: |  |
Profit before separately disclosed items | (62) | (54)
Separately disclosed items | 1 | 4
Total tax charge in the Group income statement | (61) | (50)

The standard rate of corporation tax applied to the reported profit is 25.0% (2024 25.0%).
The tax charge (2024 charge) in the Group income statement for the period is higher than (2024 in line with) the standard rate of corporation tax in the UK.
The differences are reconciled below:

| 2025 | 2024
| 52 weeks | 52 weeks
| £m | £m
Profit before tax | 238 | 199
Taxation charge at the UK standard rate of corporation tax of 25.0% (2024 25.0%) | (59) | (50)
Expenses not deductible | (4) | (3)
Permanent benefits | 1 | 4
Adjustments in respect of prior periods | 1 | (1)
Total tax charge in the Group income statement | (61) | (50)

Taxation for other jurisdictions is calculated at the rates prevailing in those jurisdictions.

| 2025 | 2024
| 52 weeks | 52 weeks
| £m | £m
Deferred tax in the Group income statement: |  |
Accelerated capital allowances | (12) | (14)
Tax losses – UK | (22) | (15)
Tax losses – Interest restriction | (5) | (7)
Retirement benefit obligations | 3 | 1
Share-based payments | – | 1
Unrealised gains on revaluations | (3) | –
Depreciated non-qualifying assets | 1 | –
Right of use assets | (1) | –
Total deferred tax charge in the Group income statement | (39) | (34)

Section 2 – Results for the period continued
Notes to the consolidated financial
statements continued
Annual Report and Accounts 2025 Mitchells & Butlers plc140
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Strategic Report
Introduction
Financial Statements
Taxation – other comprehensive income

| 2025 | 2024
| 52 weeks | 52 weeks
| £m | £m
Deferred tax: |  |
Items that will not be reclassified subsequently to profit or loss: |  |
– Unrealised gains due to revaluations – revaluation reserve | (22) | (62)
– Unrealised gains due to revaluations – retained earnings | 5 | (12)
– Remeasurement of pension liability | 4 | (42)
| (13) | (116)
Items that may be reclassified subsequently to profit or loss: |  |
– Cash flow hedges | (4) | 6
Total tax charge recognised in other comprehensive income | (17) | (110)

Tax relating to items recognised directly in equity

| 2025 | 2024
| 52 weeks | 52 weeks
| £m | £m
Deferred tax: |  |
– Tax credit related to share-based payments | – | 1

Taxation – Group balance sheet
The deferred tax assets and liabilities recognised in the Group balance sheet are shown below:

| 2025 | 2024
| £m | £m
Deferred tax assets: |  |
Derivative financial instruments | 4 | 8
Tax losses – UK | 6 | 28
Share-based payments | 4 | 4
Right-of-use assets | 5 | 6
Tax losses – Interest restriction | 1 | 6
Total deferred tax assets | 20 | 52
Deferred tax liabilities: |  |
Accelerated capital allowances | (98) | (86)
Rolled over and held over gains | (164) | (164)
Unrealised gains on revaluations | (271) | (251)
Depreciated non-qualifying assets | (3) | (4)
Retirement benefit obligation (note 4.5) | (28) | (35)
Total deferred tax liabilities | (564) | (540)
Total | (544) | (488)

At 27 September 2025, the Group has netted off deferred tax assets of £18m (2024 £49m) with deferred tax liabilities where there is a legally enforceable
right to settle on a net basis. Deferred tax assets and liabilities have been offset and disclosed in the Group balance sheet as follows:

| 2025 | 2024
| £m | £m
Deferred tax assets (after offsetting) | 2 | 3
Deferred tax liabilities (after offsetting) | (546) | (491)
Net deferred tax liability | (544) | (488)

Other Information
Mitchells & Butlers plc Annual Report and Accounts 2025
141
2.4 Taxation continued
Unrecognised tax allowances
At the balance sheet date the Group had unrecognised tax allowances of £76m in respect of unclaimed capital allowances (2024 £81m) available for offset
against future profits.
A deferred tax asset has not been recognised on tax allowances with a value of £19m (2024 £20m) because it is not certain that future taxable profits will be
available in the company where these tax allowances arose against which the Group can utilise these benefits. These tax credits can be carried forward indefinitely.
Factors which may affect future tax charges
The Group is within the scope of the OECD Pillar Two (Global Minimum Tax) model rules. The legislation has been enacted in the UK and Germany, being the
jurisdictions in which the Group operates. The rules are effective for the Group from the accounting period commencing 29 September 2024. The Group has
assessed that no material top-up taxes will arise.
For the 52 week period ended 27 September 2025, the Group has applied the IAS 12 mandatory exception to recognising and disclosing information about
deferred tax assets and liabilities related to Pillar Two income taxes.
2.5 Earnings/(loss) per share
Basic earnings per share (EPS) has been calculated by dividing the profit for the period by the weighted average number of ordinary shares in issue during the
period, excluding own shares held by employee share trusts.
For diluted earnings per share, the weighted average number of ordinary shares is adjusted to assume conversion of all dilutive potential ordinary shares.
Adjusted earnings per ordinary share amounts are presented before separately disclosed items (see note 2.2) in order to allow an understanding of the
adjusted trading performance of the Group.
The profits used for the earnings per share calculations are as follows:

| 2025 | 2024
| 52 weeks | 52 weeks
| £m | £m
Profit for the period | 177 | 149
Separately disclosed items, net of tax | 7 | 8
Adjusted profit for the period a | 184 | 157

The number of shares used for the earnings per share calculations are as follows:

| 2025 | 2024
| 52 weeks | 52 weeks
| million | million
Basic weighted average number of ordinary shares | 595 | 595
Effect of dilutive potential ordinary shares: |  |
– Contingently issuable shares | 5 | 5
– Other share options | 1 | –
Diluted weighted average number of shares | 601 | 600

| 2025 | 2024
| 52 weeks | 52 weeks
| pence | pence
Basic earnings per share |  |
Basic earnings per share | 29.7p | 25.0p
Separately disclosed items net of tax per share | 1.2p | 1.4p
Adjusted basic earnings per share a | 30.9p | 26.4p
Diluted earnings per share |  |
Diluted earnings per share | 29.5p | 24.8 p
Adjusted diluted earnings per share a | 30.6p | 26.2 p

a. Adjusted profit and adjusted EPS are alternative performance measures (APMs) and are considered critical to aid understanding of the Group’s performance. These measures
are explained on pages 189 to 191 of this report.
At 27 September 2025, 2,949,881 (2024 1,486,595) other share options were outstanding that could potentially dilute basic EPS in the future but were not
included in the calculation of diluted EPS as they are anti-dilutive for the periods presented.
Section 2 – Results for the period continued
Notes to the consolidated financial
statements continued
Annual Report and Accounts 2025 Mitchells & Butlers plc142
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Financial Statements
Section 3 – Operating assets and liabilities
3.1 Property, plant and equipment
Accounting policies
Property, plant and equipment
The majority of the Group’s freehold and long leasehold licensed land and buildings, and the associated landlord’s fixtures, fittings and equipment
(i.e. fixed fittings) are revalued annually and are therefore held at fair value less depreciation. Tenant’s fixtures and fittings (i.e. loose fixtures) within
freehold and long leasehold properties, are held at cost less depreciation and impairment.
Short leasehold buildings (leases with an unexpired lease term of less than 50 years), unlicensed land and buildings and associated fixtures, fittings and
equipment are held at cost less depreciation and impairment.
Land and buildings include leasehold improvements on long and short leases. All land and buildings are disclosed as a single class of asset within the
property, plant and equipment table, as we do not consider the short leasehold and unlicensed buildings to be material for separate disclosure.
Non-current assets held for sale are held at their carrying value or their fair value less costs to sell where this is lower.
Depreciation
Depreciation is charged to the income statement on a straight-line basis to write off the cost less residual value over the estimated useful life of an asset and
commences when an asset is ready for its intended use. Expected useful lives and residual values are reviewed each period and adjusted if appropriate.
No adjustments have been made in the period.
Freehold land is not depreciated.
Freehold and long leasehold buildings are depreciated so that the difference between their carrying value and estimated residual value is written off over
50 years from the date of acquisition. The residual value of freehold and long leasehold buildings is reassessed each period and is estimated to be equal to
the fair value determined in the annual valuation and therefore no depreciation charge is recognised.
Short leasehold buildings, and associated fixtures and fittings, are depreciated over the shorter of the estimated useful life and the unexpired term
of the lease.
Fixtures, fittings and equipment have the following estimated useful lives:
Information technology equipment 3 to 7 years
Fixtures and fittings 3 to 20 years
At the point of transfer to non-current assets held for sale, depreciation ceases. Should an asset be subsequently reclassified to property, plant and
equipment, the depreciation charge is calculated to reflect the cumulative charge had the asset not been reclassified.
Disposals
Profits and losses on disposal of property, plant and equipment are calculated as the difference between the net sales proceeds and the carrying amount
of the asset at the date of disposal.
Revaluation
The revaluation, performed at 27 September 2025, is determined via annual third-party inspection of 20% of the sites with the aim that all sites are
individually valued approximately every five years. The valuation utilises estimates of fair maintainable trade (FMT) and valuation multiples. The
revaluation determined by the annual inspection was carried out in accordance with the RICS Valuation – Global Standards 2025 which incorporate the
International Valuation Standards and the RICS Valuation – Professional Standards UK (the ‘Red Book’) assuming each asset is sold as a fully operational
trading entity.
Properties are valued as fully operational entities, to include fixtures and fittings but excluding stock, tenant’s fixtures and fittings and personal goodwill.
The 80% of the freehold and long leasehold estate which is not subject to a third-party valuation in the period is instead revalued internally by management.
The Group’s external valuer provides advice to management in relation to their internal valuation. This valuation is performed using estimates of FMT,
together with the same valuation multiples as those applied by the external valuer. Sites impacted by expansionary capital investment in the preceding
twelve months are reviewed for impairment only, based on estimated annualised post investment FMT against the carrying value of the asset. Where the
value of land and buildings derived purely from a multiple applied to the FMT misrepresents the underlying asset value, a spot valuation is applied.
Surpluses which arise from the revaluation exercise are included within other comprehensive income (in the revaluation reserve) unless they are reversing
a revaluation deficit which has been recognised in the income statement previously; in which case an amount equal to a maximum of that recognised in the
income statement previously is recognised in the income statement. Where the revaluation exercise gives rise to a deficit, this is reflected directly within
the income statement, unless it is reversing a previous revaluation surplus against the same asset; in which case an amount equal to the maximum of the
revaluation surplus is recognised within other comprehensive income (in the revaluation reserve).
Other Information
Mitchells & Butlers plc Annual Report and Accounts 2025
143
3.1 Property, plant and equipment continued
Impairment
Short leaseholds, unlicensed properties and fixtures and fittings are reviewed on an outlet basis for impairment if events or changes in circumstances
indicate that the carrying amount may not be recoverable. Further details of the impairment policy are provided in the impairment note 3.3.
Accounting judgements
Revaluation of freehold and long leasehold properties
The revaluation methodology is determined, with advice from CBRE, independent chartered surveyors, and incorporates management judgement where
appropriate. The application of a valuation multiple to the FMT of each site is considered the most appropriate method for the Group to determine the fair
value of freehold and long leasehold licensed land and buildings.
In the current and prior period, judgement has been applied to establish the basis of FMT that a willing third-party buyer would assume. The estimation of
FMT is derived from the individual profit and loss accounts of pubs and restaurants and is inclusive of the centrally recorded trading margins earned by the
Group but exclusive of certain head office costs. This represents the Group’s best view of the value that would be attributed by other reasonably efficient
operators. In both the current and prior periods FMT is estimated with reference to the reported site performance, with averages of the last two years
performance taken in the current period.
Where sites have been impacted by expansionary capital investment in the preceding twelve months, the FMT has been determined by estimating
annualised post-investment operating profit with reference to post-investment forecasts. See sensitivity analysis on page 146 regarding sites with
investment in the current period.
For the purposes of the valuation, and in order to group together properties of a similar nature, groupings by brand are applied for which standard
multiples have been established through third-party inspections of 20% of the freehold and long leasehold licensed property estate. Judgements are
applied in assessing multiples on the basis of market evidence of transaction prices and nature of the overall offer within the local market, with specific
consideration given to geographical location, ancillary revenue such as accommodation sales from bedrooms and lease terms for long leasehold sites.
Further judgement is required when a spot valuation is applied where the property value derived purely from a multiple applied to the FMT misrepresents
the underlying asset value with consideration given to the level of trade and location characteristics.
Significant accounting estimates
Revaluation of freehold and long leasehold properties
The application of the valuation methodology requires two significant estimates; the estimation of valuation multiples, which are determined via
third-party inspections; and an estimate of FMT.
In the prior period, inflation and costs stabilised, such that the Group’s external valuer considered that the level of reported site profitability was
representative of the FMT that a third-party, reasonably efficient operator would include in arriving at a transaction price. In the current period, trading
conditions have remained stable, and the Group’s external valuer has determined FMT as the average of the current and prior period reported site
profitability for all sites other than those impacted by investment in either period, or sites that have been spot valued.
The estimation of valuation multiples is derived from the valuer’s knowledge of market evidence of transaction prices for similar properties. In the current
period the multiples adopted are mostly in line with the prior period.
There is considered to be a significant risk that an adjustment to either of these assumptions could lead to a material change in the property valuation
within the next year.
A sensitivity analysis of changes in valuation multiples and FMT, in relation to the properties to which these estimates apply, is provided on page 146.
Notes to the consolidated financial
statements continued
Section 3 – Operating assets and liabilities continued
Annual Report and Accounts 2025 Mitchells & Butlers plc144
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Financial Statements
Property, plant and equipment
Property, plant and equipment can be analysed as follows:

| Land and | Fixtures, fittings |
| buildings | and equipment | Total
| £m | £m | £m
Cost or valuation |  |  |
At 30 September 2023 | 3,699 | 942 | 4,641
Acquired through business combinations (note 5.1) | 7 | – | 7
Additions | 32 | 131 | 163
Disposals a | (2) | (108) | (110)
Net increase from property revaluation | 258 | – | 258
Net impairment of short leasehold properties | 3 | (3) | –
Exchange differences | (1) | (1) | (2)
At 28 September 2024 | 3,996 | 961 | 4,957
Additions | 34 | 143 | 177
Disposals a | (10) | (101) | (111)
Net increase from property revaluation | 99 | – | 99
Net impairment of short leasehold properties | (2) | (3) | (5)
Exchange differences | – | 1 | 1
At 27 September 2025 | 4,117 | 1,001 | 5,118
Accumulated depreciation |  |  |
At 30 September 2023 | 80 | 475 | 555
Provided during the period | 4 | 88 | 92
Disposals a | (2) | (106) | (108)
Exchange differences | – | (1) | (1)
At 28 September 2024 | 82 | 456 | 538
Provided during the period | 4 | 92 | 96
Disposals a | (8) | (99) | (107)
At 27 September 2025 | 78 | 449 | 527
Net book value |  |  |
At 27 September 2025 | 4,039 | 552 | 4,591
At 28 September 2024 | 3,914 | 505 | 4,419
At 30 September 2023 | 3,619 | 467 | 4,086

a. Includes assets which are fully depreciated and have been removed from the fixed asset register.
Land and buildings include leasehold improvements on long and short leases with a net book value of £332m (2024 £314m).
Certain assets with a net book value of £46m (2024 £44m) owned by the Group are subject to a fixed charge in respect of liabilities held by the
Mitchells & Butlers Executive Top-Up Scheme (MABETUS).
Included within property, plant and equipment are assets with a net book value of £3,832m (2024 £3,697m), which are pledged as security for the
securitisation debt and over which there are certain restrictions on title. Further details of the securitisation are provided in note 4.1.
Cost at 27 September 2025 includes £19m (2024 £14m) of assets in the course of construction.
Revaluation of freehold and long leasehold properties
The fair value has been determined by estimations of FMT and brand valuation multiples. In the current period, FMT is largely reflective of the average of
current and prior period reported profits. Consideration has been given to location, quality of the pub restaurant and recent market transactions in the sector
in assessing property multiples. In the prior period FMT was largely reflective of reported profits.
Sensitivity analysis
Changes in the FMT, or the multiple could materially impact the valuation of the freehold and long leasehold properties, and as such they are both considered
to be significant estimates in the current period. The carrying value of properties to which these estimates apply is £4,407m (2024 £4,260m).
Other Information
Mitchells & Butlers plc Annual Report and Accounts 2025
145
3.1 Property, plant and equipment continued
FMT
In the current period, FMT has increased by 1% over the prior period’s FMT, excluding the sites with investment in the current period which are only assessed
for impairment. Given trading has now normalised following the disruption caused by the Covid pandemic in 2020, and there is a more stable inflationary
environment, a return to pre Covid FMT movements is considered to be within range of reasonably possible outcomes. Over the three years reported prior
to Covid the average movement in the FMT of the revalued estate was 1%. Assuming multiples remain stable, it is estimated that a 1% reduction in the FMT
would generate an approximate £36m reduction in the valuation. A 1% increase in the FMT is estimated to generate an approximate £38m increase in the
valuation. The sensitivity does not apply to sites with spot valuations as these valuations are independent of reported operating profits. Any change to the
spot valuations would not be material.
Multiples
Valuation multiples are determined at an individual brand level. Over the last three financial periods, the weighted average brand multiple has moved by an
average of 0.1, which is considered to be within the range of reasonably possible outcomes for future movements in multiples. It is estimated that a 0.1 reduction
in the multiple would generate an approximate £42m reduction in the valuation. A 0.1 increase to the multiple is estimated to generate an approximate £44m
increase in the valuation.
Sites with investment in the current period
205 properties were subject to investment over the last 12 months and, consistent with the Group’s policy have been valued at previous valuation plus the
associated investment capital expenditure as an approximation of current valuation. Trading results in the period immediately following an investment in a site
are less predictable and are therefore not taken into the assessment of fair maintainable trade until a year has passed. There is a reasonable possibility that the
valuation of the invested properties will move materially over the next 12 months as the post investment trading pattern becomes clearer. Over the last two
financial periods, the invested property portfolio has seen a valuation uplift in the year subsequent to the investment. If this pattern continues during FY 2026,
then the uplift recognised on FY 2025 invested properties could represent around 2.8% of the overall property estate valuation. This is completely dependent
on the individual performance of those sites and past experience also indicates that there is a risk of downward movements. The invested properties are
reviewed for impairment, based on estimated annualised post investment FMT against the carrying value of the asset as described in the revaluation policy.
Impairment review
Short leasehold and unlicensed properties (comprising land, buildings, fixtures, fittings and equipment) which are not revalued to fair market value, are
reviewed for impairment as described in the impairment note 3.3. A net impairment of £5m (2024 £nil) has been recognised against short leasehold and
unlicensed properties in the period.
Revaluation and impairment recognised
Current period valuations have been incorporated into the consolidated financial statements and the resulting revaluation adjustments have been taken to the
revaluation reserve or Group income statement as appropriate.
The impact of the revaluations/impairments described above is as follows:

| 2025 | 2024
| 52 weeks | 52 weeks
| £m | £m
Group income statement |  |
Revaluation deficit charged as an impairment | (63) | (120)
Reversal of past revaluation deficits | 74 | 124
Total impairment reversal arising from the revaluation | 11 | 4
Impairment of short leasehold and unlicensed properties (note 3.3) | (7) | (7)
Reversal of past impairments of short leasehold and unlicensed properties (note 3.3) | 2 | 7
Net impairment of short leaseholds and unlicensed properties | (5) | –
Total impairment reversal recognised in the income statement | 6 | 4
Group statement of other comprehensive income |  |
Unrealised revaluation surplus | 165 | 356
Reversal of past revaluation surplus | (77) | (102)
Total movement recognised in other comprehensive income | 88 | 254
Net increase in property, plant and equipment | 94 | 258

The valuation techniques are consistent with the principles in IFRS 13 and use significant unobservable inputs such that the fair value measurement of each
property within the portfolio has been classified as Level 3 in the fair value hierarchy.
Section 3 – Operating assets and liabilities continued
Notes to the consolidated financial
statements continued
Annual Report and Accounts 2025 Mitchells & Butlers plc146
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Financial Statements
The number of pubs included in the revaluation and the resulting valuation of these properties is reconciled to the total value of property, plant and
equipment below.

|  |  | Fixtures, |
|  | Land and | fittings and | Net book
|  |  |  | a
|  | buildings | equipment | value
| Number of pubs | £m | £m | £m
27 September 2025 |  |  |  |
Freehold properties | 1,338 | 3,688 | 433 | 4,121
Long leasehold properties | 90 | 253 | 33 | 286
Total revalued properties | 1,428 | 3,941 | 466 | 4,407
Short leasehold properties |  | 76 | 62 | 138
Unlicensed properties |  | 16 | 2 | 18
Other non-pub assets |  | 2 | 7 | 9
Assets under construction |  | 4 | 15 | 19
Total property, plant and equipment |  | 4,039 | 552 | 4,591

|  |  | Fixtures, |
|  | Land and | fittings and | Net book
| Number of | buildings | equipment | value a
| pubs | £m | £m | £m
28 September 2024 |  |  |  |
Freehold properties | 1,336 | 3,572 | 399 | 3,971
Long leasehold properties | 92 | 257 | 32 | 289
Total revalued properties | 1,428 | 3,829 | 431 | 4,260
Short leasehold properties |  | 65 | 57 | 122
Unlicensed properties |  | 15 | 2 | 17
Other non-pub assets |  | 1 | 5 | 6
Assets under construction |  | 4 | 10 | 14
Total property, plant and equipment |  | 3,914 | 505 | 4,419

a. The carrying value of freehold and long leasehold properties based on their historical cost is £2,654m and £186m respectively (2024 £2,581m and £180m).
The tables below show, for revalued properties, the number of pubs that have been valued within each fair maintainable trade and multiple banding:

|  |  |  | Valuation multiple applied to fair maintainable trade |  |
| Over 10 times | 9 to 10 times | 8 to 9 times | 7 to 8 times | Under 7 times | Total
27 September 2025 |  |  |  |  |  |
Number of pubs in each fair maintainable trade banding: |  |  |  |  |  |
< £200k p.a. | 115 | 56 | 129 | 141 | 26 | 467
£200k to £360k p.a. | 7 | 59 | 147 | 74 | 41 | 328
> £360k p.a. | 54 | 135 | 279 | 86 | 79 | 633
| 176 | 250 | 555 | 301 | 146 | 1,428

|  |  |  | Valuation multiple applied to fair maintainable trade |  |
| Over 10 times | 9 to 10 times | 8 to 9 times | 7 to 8 times | Under 7 times | Total
28 September 2024 |  |  |  |  |  |
Number of pubs in each fair maintainable trade banding: |  |  |  |  |  |
< £200k p.a. | 129 | 52 | 141 | 139 | 22 | 483
£200k to £360k p.a. | 12 | 87 | 163 | 76 | 29 | 367
> £360k p.a. | 53 | 126 | 265 | 78 | 56 | 578
| 194 | 265 | 569 | 293 | 107 | 1,428

Movements in valuation multiples between financial periods are the result of changes in property market conditions. The average weighted multiple is 8.5
(2024 8.7).
Capital commitments

| 2025 | 2024
| £m | £m
Contracts placed for expenditure on property, plant and equipment not provided for in the consolidated financial statements | 25 | 18

Other Information
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3.2 Leases
Leases – Group as lessee
Accounting policies
The Group assesses whether a contract is or contains a lease, at inception of the contract.
The Group recognises a right-of-use asset and a corresponding lease liability with respect to all lease arrangements in which it is the lessee, except for
short-term leases (defined as new leases with a lease term of twelve months or less), leases containing variable lease payment terms that are linked to the
revenue generated from leased pubs and leases of low value assets (such as tablets and personal computers, small items of office furniture and telephones).
For these leases, the Group recognises the lease payments as an operating expense on a straight-line basis over the term of the lease unless another
systematic basis is more representative of the time pattern in which economic benefits from the leased assets are consumed.
The lease liability is initially measured at the present value of the future lease payments unpaid at the lease commencement date, discounted by using
the rate implicit in the lease. If this rate cannot be readily determined, the lessee uses its incremental borrowing rate. Lease payments included in the
measurement of the lease liability comprise:
• Fixed lease payments (including in substance fixed payments), less any lease incentives receivable; and
• Lease payments that depend on an index or rate, initially measured using the index or rate at the commencement date.
The lease liability is subsequently measured by increasing the carrying amount to reflect interest on the lease liability (using the effective interest method)
and by reducing the carrying amount to reflect the lease payments made.
The Group remeasures the lease liability (and makes a corresponding adjustment to the related right-of-use asset) whenever:
• The lease term has changed or there is a significant event or change in circumstances resulting in a change in the assessment of exercise of a break
option, in which case the lease liability is remeasured by discounting the revised lease payments using a revised discount rate;
• The lease payments change due to changes in an index or rate or a change in expected payment under a guaranteed residual value, in which case the
lease liability is remeasured by discounting the revised lease payments using an unchanged discount rate (unless the lease payments change is due to
a change in a floating interest rate, in which case a revised discount rate is used);
• A lease contract is modified and the lease modification is not accounted for as a separate lease, in which case the lease liability is remeasured based on
the lease term of the modified lease by discounting the revised lease payments using a revised discount rate at the effective date of the modification.
The right-of-use assets comprise the initial measurement of the corresponding lease liability, adjusted for any advance payments made at or before lease
commencement, less any lease incentives received and any initial direct costs (including lease premiums).
Whenever the Group incurs an obligation to restore the underlying asset to the condition required by the terms and conditions of the lease, a dilapidations
provision is recognised and measured under IAS 37 Provisions, Contingent Liabilities and Contingent Assets. To the extent that the costs relate to a
right-of-use asset, the costs are included in the related right-of-use asset.
Right-of-use assets are depreciated over the remaining committed lease term on a straight-line basis. Right-of-use assets are tested annually for
impairment in accordance with IAS 36 Impairment of Assets.
Right-of-use assets are subsequently remeasured for any changes in lease term and future committed rental payments.
For short-term leases (lease term of twelve months or less), and leases of low-value assets (such as personal computers and office furniture), the Group
recognises a lease expense on a straight-line basis, directly in the income statement, as permitted by IFRS 16.
Impairment of right-of-use assets
Right-of-use assets are tested for impairment in accordance with IAS 36 Impairment of Assets, as described in the policy in the impairment note 3.3.
Section 3 – Operating assets and liabilities continued
Notes to the consolidated financial
statements continued
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Financial Statements
Right-of-use assets
Right-of-use assets can be analysed as follows:

| Land and |  |
| buildings | Cars | Total
| £m | £m | £m
Cost |  |  |
At 30 September 2023 | 592 | 10 | 602
Acquired through business combinations (note 5.1) | 7 | – | 7
Additions a | 26 | 4 | 30
Disposals | (15) | (2) | (17)
Foreign currency movements | (2) | – | (2)
At 28 September 2024 | 608 | 12 | 620
Additions a | 25 | 4 | 29
Disposals | (16) | (1) | (17)
Foreign currency movements | 3 | – | 3
At 27 September 2025 | 620 | 15 | 635
Accumulated depreciation and impairment |  |  |
At 30 September 2023 | 271 | 4 | 275
Provided during the period | 32 | 2 | 34
Disposals | (10) | (2) | (12)
Impairment | 17 | – | 17
Foreign currency movements | (1) | – | (1)
At 28 September 2024 | 309 | 4 | 313
Provided during the period | 33 | 3 | 36
Disposals | (13) | (1) | (14)
Impairment | 8 | – | 8
Foreign currency movements | 1 | – | 1
At 27 September 2025 | 338 | 6 | 344
Net book value |  |  |
At 27 September 2025 | 282 | 9 | 291
At 28 September 2024 | 299 | 8 | 307
At 30 September 2023 | 321 | 6 | 327

a. Additions to right-of-use assets include new leases, increases in dilapidation provisions and lease extensions or rent reviews relating to existing leases.
Impairment review of right-of-use assets
Right-of-use assets are reviewed for impairment by comparing site recoverable amounts to their carrying values. Impairment is considered at a cash-generating
unit level. A net impairment of £8m (2024 £17m) has been recognised against right-of-use assets in the period. Details of the impairment review at a
cash-generating unit level are disclosed in note 3.3.
Other Information
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3.2 Leases continued
Lease liabilities
A maturity analysis of the undiscounted future lease payments used to calculate the lease liabilities is shown below.

| 2025 | 2024
| £m | £m
Amounts payable under lease liabilities |  |
Due within one year | 58 | 50
Due between one and two years | 50 | 50
Due between two and three years | 54 | 46
Due between three and four years | 42 | 49
Due between four and five years | 33 | 40
Due between five and ten years | 165 | 166
Due between ten and fifteen years | 79 | 103
Due between fifteen and twenty years | 59 | 56
Due between twenty and twenty five years | 16 | 16
Due between twenty five and thirty years | 11 | 11
Due after thirty years | 78 | 78
Total undiscounted lease liabilities | 645 | 665
Less: impact of discounting | (211) | (218)
Present value of lease liabilities | 434 | 447
Analysed as: |  |
Current lease liabilities – principal amounts due within twelve months | 42 | 33
Non-current lease liabilities – principal amounts due after twelve months | 392 | 414
| 434 | 447

Some of the property leases in which the Group is lessee contain variable lease payment terms that are linked to the revenue generated from the leased pubs.
Variable payment terms are used in contracts to link rental payments to pub cash flows and reduce fixed costs. The total value of variable lease payments
charged to the income statement in the current period is £2m (2024 £3m).
Leases – Group as lessor
Accounting policy
The Group enters into lease agreements as a lessor with respect to some of its properties. The properties are operated as either licensed or unlicensed
businesses by the tenants.
Leases for which the Group is a lessor are classified as finance or operating leases. Whenever the terms of the lease transfer substantially all the risks and
rewards of ownership to the lessee, the contract is classified as a finance lease. All other leases are classified as operating leases. When the Group is an
intermediate lessor, it accounts for the head lease and the sub-lease as two separate contracts. The sub-lease is classified as a finance or operating lease
by reference to the right-of-use asset arising from the head lease.
Rental income from operating leases is recognised on a straight-line basis over the term of the relevant lease. Initial direct costs incurred in negotiating and
arranging an operating lease are added to the carrying amount of the leased asset and recognised on a straight-line basis over the lease term.
Amounts due from lessees under finance leases are recognised as receivables at the amount of the Group’s net investment in the leases. Finance lease income
is allocated to accounting periods so as to reflect a constant periodic rate of return on the Group’s net investment outstanding in respect of the leases.
Section 3 – Operating assets and liabilities continued
Notes to the consolidated financial
statements continued
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Financial Statements
Group as lessor – Finance lease receivables
A maturity analysis of the undiscounted future lease payments receivable used to calculate the finance lease receivable is shown below.

| 2025 | 2024
| £m | £m
Amounts receivable under finance leases |  |
Due within one year | 2 | 1
Due between one and two years | 1 | 1
Due between two and three years | 1 | 1
Due between three and four years | 1 | 1
Due between four and five years | 1 | 1
Due after five years | 7 | 9
Total undiscounted lease payments receivable | 13 | 14
Less: unearned finance income | (2) | (2)
Present value of lease payments receivable | 11 | 12
Net investment in the leases is analysed as: |  |
Current finance lease receivables – amounts due within twelve months | 1 | 1
Non-current finance lease receivables – amounts due after twelve months | 10 | 11
| 11 | 12

The Directors of the Group estimate the loss allowance on finance lease receivables at the end of the reporting period at an amount equal to lifetime expected
credit loss (ECL). Overdue amounts on finance lease receivables at the end of the reporting period are £1m (2024 £1m) and are fully provided. The Directors
of the Group have recognised a finance lease receivable impairment of £nil in the current period (2024 £nil).
There has been no change in the estimation techniques or significant assumptions made during the current reporting period in assessing the impairment for
finance lease receivables.
Group as lessor – Operating leases
The Group leases a small proportion of its licensed and unlicensed properties to tenants. The majority of lease agreements have terms of 50 years or less and
are classified as operating leases. Where sublet arrangements are in place, future minimum lease payments and receipts are presented gross.
Total future minimum lease rental receipts under non-cancellable operating leases are as follows:

| 2025 | 2024
| £m | £m
Due within one year | 7 | 7
Due between one and two years | 5 | 6
Due between two and three years | 5 | 5
Due between three and four years | 4 | 4
Due between four and five years | 4 | 4
Due after five years | 17 | 18
| 42 | 44

The total value of future minimum sub-lease rental receipts included above is £2m (2024 £2m).
Other Information
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151
3.3 Impairment
Accounting policies
Impairment – Property, plant and equipment, right-of-use assets, computer software and goodwill
As described in the property, plant and equipment policy (note 3.1), the lease accounting policy (note 3.2) and the goodwill policy (note 3.6), impairment
reviews are considered at a cash-generating unit level, with this being an individual outlet.
The carrying value of assets for an individual outlet, comprise the property, plant and equipment value, the associated right-of-use asset, computer
software and any attributable goodwill, that includes an allocation of central asset values. At each balance sheet date, the Group assesses whether there
is any indication that the carrying value of assets for individual outlets may be impaired. If any such impairment indicator exists then an impairment loss is
recognised in the income statement, whenever the carrying value of the outlet exceeds its recoverable amount, which is determined as the higher of the
value in use, or fair value less costs to sell for each outlet. Any resulting impairment relates to sites with poor trading performance, where the output of the
value in use calculations are insufficient to justify their current net book value. Changes in outlet earnings or cash flows, the discount rate applied to those
cash flows, or the estimate of fair value less costs of disposal could give rise to an additional impairment loss.
Where an impairment loss subsequently reverses, the carrying amount of the asset is increased to the revised estimate of its recoverable amount, but only
so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised
for the asset in prior periods. A reversal of an impairment loss is recognised in the income statement. An impairment reversal is only recognised where
there is a change in circumstances or favourable events since the last impairment test impacting estimates used to determine recoverable amounts, not
where it results from the passage of time.
Accounting judgements
Impairment review of cash-generating units – property, plant and equipment, right-of-use assets, computer software and goodwill
For the individual outlet level impairment review, judgement has been applied to determine the most appropriate site level profit and cash flow forecasts
based on the Group forecast for FY 2026 to FY 2028 that was in place at the balance sheet date.
Management apply judgement:
• when allocating overhead costs to site cash flows, with an overhead allocation being made only for those costs that can be directly attributable to a site
on a consistent basis; and
• in the allocation of corporate level assets to individual cash generating units, based on relative profitability.
Other sources of estimation uncertainty
Impairment review of cash-generating units – property, plant and equipment, right-of-use assets, computer software and goodwill
The impairment review requires two key sources of estimation uncertainty in calculating the value in use: the estimation of forecast cash flows for each
site and the selection of an appropriate discount rate. The discount rate is applied consistently to each cash-generating unit.
A sensitivity of changes in forecast cash flows and the discount rate is provided on page 153. The carrying value of assets to which these estimates apply
is £438m (2024 £442m).
Impairment review of cash-generating units, comprising property, plant and equipment, right-of-use assets, computer software
and goodwill
Recoverable amount is determined as the higher of the value in use, or fair value less costs to sell for each outlet.
Value in use calculations use forecast trading performance pre-tax cash flows, for years 1 to 3. These include steady increases to revenue and costs. In the
short to medium term, over the three year forecast period, no allowances have been made for any potential impact activity related to climate change, other
than continued maintenance and infrastructure spend on existing sustainability projects, as the impacts of this on future cash flows or capital expenditure
cannot yet be reasonably estimated or allocated to cash-generating units.
The forecast cash flows are discounted by applying a pre-tax discount rate of 11.3% (2024 11.0%) and a long-term growth rate of 2.0% from year 4 (2024
2.0%). The long-term growth rate is applied to the net cash flows and is based on up-to-date economic data points.
In addition to the short leasehold property and right-of-use asset impairment review performed at a cash-generating unit level, the Group’s freehold, long and
short leasehold cash generating units have been grouped together to ensure that the unallocated corporate level assets are also considered for impairment.
The assumptions are consistent with those described above for the value in use calculations performed at an individual outlet level, whilst also including
unallocated central overheads. As a result of this review, no additional impairment has been recognised in the current period.
Section 3 – Operating assets and liabilities continued
Notes to the consolidated financial
statements continued
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Financial Statements
In summary, the carrying value of the cash-generating units and impairment charges and reversals recognised against those cash-generating units is as follows:

|  |  | Impairment | Impairment | Net
|  | Carrying value | charges | reversals | impairment
|  | 2025 | 2025 | 2025 | 2025
| Note | £m | £m | £m | £m
Short leasehold properties | 3.1 | 138 | (7) | 2 | (5)
Right-of-use assets | 3.2 | 291 | (18) | 10 | (8)
Software | 3.6 | 16 | – | – | –
Goodwill | 3.6 | 6 | (1) | – | (1)
|  | 451 | (26) | 12 | (14)

|  |  | Impairment | Impairment | Net
|  | Carrying value | charges | reversals | impairment
|  | 2024 | 2024 | 2024 | 2024
| Note | £m | £m | £m | £m
Short leasehold properties | 3.1 | 122 | (7) | 7 | –
Right-of-use assets | 3.2 | 307 | (29) | 12 | (17)
Software | 3.6 | 6 | (1) | – | (1)
Goodwill | 3.6 | 7 | – | – | –
|  | 442 | (37) | 19 | (18)

Sensitivity analysis
Changes in forecast cash flows or the discount rate could impact the impairment charge recognised against the cash-generating units, and corporate level assets.
Forecast cash flows
The forecast pre-tax cash flows used in the value in use calculations are site level forecasts determined from the Group forecast for FY 2026 to FY 2028 that
was in place at the balance sheet date. For short leasehold sites and freehold/long leasehold sites with ROU or goodwill assets, should future cash flows
decline by 1%, this would result in an increase of £2m to the net impairment charge recognised.
Discount rate
The pre-tax discount rate applied to the forecast cash flows is derived from the Group’s post-tax weighted average cost of capital (WACC). The assumptions
used in the calculation of the Group’s WACC are benchmarked to externally available data. A single discount rate is applied to all cash-generating units. Over
recent periods, the discount rate used in impairment reviews has moved by c. 1.0%. For short leasehold sites and freehold/long leasehold sites with ROU or
goodwill assets, an increase of 1.0% in the discount rate would result in an increase of £4m to the net impairment charge recognised.
3.4 Working capital
Inventories
Accounting policy
Inventories are stated at the lower of cost and net realisable value. Cost is calculated using the weighted average method.
Inventories can be analysed as follows:

| 2025 | 2024
| £m | £m
Goods held for resale | 26 | 27

Trade and other receivables
Accounting policy
Trade receivables are initially recognised at transaction price and other receivables are initially recognised at fair value. Subsequently, these assets are
measured at amortised cost. This results in their recognition at nominal value less an allowance for any doubtful debts. The allowance for doubtful debts
is recognised based on management’s expectation of losses without regard to whether an impairment trigger happened or not (an ‘expected credit loss’
model). The Group always measures the loss allowance for trade receivables using the simplified model at an amount equal to lifetime ECL. Loss allowance
for other receivables is measured either at twelve months or lifetime ECL depending on whether the credit risk has increased significantly since initial
recognition (see financial assets impairment policy in note 4.3).
Other Information
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153
3.4 Working capital continued
Trade and other receivables can be analysed as follows:
Current

| 2025 | 2024
| £m | £m
Trade receivables | 15 | 13
Other receivables | 13 | 16
Prepayments | 23 | 27
Other financial assets a | 28 | 30
Defined benefit pension blocked accounts b | – | 12
Total trade and other receivables | 79 | 98

a. Other financial assets relate to cash collateral provided by a swap counterparty (see note 4.3).
b. Contributions to the MABEPP scheme were paid into a blocked account since the scheme buy-in that took place during the year ended 24 September 2022. The full amount has
been repaid to the Company in the current period. See note 4.5 for further details.
All trade, lease and other receivables are non-interest bearing. The Directors consider that the carrying amount of trade receivables and other receivables
approximately equates to their fair value. A provision for expected credit loss of £2m (2024 £2m) has been recognised against trade and other receivables.
Credit risk is considered in note 4.3.
Trade and other payables
Accounting policy
Trade and other payables are initially recognised at fair value and recognised subsequently at amortised cost.
Trade and other payables can be analysed as follows:
Current

| 2025 | 2024
| £m | £m
Trade payables | 111 | 114
Other taxation and social security | 81 | 99
Accrued charges | 183 | 186
Deferred income a | 39 | 34
Other payables | 20 | 19
Other – contingent consideration b | 11 | –
Other financial liabilities c | 28 | 30
Total trade and other payables | 473 | 482

Non-current

| 2025 | 2024
| £m | £m
Other contingent consideration b | – | 8

a. Mainly relates to deferred income on gift card sales not yet redeemed at the period end.
b. Relates to contingent consideration payable following the acquisition of Pesto Restaurants Limited. At 27 September 2025, the amount is due for payment within twelve months,
and has therefore been reclassified to current from non-current payables (see note 5.1).
c. Other financial liabilities relate to cash collateral provided by a swap counterparty (see note 4.3).
Current trade and other payables are non-interest bearing. The Directors consider that the carrying amount of trade and other payables approximately
equates to their fair value.
Section 3 – Operating assets and liabilities continued
Notes to the consolidated financial
statements continued
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Financial Statements
3.5 Provisions
Accounting policy
Provisions are recognised when the Group has a present legal or constructive obligation as a result of past events; it is more likely than not that an outflow
of resources will be required to settle the obligation; and the amount can be reliably estimated. Provisions are measured using the Directors’ best estimate
of the expenditure required to settle the obligation at the balance sheet date and are discounted to present value where the effect is material.
Onerous property provisions represent the expected unavoidable losses on onerous and vacant property leases and comprise the net lease commitment
(fixed service charges) not expected to be covered by operating revenue after all other operating costs. The provision is calculated on a site by site basis
with a provision being made for the remaining committed lease term, where a lease is considered to be onerous. Other contractual dilapidations costs are
also recorded as provisions as appropriate.
Provisions
The provision for unavoidable losses on onerous property leases has been set up to cover fixed service charge payments of vacant or loss-making properties.
The provision for dilapidation costs has been set up to cover the estimated future dilapidation claims from landlords on leasehold properties.
Provisions can be analysed as follows:

| Onerous property | Dilapidation | Total property
| provisions | provisions | provisions
| £m | £m | £m
At 30 September 2023 | 2 | 7 | 9
Provided in the period | 2 | 4 | 6
Utilised in the period | (2) | – | (2)
Released in the period | – | (1) | (1)
At 28 September 2024 | 2 | 10 | 12
Provided in the period | 1 | 4 | 5
Utilised in the period | (1) | (2) | (3)
Released in the period | – | (1) | (1)
At 27 September 2025 | 2 | 11 | 13

Other Information
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155
3.6 Goodwill and other intangible assets
Accounting policies
Business combinations and goodwill
Acquisitions of subsidiaries and businesses are accounted for using the acquisition method. The consideration for each acquisition is measured at the
aggregate of the fair values of assets given and liabilities incurred or assumed by the Group in exchange for control of the acquiree. Acquisition-related
costs are recognised in the income statement as incurred.
At the acquisition date, the identifiable assets acquired and the liabilities assumed are recognised at their fair value, except that:
• deferred tax assets or liabilities and liabilities or assets related to employee benefit arrangements are recognised and measured in accordance with IAS
12 Income Taxes and IAS 19 Employee Benefits (revised) respectively; and
• assets (or disposal groups) that are classified as held for sale in accordance with IFRS 5 Non-Current Assets Held for Sale and Discontinued Operations
are measured in accordance with that standard.
Intangible assets acquired in a business combination and recognised separately from goodwill are initially recognised at their fair value at the acquisition date.
Goodwill is measured as the excess of the sum of the consideration transferred, the amount of any non-controlling interests in the acquiree, and the fair value
of the acquirer’s previously held equity interest in the acquiree over the net of the identifiable assets acquired and the liabilities assumed at the acquisition
date. If, after reassessment, the net of the identifiable assets acquired and liabilities assumed at the acquisition date exceeds the sum of the consideration
transferred, the amount of any non-controlling interests in the acquiree and the fair value of the acquirer’s previously held interest in the acquiree, the
excess is recognised immediately in the income statement as a bargain purchase.
When the consideration transferred by the Group in a business combination includes assets or liabilities resulting from a contingent consideration
arrangement, the contingent consideration is measured at its acquisition date fair value and included as part of the contingent consideration transferred
in a business combination. Changes in fair value of the contingent consideration that qualify as measurement period adjustments are adjusted
retrospectively, with corresponding adjustments against goodwill. Measurement period adjustments are adjustments that arise from additional
information obtained during the ‘measurement period’ (which cannot exceed one year from the acquisition date) about facts and circumstances that
existed at the acquisition date.
The subsequent accounting for changes in the fair value of contingent consideration that do not qualify as measurement period adjustments depends on
how the contingent consideration is classified. Contingent consideration that is classified as equity is not re-measured at subsequent reporting dates and
its subsequent settlement is accounted for within equity. Contingent consideration that is classified as an asset or a liability is re-measured at subsequent
reporting dates, at fair value, with the corresponding gain or loss being recognised in the income statement.
When a business combination is achieved in stages, the Group’s previously-held interests in the acquired entity is re-measured to its acquisition date fair
value and the resulting gain or loss, if any, is recognised in the income statement. Amounts arising from interests in the acquiree prior to the acquisition
date that have previously been recognised in other comprehensive income are reclassified to profit or loss, where such treatment would be appropriate
if that interest were disposed of.
If the initial accounting for a business combination is incomplete by the end of the reporting period in which the combination occurs, the Group reports
provisional amounts for the items for which the accounting is incomplete. Those provisional amounts are adjusted during the measurement period, or
additional assets or liabilities are recognised, to reflect new information obtained about facts and circumstances that existed as of the acquisition date that,
if known, would have affected the amounts recognised as of that date.
Goodwill is not amortised, but is reviewed for impairment annually or more frequently if events or changes in circumstances indicate that the carrying
value may be impaired. For the purpose of impairment testing, goodwill is allocated to each of the Group’s cash-generating units expected to benefit from
the synergies of the combination. The impairment review requires management to consider the recoverable value of the business to which the goodwill
relates, based on either the fair value less costs to sell or the value in use. Value in use calculations require management to consider the net present value
of future cash flows generated by the business to which the goodwill relates. Fair value less costs to sell is based on management’s estimate of the net
proceeds which could be generated through disposing of that business. If the recoverable amount of the cash-generating unit is less than the carrying
amount of the unit, the impairment loss is allocated first to reduce the carrying amount of any goodwill allocated to the unit and then to the other assets of
the unit pro-rata on the basis of the carrying amount of each asset in the unit. An impairment loss is recognised immediately in the income statement and
is not subsequently reversed.
On disposal of a subsidiary, the attributable amount of goodwill is included in the determination of the profit or loss on disposal.
Computer software
Computer software and associated development costs, which are not an integral part of a related item of hardware, are capitalised as an intangible
asset and amortised on a straight-line basis over their useful life. The period of amortisation ranges between three and seven years with the majority
being three years.
Brands
Brand intangible assets recognised on acquisition are amortised on a straight-line basis over their estimated useful lives (20 years) within operating costs.
Brand intangibles are reviewed for impairment if events or changes in circumstances indicate that the carrying amount may not be recoverable.
Section 3 – Operating assets and liabilities continued
Notes to the consolidated financial
statements continued
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Financial Statements
Intangible assets
Intangible assets can be analysed as follows:

|  |  | Computer |
| Goodwill | Brands | software | Total
| £m | £m | £m | £m
Cost |  |  |  |
At 30 September 2023 | 8 | 5 | 18 | 31
Acquired through business combinations (note 5.1) | 5 | 2 | – | 7
Additions | – | – | 2 | 2
Disposals | – | – | (3) | (3)
At 28 September 2024 | 13 | 7 | 17 | 37
Additions | – | – | 12 | 12
Disposals | – | – | (3) | (3)
At 27 September 2025 | 13 | 7 | 26 | 46
Accumulated amortisation and impairment |  |  |  |
At 30 September 2023 | 6 | – | 8 | 14
Amortisation during the period | – | – | 4 | 4
Impairment | – | – | 1 | 1
Disposals | – | – | (2) | (2)
At 28 September 2024 | 6 | – | 11 | 17
Amortisation during the period | – | 1 | 2 | 3
Impairment | 1 | – | – | 1
Disposals | – | – | (3) | (3)
At 27 September 2025 | 7 | 1 | 10 | 18
Net book value |  |  |  |
At 27 September 2025 | 6 | 6 | 16 | 28
At 28 September 2024 | 7 | 7 | 6 | 20
At 30 September 2023 | 2 | 5 | 10 | 17

Goodwill and brands
With the exception of goodwill, there are no intangible assets with indefinite useful lives. All amortisation charges have been expensed through operating costs.
Brand intangibles have been recognised as part of business combinations (see note 5.1). Brand intangibles are amortised over their estimated useful lives and
have an average remaining useful life of 20 years.
Impairment review
All goodwill was recognised as part of business combinations. Goodwill has been allocated to cash-generating units, being individual outlets, to test for
impairment. An impairment charge of £1m (2024 £nil) has been recognised in the current period.
Computer software has been allocated to cash-generating units, being individual outlets, to test for impairment. An impairment charge of £nil (2024 £1m)
has been recognised in the current period.
Further details of the impairment review are provided in note 3.3.
There have been no significant changes in events or circumstances in the period that would indicate the brand value may be impaired.
Other Information
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Notes to the consolidated financial
statements continued
Section 4 – Capital structure and financing costs
4.1 Borrowings
Accounting policy
Borrowings, which include the Group’s secured loan notes, are stated initially at fair value (normally the amount of the proceeds) net of issue costs.
Thereafter they are stated at amortised cost using an effective interest basis. Finance costs, which are the difference between the net proceeds and the
total amount of payments to be made in respect of the instruments, are allocated over the term of the debt using the effective interest method. Borrowing
costs are not attributed to the acquisition or construction of assets and therefore no costs are capitalised within property, plant and equipment.
Borrowings can be analysed as follows:

| 2025 | 2024
| £m | £m
Current |  |
Securitised debt a,b | 137 | 130
Unsecured revolving credit facilities c | – | (1)
Overdrafts d | 35 | 12
Other borrowings e | 2 | 2
Total current | 174 | 143
Non-current |  |
Securitised debt a,b | 900 | 1,041
Total borrowings | 1,074 | 1,184

a. Further details of the assets pledged as security against the securitised debt are given on page 145.
b. Stated net of deferred issue costs.
c. At 27 September 2025 the amount of £nil (2024 £1m) represents unamortised issue costs.
d. The overdraft is within a cash pooling arrangement. In the cash flow statement, cash and cash equivalents are presented net of this overdraft (see note 4.4).
e. Short-term financing of employee advances.

| 2025 | 2024
| £m | £m
Analysis by year of repayment |  |
Due within one year or on demand | 174 | 143
Due between one and two years | 160 | 157
Due between two and five years | 463 | 458
Due after five years | 277 | 426
Total borrowings | 1,074 | 1,184

Securitised debt
On 13 November 2003, the Group refinanced its debt by raising £1,900m through a securitisation of the majority of its UK pubs and restaurants owned by
Mitchells & Butlers Retail Limited. On 15 September 2006 the Group completed a further debt (‘tap’) issue to borrow an additional £655m and refinance
£450m of existing debt at lower cost.
The loan notes consist of ten tranches as follows:

| Initial |  | Principal | Effective |  | Principal outstanding |
| principal |  | repayment | interest | 27 September | 28 September |
| borrowed |  | period (all by | rate | 2025 | 2024 | Expected
Tranche | £m | Interest | instalments) | % |  | £m | WAL a
|  |  |  |  | £m |  |
A1N | 200 | Floating | 2011 to 2028 | 6.61 b | 48 | 62 | 2 years
A2 | 550 | Fixed – 5.57% | 2003 to 2028 | 5.72 | 87 | 112 | 2 years
A3N | 250 | Floating | 2011 to 2028 | 6.69 b | 60 c | 77 c | 2 years
A4 | 170 | Floating | 2016 to 2028 | 6.37 b | 59 | 75 | 2 years
AB | 325 | Floating | 2020 to 2032 | 6.28 b | 244 | 260 | 5 years
B1 d | 350 | Fixed – 5.97% | 2003 to 2023 | 6.12 | – | – | 0 years
B2 | 350 | Fixed – 6.01% | 2015 to 2028 | 6.12 | 163 | 205 | 2 years
C1 | 200 | Fixed – 6.47% | 2029 to 2030 | 6.56 | 200 | 200 | 4 years
C2 | 50 | Floating | 2033 to 2034 | 6.47 b | 50 | 50 | 8 years
D1 | 110 | Floating | 2034 to 2036 | 6.68 b | 110 | 110 | 10 years
| 2,555 |  |  |  | 1,021 | 1,151 |

a. Expected weighted average life (WAL) assumes no early redemption in respect of any loan notes.
b. After the effect of interest rate swaps.
c. A3N notes are US$ notes which are shown as translated to sterling at the hedged swap rate. Values at the period end spot rate are £75m (2024 £96m). Therefore the exchange
difference on the A3N notes is £15m (2024 £19m).
d. The B1 loan notes were fully repaid during the prior period in accordance with the documented repayment schedule.
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Financial Statements
Principal outstanding above is reconciled to the principal outstanding and carrying value of securitised debt as disclosed on page 159 as follows.

| 2025 | 2024
| £m | £m
Principal outstanding | 1,021 | 1,151
A3N US$ notes exchange difference | 15 | 19
Principal outstanding at spot rate | 1,036 | 1,170
Deferred issue costs | (1) | (1)
Accrued interest | 2 | 2
Carrying value at end of period | 1,037 | 1,171

The notes are secured on the majority of the Group’s property and future income streams therefrom. All of the floating rate notes are hedged using interest
rate swaps which fix the interest rate payable.
Interest and margin is payable on the floating rate notes as follows:

Tranche | Interest | Margin
A1N | 3 month SONIA | 0.57%
A3N | 3 month SOFR | 0.71%
A4 | 3 month SONIA | 0.69%
AB | 3 month SONIA | 0.72%
C2 | 3 month SONIA | 1.99%
D1 | 3 month SONIA | 2.24%

The overall cash interest rate payable on the loan notes is 6.3% (2024 6.3%) after taking account of interest rate hedging and the cost of the financial guarantee
provided by Ambac Assurance UK Limited (Ambac). Ambac acts as a guarantor of the Group’s obligations to repay interest and principal on the loan notes.
In the event that the Group is unable to pay such amounts the guarantee is limited to the Class A1N, A3N, A4 and Class AB note holders only.
The securitisation is governed by various covenants, warranties and events of default, many of which apply to Mitchells & Butlers Retail Limited, the Group’s
main operating subsidiary. There are two main financial covenants, being the level of net assets and free cash flow (FCF) to debt service. FCF to debt service
represents the multiple of cash generated by sites within the structure to the cost of debt service. This is tested quarterly on both a trailing two quarter and
a four quarter basis. There are additional covenants regarding the maintenance and disposal of securitised properties and restrictions on its ability to move
cash, by way of dividends for example, to other Group companies. Further details of the covenants are provided in the going concern review on page 133.
At 27 September 2025, Mitchells & Butlers Retail Limited had cash and cash equivalents of £77m (2024 £91m). Of this amount £1m (2024 £2m), representing
disposal proceeds, was held on deposit in an account over which there are a number of restrictions. The use of this cash requires the approval of the securitisation
trustee and may only be used for certain specified purposes such as capital enhancement expenditure and business acquisitions.
The carrying value of the securitised debt in the Group balance sheet is analysed as follows:

| 2025 | 2024
| £m | £m
Principal outstanding at beginning of period | 1,170 | 1,308
Principal repaid during the period | (134) | (128)
Net principal receipts on cross currency swap | 4 | 5
Exchange on translation of dollar loan notes | (4) | (15)
Principal outstanding at end of period | 1,036 | 1,170
Deferred issue costs | (1) | (1)
Accrued interest | 2 | 2
Carrying value at end of period | 1,037 | 1,171

Liquidity facility
Under the terms of the securitisation, the Group holds a liquidity facility of £295m provided by two counterparties.
The amount drawn at 27 September 2025 is £nil (2024 £nil).
Unsecured revolving credit facilities
In the prior period, the Group held a single unsecured committed revolving credit facility of £200m. During the period, the unsecured committed revolving
credit facility of £200m was cancelled and replaced by a new unsecured committed revolving credit facility of £150m which expires on 22 July 2028.
The amount drawn at 27 September 2025 is £nil (2024 £nil).
There are covenants on the unsecured revolving credit facility relating to the ratio of EBITDAR to rent plus interest and net debt to EBITDA based on the
performance of the unsecured estate. Further details of the covenants are provided in the going concern review on pages 133.
Other Information
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4.2 Finance costs and income

| 2025 | 2024
| 52 weeks | 52 weeks
| £m | £m
Finance costs |  |
Interest on securitised debt | (72) | (79)
Interest on other borrowings | (11) | (13)
Interest on lease liabilities | (17) | (17)
Total finance costs | (100) | (109)
Finance income |  |
Interest receivable – cash | 9 | 10
Net pensions finance income/(charge) (note 4.5) | 7 | (2)

4.3 Financial instruments
Accounting policies
Financial assets and financial liabilities are recognised in the Group’s balance sheet when the Group becomes a party to the contractual provisions of
the instrument.
Financial assets
All financial assets are recognised or derecognised on a trade date where the purchase or sale of a financial asset is under a contract whose terms require
delivery of the financial asset within the timeframe established by the market concerned. Financial assets are initially measured at fair value, plus transaction
costs, except for those financial assets classified as at fair value through profit or loss, which are initially measured at fair value.
Debt instruments that meet the following conditions are measured subsequently at amortised cost:
• the financial asset is held within a business model whose objective is to hold financial assets in order to collect contractual cash flows; and
• the contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal
amount outstanding.
By default, all other financial assets are measured subsequently at fair value through profit or loss (FVTPL).
The classification depends on the nature and purpose of the financial assets and is determined at the time of initial recognition.
Impairment of financial assets
The Group recognises a loss allowance for expected credit losses (ECLs) on financial assets, where applicable. The amount of expected credit losses
is updated at each reporting date to reflect changes in credit risk since initial recognition of the respective financial asset.
The Group adopts the simplified approach detailed in IFRS 9 for trade receivables and finance lease receivables and therefore recognises lifetime ECL on
these assets. The expected credit losses on these financial assets are estimated using a provision matrix based on the Group’s historical credit loss experience,
adjusted for factors that are specific to the debtors, general economic conditions and an assessment of both the current as well as the forecast direction
of conditions at the reporting date, including time value of money where appropriate.
For all other financial assets, the Group recognises lifetime ECL when there has been a significant increase in credit risk since initial recognition. However,
if the credit risk on the financial asset has not increased significantly since initial recognition, the Group measures the loss allowance for that financial
instrument at an amount equal to twelve-month ECL.
Lifetime ECL represents the expected credit losses that will result from all possible default events over the expected life of a financial instrument. In contrast,
twelve-month ECL represents the portion of lifetime ECL that is expected to result from default events on a financial instrument that are possible within
twelve months after the reporting date.
Definition of default
The Group considers financial assets to be in default when information developed internally or obtained from external sources indicates that a debtor
is unlikely to pay its creditors, including the Group, in full (without taking into account any collateral held by the Group).
Credit-impaired financial assets
At each reporting date, the Group assesses whether financial assets are credit-impaired. A financial asset is ‘credit-impaired’ when one or more events that
have a detrimental impact on the estimated future cash flows of the financial asset have occurred.
Notes to the consolidated financial
statements continued
Section 4 – Capital structure and financing costs continued
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Financial Statements
Accounting policies continued
Write-off policy
The Group writes off a financial asset when there is information indicating that the debtor is in severe financial difficulty and there is no realistic prospect of
recovery. Financial assets written off may still be subject to enforcement activities under the Group’s recovery procedures, taking into account legal advice
where appropriate. Any recoveries made are recognised in profit or loss.
Measurement and recognition of expected credit losses
The measurement of expected credit losses is a function of the probability of default, loss given default (i.e. the magnitude of the loss if there is a default)
and the exposure at default. The assessment of the probability of default and loss given default is based on historical data adjusted by forward-looking
information. As for the exposure at default, for financial assets, this is represented by the assets’ gross carrying amount at the reporting date.
For financial assets, the expected credit loss is estimated as the difference between all contractual cash flows that are due to the Group in accordance with
the contract and all the cash flows that the Group expects to receive, discounted at the original effective interest rate.
If the Group has measured the loss allowance for a financial asset at an amount equal to lifetime ECL in the previous reporting period, but determines at the
current reporting date that the conditions for lifetime ECL are no longer met, the Group measures the loss allowance at an amount equal to twelve-month
ECL at the current reporting date, except for assets for which the simplified approach was used.
The Group recognises an impairment gain or loss in profit or loss for all financial assets with a corresponding adjustment to their carrying amount through
a loss allowance account.
Derecognition of financial assets
The Group derecognises a financial asset only when the contractual rights to the cash flows from the asset expire, or when it transfers the financial asset
and substantially all the risks and rewards of ownership of the asset to another entity. If the Group does not retain substantially all the risks and rewards of
ownership but continues to control a transferred asset, the Group recognises its retained interest in the asset and an associated liability for amounts it may
have to pay. If the Group retains substantially all the risks and rewards of ownership of a transferred financial asset, the Group continues to recognise the
financial asset and also recognises a collateralised borrowing for the proceeds received.
On derecognition of a financial asset measured at amortised cost, the difference between the asset’s carrying amount and the sum of the consideration
received and receivable is recognised in profit or loss.
Financial liabilities
The Group has financial liabilities relating to borrowings, for which the accounting policy is provided in note 4.1. Other financial liabilities are initially
measured at fair value, net of transaction costs.
All financial liabilities are measured subsequently at amortised cost using the effective interest method or at fair value through profit or loss (FVTPL).
Derecognition of financial liabilities
The Group derecognises financial liabilities when, and only when, the Group’s obligations are discharged, cancelled or expired. The difference between
the carrying amount of the financial liability discharged and the consideration paid and payable is recognised in profit or loss.
Effective interest method
The effective interest method is a method of calculating the amortised cost of a debt instrument and of allocating finance charges over the relevant period.
The effective interest rate is the rate that exactly discounts estimated future cash flows (including all fees and points paid or received that form an integral
part of the effective interest rate, transaction costs and other premiums or discounts) over the expected life of the debt instrument, or where appropriate,
a shorter period, to the amortised cost of a financial liability. Finance charges are recognised on an effective interest basis for all debt instruments.
Derivative financial instruments
The Group enters into a variety of derivative financial instruments to manage its exposure to interest rate and foreign exchange rate risks, including
interest rate and currency swaps.
Derivative financial instruments are initially measured at fair value on the contract date and are remeasured to fair value at each reporting date. The resulting
gain or loss is recognised in profit or loss immediately unless the derivative is designated and effective as a hedging instrument, in which event the timing
of the recognition in profit or loss depends on the nature of the hedge relationship.
A derivative with a positive fair value is recognised as a financial asset whereas a derivative with a negative fair value is recognised as a financial liability.
Derivatives are not offset in the financial statements unless the Group has both the current legal right to offset and intention to settle on a net basis or
realise simultaneously. A derivative is presented as a non-current asset or a non-current liability if the remaining maturity of the instrument is more than
twelve months and it is not expected to be realised or settled within twelve months. Other derivatives are presented as current assets or current liabilities.
Other Information
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4.3 Financial instruments continued
Hedge accounting
The Group designates its derivative financial instruments, i.e. interest rate and currency swaps, as cash flow hedges.
At the inception of the hedge relationship, the Group documents the relationship between the hedging instrument and the hedged item, along with its risk
management objectives and its strategy for undertaking various hedge transactions. Furthermore, at the inception of the hedge and on an ongoing basis,
the Group documents whether the hedging instrument is highly effective in offsetting changes in cash flows of the hedged item attributable to the hedged
risk, which is when the hedging relationships meet all of the following hedge effectiveness requirements:
• there is an economic relationship between the hedged item and the hedging instrument;
• the effect of credit risk does not dominate the value changes that result from that economic relationship; and
• the hedge ratio of the hedging relationship is the same as that resulting from the quantity of the hedged item that the Group actually hedges and the
quantity of the hedging instrument that the Group actually uses to hedge that quantity of hedged item.
If a hedging relationship ceases to meet the hedge effectiveness requirement relating to the hedge ratio but the risk management objective for that
designated hedging relationship remains the same, the Group adjusts the hedge ratio of the hedging relationship (i.e. rebalances the hedge) so that it
meets the qualifying criteria again.
Cash flow hedges
The effective portion of changes in the fair value of derivatives that are designated and qualify as cash flow hedges is recognised in other comprehensive
income and accumulated under the heading of hedging reserve, limited to the cumulative change in fair value of the hedged item from inception of the hedge.
Amounts previously recognised in other comprehensive income and accumulated in equity are reclassified to profit or loss in the periods when the hedged
item affects profit or loss, in the same line as the recognised hedged item. This transfer does not affect other comprehensive income. Furthermore, if the
Group expects that some or all of the loss accumulated in the hedging reserve will not be recovered in the future, that amount is immediately reclassified to
profit or loss.
Hedge accounting is discontinued only when the hedging relationship ceases to meet the qualifying criteria (after rebalancing, if applicable). This includes
instances when the hedging instrument expires or is sold or terminated. The discontinuation is accounted for prospectively. Any gain or loss recognised in
other comprehensive income and accumulated in the hedging reserve at that time remains in equity and is reclassified to profit or loss when the forecast
transaction occurs. When a forecast transaction is no longer expected to occur, the gain or loss accumulated in the hedging reserve is reclassified
immediately to profit or loss.
Financial risk management
Financial risk is managed by the Group’s Treasury function. The Group’s Treasury function is governed by a Board Approved Treasury Policy Statement which
details the key objectives and policies for the Group’s treasury management. The Treasury Committee ensures that the Treasury Policy is adhered to, monitors its
operation and agrees appropriate strategies for recommendation to the Board. The Treasury Policy Statement is reviewed annually, with recommendations
for change made to the Board, as appropriate. The Group Treasury function is operated as a cost centre and is the only area of the business permitted to
transact treasury deals. It must also be consulted on other related matters such as the provision of guarantees or the financial implications of contract terms.
An explanation of the Group’s financial instrument risk management objectives and strategies is set out below.
The main financial risks which impact the Group result from funding and liquidity risk, credit risk, capital risk and market risk, principally as a result of changes
in interest and currency rates. Derivative financial instruments, principally interest rate and foreign currency swaps, are used to manage market risk.
Derivative financial instruments are not used for trading or speculative purposes.
Funding and liquidity risk
In order to ensure that the Group’s long-term funding strategy is aligned with its strategic objectives, the Treasury Committee regularly assesses the maturity
profile of the Group’s debt, alongside the prevailing financial projections. This enables it to ensure that funding levels are appropriate to support the Group’s plans.
The current funding arrangements of the Group consist of the securitised notes issued by Mitchells & Butlers Finance plc (and associated liquidity facility)
along with an unsecured committed revolving credit facility of £150m. The terms of the securitisation and the revolving credit facility contain various financial
covenants. Compliance with these covenants is monitored by Group Treasury. The Group also has uncommitted credit facilities of £5m, together with
short-term financing in respect of employee advances of £2m.
The Group prepares a rolling daily cash forecast covering a six week period and an annual cash forecast by period. These forecasts are reviewed on a timely
basis and are used to manage the investment and borrowing requirements of the Group. A combination of cash pooling and zero balancing agreements are in
place to ensure the optimum liquidity position is maintained. The Group maintains sufficient cash balances or committed facilities outside the securitisation to
ensure that it can meet its medium-term anticipated cash flow requirements.
Section 4 – Capital structure and financing costs continued
Notes to the consolidated financial
statements continued
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Financial Statements
The maturity table below details the contractual undiscounted cash flows (both principal and interest), based on the prevailing period end interest and
exchange rates, for the Group’s financial liabilities, after taking into account the effect of interest rate and currency swaps (which are settled gross) and
assumes no early redemption in respect of any loan notes. As such these amounts will not reconcile to amounts disclosed in the Group Balance Sheet for
securitised debt and lease liabilities due to the impact of interest accruing in future periods.

| Within | One to | Two to | Three to | Four to | More than |
| one year | two years | three years | four years | five years | five years | Total
| £m | £m | £m | £m | £m | £m | £m
27 September 2025 |  |  |  |  |  |  |
Securitised debt – loan notes | (199) | (198) | (198) | (192) | (169) | (326) | (1,282)
Derivative financial liabilities (settled net) | (4) | (4) | (3) | (2) | (2) | (6) | (21)
Derivative financial asset receipts | 24 | 24 | 25 | 6 | – | – | 79
Derivative financial asset payments | (20) | (20) | (20) | (5) | – | – | (65)
Fixed rate: Securitised debt | (199) | (198) | (196) | (193) | (171) | (332) | (1,289)
Lease liabilities (note 3.2) | (58) | (50) | (54) | (42) | (33) | (408) | (645)
Trade payables (note 3.4) | (111) | – | – | – | – | – | (111)
Other payables (note 3.4) | (20) | – | – | – | – | – | (20)
Accrued charges (note 3.4) | (183) | – | – | – | – | – | (183)
Other financial liabilities (note 3.4) | (28) | – | – | – | – | – | (28)
Other contingent consideration (note 3.4) | (11) | – | – | – | – | – | (11)
28 September 2024 |  |  |  |  |  |  |
Securitised debt – loan notes | (201) | (198) | (198) | (198) | (192) | (496) | (1,483)
Derivative financial liabilities (settled net) | (2) | (4) | (4) | (3) | (2) | (7) | (22)
Derivative financial asset receipts | 24 | 24 | 24 | 24 | 6 | – | 102
Derivative financial asset payments | (20) | (20) | (20) | (20) | (5) | – | (85)
Fixed rate: Securitised debt | (199) | (198) | (198) | (197) | (193) | (503) | (1,488)
Lease liabilities (note 3.2) | (50) | (50) | (46) | (49) | (40) | (430) | (665)
Trade payables (note 3.4) | (114) | – | – | – | – | – | (114)
Other payables (note 3.4) | (19) | (9) | – | – | – | – | (28)
Accrued charges (note 3.4) | (186) | – | – | – | – | – | (186)
Other financial liabilities (note 3.4) | (30) | – | – | – | – | – | (30)

Credit risk
The Group Treasury function enters into contracts with third parties in respect of the investment of surplus funds and derivative financial instruments for
risk management purposes. These activities expose the Group to credit risk against the counterparties. To mitigate this exposure, Group Treasury operates
policies that restrict the general investment of surplus funds and the entering into of derivative transactions to counterparties that have a minimum credit
rating of ‘A’ (long-term) and ‘A1’/‘P1’/‘F1’ (short-term). Where ratings subsequently drop below the policy minimum additional approval is sought from the
Board to retain the position, or action is taken to move to a higher rated counterparty. The minimum long-term rating of any Group counterparty during the
year was ‘A’. The amount that can be invested or transacted at various ratings levels is restricted under the policy. Counterparties to derivative financial
instruments may also be required to post collateral with the Group where their credit rating falls below a predetermined level. At the period end a collateral
amount of £28m (2024 £30m) is held by the Group and is recognised as an other financial asset and other financial liability in the balance sheet.
To minimise credit risk exposure against individual counterparties, investments and derivative transactions are entered into with a range of counterparties.
The maximum investment exposure with any counterparty during the year was £50m (2024 £49m). The Group held investments with ten counterparties
during the year (2024 ten). The Group Treasury function reviews credit ratings, as published by Moody’s, Standard & Poor’s and Fitch Ratings, current
exposure levels and the maximum permitted exposure at given credit ratings, for each counterparty on a daily basis. Any exceptions are required to be
formally reported to the Treasury Committee on a four-weekly basis.
Trade receivables and other receivables mainly represent amounts due from tenants of unlicensed properties, amounts due from Group suppliers and cash
collateral deposits held by third parties. Credit exposure relating to tenants is ordinarily considered to be low risk, with an expected lifetime credit loss calculated
at the period end to reflect the risk of irrecoverable amounts. To minimise credit risk new tenants are assessed using an external credit rating system before
they are approved for tenancy. Credit exposure is reduced for the amounts due from Group suppliers as the Group holds offsetting amounts in trade and
other payables that are due to some of these suppliers. Credit risk on cash collateral deposits held by third parties are considered to be low credit risk as they
are held with reputable banking institutions by third parties.
Other Information
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4.3 Financial instruments continued
The Group’s maximum credit exposure at the balance sheet date was:

|  | 12-month | Lifetime |
| FVTPL | ECL | ECL | Total
| £m | £m | £m | £m
27 September 2025: |  |  |  |
Cash and cash equivalents a | – | 181 | – | 181
Trade receivables b | – | – | 15 | 15
Other receivables b | – | 13 | – | 13
Other financial assets | – | 28 | – | 28
Finance lease receivables c | – | 1 | 10 | 11
Derivatives | 15 | – | – | 15
28 September 2024: |  |  |  |
Cash and cash equivalents a | – | 164 | – | 164
Trade receivables b | – | – | 13 | 13
Other receivables b | – | 16 | – | 16
Other financial assets | – | 30 | – | 30
Defined benefit pension blocked account | – | 12 | – | 12
Finance lease receivables c | – | 1 | 11 | 12
Derivatives | 19 | – | – | 19

a. Cash and cash equivalents as presented in the cash flow statement. This is presented net of an overdraft within a cash pooling arrangement, to which the Group has a legal right
of offset.
b. Trade receivables and other receivables are shown net of an expected credit loss allowance, as shown in note 3.4.
c. Finance lease receivables expected credit loss allowance is immaterial, as described in note 3.2.
Capital management
The Group’s capital base is comprised of its net debt (analysed in note 4.4) plus total equity (disclosed on the face of the Group balance sheet). The objective
is to maintain a capital base which is sufficiently strong to support the ongoing development of the business as a going concern, including the amenity, and cash
flow generation of the pub estate. By keeping debt and headroom against its debt facilities at an appropriate level, the Group ensures that it maintains a strong
credit position, whilst maximising value for shareholders and adhering to its covenants and other restrictions associated with its debt (see note 4.1). In managing
its capital structure, from time to time the Group may realise value from non-core assets, buy back or issue new shares, initiate and vary its dividend payments
and seek to vary or accelerate debt repayments. The Group’s policy is to ensure that the maturity of its debt profile supports its strategic objectives. The Board
considers the latest covenant compliance, headroom projections and projected balance sheet positions periodically throughout the period, based on the
advice of the Treasury Committee which meets on a four-weekly basis. The Treasury Committee is chaired by the Group Treasurer and monitors Treasury
performance and compliance with Board-approved policies. The Group Chief Financial Officer is also a member of the Committee.
Total capital at the balance sheet date is as follows:

| 2025 | 2024
| £m | £m
Net debt excluding leases (note 4.4) | 843 | 989
Total equity | 2,816 | 2,566
Total capital | 3,659 | 3,555

Market risk
The Group is exposed to the risk that the fair value of future cash flows of its financial instruments will fluctuate because of changes in market prices.
Market risk comprises foreign currency and interest rate risk.
Foreign currency risk
The most significant currency risk the Group faces is in relation to the class A3N floating rate notes. At issuance of these notes, the Group entered into a cross
currency interest rate swap to manage the foreign currency exposure resulting from both the US$ principal and initial interest elements of the notes. The A3N
notes have a carrying value of £75m (2024 £96m) and form part of the securitised debt (see note 4.1).
Sensitivity analysis
Further to the step-up on the A3N notes on 15 December 2010, the Group has additional foreign currency exposure as a result of the increase in US$ finance
costs. A movement of 10% in the US$ exchange rate would have £nil (2024 £nil) impact on the reported Group profit and £7m (2024 £16m) impact on the
reported Group equity.
The Group has no significant profit and loss exposure as a result of retranslating monetary assets and liabilities at different exchange rates. As the Group
is predominantly UK-based and acquires the majority of its supplies in sterling, it has no significant direct currency exposure from its operations.
Section 4 – Capital structure and financing costs continued
Notes to the consolidated financial
statements continued
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Financial Statements
Interest rate risk
The Group has a mixture of fixed and floating interest rate debt instruments and manages the variability in cash flows resulting from changes in interest rates
by using derivative financial instruments. Where the necessary criteria are met, the Group minimises the volatility in its consolidated financial statements
through the adoption of the hedge accounting provisions permitted under IFRS 9. The interest rate exposure resulting from the Group’s £1.0bn securitisation
is largely fixed, either as a result of the notes themselves being issued at fixed interest rates, or through a combination of floating rate notes against which
effective interest rate swaps are held, which are eligible for hedge accounting.
A number of the Group’s financial instruments were initially issued with LIBOR as their interest reference rate. The Group completed the necessary amendments
to transition its financing arrangements in advance of the discontinuation of LIBOR as a floating reference rate, and in prior periods replaced LIBOR with a
Sterling Overnight Index Average (SONIA) based rate in respect of sterling and a Secured Overnight Financing Rate (SOFR) based rate in respect of US
dollars. The sterling facilities transitioned to SONIA plus a credit adjustment spread of 11.93 basis points to maintain an economically equivalent position,
for periods commencing on or after 1 January 2022. The facilities previously referencing US dollar LIBOR transitioned to SOFR plus 26.161 basis points for
periods commencing on or after 1 July 2023.
As part of the transition, all of the Group’s hedge relationships were reviewed and these continue to be highly effective. Hedge documentation was updated
in accordance with the reliefs permitted in the amendments to IFRS 9, designating the new interest reference rate in both the hedged item and the hedging
instrument. As a result of the transition, there was no impact on the amounts recognised in the income statement or statement of other comprehensive income.
There has been no change to interest rate exposure in the current period. This is consistent with the Group Treasury policy on interest rate management.
Sensitivity analysis
The sensitivity analysis below has been calculated based on the Group’s exposure to interest rates for both derivative and non-derivative instruments as at
the balance sheet date. A 1% movement is used when reporting interest rate risk internally to key management personnel and represents management’s
assessment of this reasonably possible change in interest rates.
For floating rate liabilities, which are not hedged by derivative instruments, the analysis has been prepared assuming that the liability outstanding at the
balance sheet date was outstanding for the whole period. For interest income the analysis assumes that cash and cash equivalents and other cash deposits
that were held in interest bearing accounts at the balance sheet date were held for the whole period.
The Group’s sensitivity to a 1% increase in interest rates is detailed below:

| 2025 | 2024
| £m | £m
Interest income a | 1 | 1
Interest expense b | – | –
Profit impact | 1 | 1
Derivative financial instruments (fair values) c | 24 | 40
Total equity | 25 | 41

a. Represents interest income earned on cash and cash equivalents and other cash deposits (these are defined in note 4.1).
b. The element of interest expense which is not matched by payments and receipts under cash flow hedges which would otherwise offset the interest rate exposure of the Group.
c. The impact on total equity from movements in the fair value of cash flow hedges.
Derivative financial instruments
Cash flow hedges
Changes in cash flow hedge fair values are recognised in the hedging reserve in equity to the extent that the hedges are effective. The cash flow hedges
detailed below have been assessed as being highly effective during the period and are expected to remain highly effective over the remaining contract lives.
The following amounts have been recognised during the period:

| 2025 | 2024
| 52 weeks | 52 weeks
| £m | £m
Gains/(losses) arising during the period | 10 | (34)
Reclassification adjustments for items included in profit or loss within finance costs | 5 | 11
| 15 | (23)

Other Information
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4.3 Financial instruments continued
Cash flow hedges – securitised borrowings
The nominal and carrying values of cash flow hedges at the balance sheet date, together with the changes in fair value of cash flow hedges during the period,
are shown below.

|  | Carrying amount of |  | Changes in fair
| Nominal amount | hedging instrument |  | value used for
| of hedging |  |  | calculating hedge
| instrument | Assets | Liabilities | ineffectiveness
| £m | £m | £m | £m
2025 |  |  |  |
Interest rate risk |  |  |  |
– 10 interest rate swaps | 571 | – | (15) | 14
Foreign exchange risk |  |  |  |
– Cross currency swap | 60 | 15 | – | (4)
2024 |  |  |  |
Interest rate risk |  |  |  |
– 10 interest rate swaps | 633 | – | (29) | (22)
Foreign exchange risk |  |  |  |
– Cross currency swap | 77 | 19 | – | (16)

The cash flows on the interest rate swaps occur quarterly, receiving a floating rate of interest based on SONIA plus a credit adjustment spread of 11.93 basis
points, and paying a fixed rate of 4.77% (2024 4.78%). The contract maturity dates match those of the hedged item. No hedge ineffectiveness on the interest
rate swaps was recognised in profit or loss in the current or prior period.
The cash flows on the cross currency swap occur quarterly, receiving a floating rate of interest based on SOFR and paying a floating rate of interest at SONIA
plus a credit adjustment spread of 11.93 basis points in sterling. The ineffectiveness on the cross currency swaps due to foreign currency basis spread was
immaterial in both the current and prior period.
The cash flows arising from interest rate swap positions on the same counterparty may be settled as a net position. The cross currency interest rate swap is
held under a separate agreement and cash movements for this instrument are settled individually. In the event of default, the interest rate swaps and cross
currency swaps with counterparty B may be settled net, as shown below.
The position at 27 September 2025 is as follows:

|  |  |  | Positions that |
|  |  |  | could be net in |
|  | Positions netted | Balance sheet | balance sheet | Overall net
| Gross position | in balance sheet | position | but are not | exposure
| £m | £m | £m | £m | £m
Counterparty A – interest rate swaps | (6) | – | (6) | – | (6)
Counterparty B – interest rate swaps | (9) | – | (9) | 15 | 6
Net interest rate swaps | (15) | – | (15) | 15 | –
Counterparty B – cross currency swap liability | (61) | 61 | – | – | –
Counterparty B – cross currency swap asset | 76 | (61) | 15 | (15) | –
Net cross currency swap | 15 | – | 15 | (15) | –
Total | – | – | – | – | –

Section 4 – Capital structure and financing costs continued
Notes to the consolidated financial
statements continued
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Financial Statements
The position at 28 September 2024 was as follows:

|  |  |  | Positions that |
|  |  |  | could be net in |
|  | Positions netted | Balance sheet | balance sheet | Overall net
| Gross position | in balance sheet | position | but are not | exposure
| £m | £m | £m | £m | £m
Counterparty A – interest rate swaps | (13) | – | (13) | – | (13)
Counterparty B – interest rate swaps | (16) | – | (16) | 19 | 3
Net interest rate swaps | (29) | – | (29) | 19 | (10)
Counterparty B – cross currency swap liability | (78) | 78 | – | – | –
Counterparty B – cross currency swap asset | 97 | (78) | 19 | (19) | –
Net cross currency swap | 19 | – | 19 | (19) | –
Total | (10) |  | (10) | – | (10)

Fair values of derivative financial instruments
The fair values of the derivative financial instruments were measured at 27 September 2025 and may be subject to material movements in the period
subsequent to the balance sheet date. The fair values of the derivative financial instruments are reflected on the balance sheet as follows:

|  |  | Derivative financial instruments – fair value |  |
| Non-current | Current | Current | Non-current |
| assets | assets | liabilities | liabilities | Total
| £m | £m | £m | £m | £m
Derivatives at fair value designated in cash flow hedges: |  |  |  |  |
– Interest rate swaps | – | – | (4) | (11) | (15)
– Cross currency swap | 15 | – | – | – | 15
27 September 2025 | 15 | – | (4) | (11) | –
28 September 2024 | 19 | – | (2) | (27) | (10)

Reconciliation of movements in derivative values
The tables below detail changes in the Group’s derivatives, including both cash and non-cash changes where appropriate. Changes in the Group’s
borrowings are disclosed in the net debt reconciliation in note 4.4.
Movements in derivative values for the 52 weeks ended 27 September 2025 are represented by:

| At |  |  | At
| 28 September | Cash | Fair value | 27 September
| 2024 | movements | movements | 2025
| £m | £m | £m | £m
Cash flow hedges | (10) | – | 10 | –
Total derivatives | (10) | – | 10 | –

Movements in derivative values for the 52 weeks ended 28 September 2024 are represented by:

| At |  |  | At
| 30 September | Cash | Fair value | 28 September
| 2023 | movements | movements | 2024
| £m | £m | £m | £m
Cash flow hedges | 28 | (4) | (34) | (10)
Total derivatives | 28 | (4) | (34) | (10)

Other Information
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167
4.3 Financial instruments continued
Fair value of financial assets and liabilities
The fair value and carrying value of financial assets and liabilities by category is as follows:

| 2025 |  | 2024 |
| Carrying value | Fair value | Carrying value | Fair value
| £m | £m | £m | £m
Financial assets at amortised cost: |  |  |  |
– Cash and cash equivalents (note 4.4) | 216 | 216 | 176 | 176
– Trade receivables (note 3.4) | 15 | 15 | 13 | 13
– Other receivables (note 3.4) | 13 | 13 | 16 | 16
– Other financial assets (note 3.4) | 28 | 28 | 30 | 30
– Defined benefit pension blocked account (note 3.4) | – | – | 12 | 12
– Finance lease receivables (note 3.2) | 11 | 11 | 12 | 12
| 283 | 283 | 259 | 259
Financial assets – derivatives at FVTPL: |  |  |  |
– Derivative instruments in designated hedge accounting relationships (note 4.3) | 15 | 15 | 19 | 19
| 15 | 15 | 19 | 19
Financial liabilities at amortised cost: |  |  |  |
– Borrowings (note 4.1) | (1,074) | (1,038) | (1,184) | (1,084)
– Lease liabilities (note 3.2) | (434) | (434) | (447) | (447)
– Trade payables (note 3.4) | (111) | (111) | (114) | (114)
– Accrued charges (note 3.4) | (183) | (183) | (186) | (186)
– Other payables (note 3.4) | (20) | (20) | (27) | (27)
– Other – contingent consideration (note 3.4) | (11) | (11) | (8) | (8)
– Other financial liabilities (note 3.4) | (28) | (28) | (30) | (30)
| (1,861) | (1,825) | (1,996) | (1,896)
Financial liabilities – derivatives at FVTPL: |  |  |  |
– Derivative instruments in designated hedge accounting relationships (note 4.3) | (15) | (15) | (29) | (29)

Borrowings have been valued as Level 1 financial instruments, as the various tranches of the securitised debt have been valued using period end quoted offer
prices. As the securitised debt is traded on an active market, the market value represents the fair value of this debt. The fair value of interest rate and currency
swaps is the estimated amount which the Group could expect to pay or receive on termination of the agreements. Other financial assets and liabilities are
either short-term in nature or their book values approximate to fair values.
Fair value of derivative financial instruments
The fair value of the Group’s derivative financial instruments is calculated by discounting the expected future cash flows of each instrument at an appropriate
discount rate to a ‘mark to market’ position and then adjusting this to reflect any non-performance risk associated with the counterparties to the instrument.
IFRS 13 Financial Instruments requires the Group’s derivative financial instruments to be disclosed at fair value and categorised in three levels according to the
inputs used in the calculation of their fair value:
• Level 1 instruments use quoted prices as the input to fair value calculations;
• Level 2 instruments use inputs, other than quoted prices, that are observable either directly or indirectly;
• Level 3 instruments use inputs that are unobservable.
The table below sets out the valuation basis of derivative financial instruments held at fair value by the Group:

| Level 1 | Level 2 | Level 3 | Total
Fair value at 27 September 2025 | £m | £m | £m | £m
Financial assets: |  |  |  |
Currency swaps | – | 15 | – | 15
Financial liabilities: |  |  |  |
Interest rate swaps | – | (15) | – | (15)
| – | – | – | –

| Level 1 | Level 2 | Level 3 | Total
Fair value at 28 September 2024 | £m | £m | £m | £m
Financial assets: |  |  |  |
Currency swaps | – | 19 | – | 19
Financial liabilities: |  |  |  |
Interest rate swaps | – | (29) | – | (29)
| – | (10) | – | (10)

Section 4 – Capital structure and financing costs continued
Notes to the consolidated financial
statements continued
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Financial Statements
4.4 Net debt
Accounting policies
Cash and cash equivalents
Cash and cash equivalents comprise cash at bank and in hand and other short-term highly liquid deposits with an original maturity at acquisition of three months
or less. Cash held on deposit with an original maturity at acquisition of more than three months is disclosed as other cash deposits. In the cash flow statement,
cash and cash equivalents are shown net of bank overdrafts that are repayable on demand and form an integral part of the Group’s cash management.
Net debt
Net debt comprises cash and cash equivalents, cash deposits net of borrowings and discounted lease liabilities. Net debt is presented on a constant
currency basis, due to the inclusion of the fixed exchange rate component of the cross currency swap (as described in note 4.3). Cash flows on the interest
rate and cross currency swaps are shown within interest paid in the Group cash flow statement.
Net debt

|  | 2025 | 2024
| Note | £m | £m
Cash and cash equivalents |  | 216 | 176
Overdraft | 4.1 | (35) | (12)
Cash and cash equivalents as presented in the cash flow statement a |  | 181 | 164
Securitised debt | 4.1 | (1,037) | (1,171)
Unsecured revolving credit facility | 4.1 | – | 1
Derivatives hedging securitised debt b | 4.1 | 15 | 19
Short-term financing of employee advances c | 4.1 | (2) | (2)
Net debt excluding leases |  | (843) | (989)
Lease liabilities | 3.2 | (434) | (447)
Net debt including leases |  | (1,277) | (1,436)

a. Cash and cash equivalents, in the cash flow statement, are presented net of an overdraft within a cash pooling arrangement relating to various entities across the Group.
b. Represents the element of the fair value of currency swaps hedging the balance sheet value of the Group’s US$ denominated A3N loan notes. This amount is disclosed
separately to remove the impact of exchange movements which are included in the securitised debt amount. Derivatives hedging debt restates the US$ debt at $1.675:£1.
c. Advances to employees is a borrowing from Wagestream.
Movement in net debt excluding leases

| 2025 | 2024
| 52 weeks | 52 weeks
| £m | £m
Net increase in cash and cash equivalents | 16 | 62
Add back cash flows in respect of other components of net debt: |  |
Principal repayments on securitised debt | 134 | 128
Principal receipts on cross currency swap | (21) | (21)
Principal payments on cross currency swap | 17 | 16
Short term financing of employee advances | – | (2)
Decrease in net debt arising from cash flows | 146 | 183
Movement in capitalised debt issue costs net of accrued interest | (1) | (1)
Decrease in net debt excluding leases | 145 | 182
Opening net debt excluding leases | (989) | (1,170)
Foreign exchange movements on cash | 1 | (1)
Closing net debt excluding leases | (843) | (989)

Other Information
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169
4.4 Net debt continued
Movement in lease liabilities:

| 2025 | 2024
| 52 weeks | 52 weeks
| £m | £m
Opening lease liabilities | (447) | (463)
Acquired through business combinations (note 5.1) | – | (5)
Additions a | (26) | (28)
Interest charged during the period (note 4.2) | (17) | (17)
Repayment of principal | 39 | 41
Payment of interest | 14 | 17
Disposals | 5 | 7
Foreign currency movements | (2) | 1
Closing lease liabilities | (434) | (447)

a. Additions to lease liabilities include new leases and lease extensions or rent reviews relating to existing leases.
The movement in net debt including leases for the 52 weeks ended 27 September 2025 is represented by:

| At | Cash flow | Non-cash | Foreign | At
| 28 September | movements | movements | currency | 27 September
| 2024 | in the period | in the period | movements | 2025
| £m | £m | £m | £m | £m
Securitised debt a | (1,171) | 134 | – | – | (1,037)
Derivatives hedging securitised debt | 19 | (4) | – | – | 15
| (1,152) | 130 | – | – | (1,022)
Revolving credit facilities | 1 | 1 | (2) | – | –
Short-term financing | (2) | – | – | – | (2)
Lease liabilities b | (447) | 53 | (38) | (2) | (434)
Total liabilities arising from financing activities | (1,600) | 184 | (40) | (2) | (1,458)
Cash and cash equivalents | 164 | 16 | – | 1 | 181
Net debt including leases | (1,436) | 200 | (40) | (1) | (1,277)

a. Cash movements on securitised debt of £134m relate to principal repayments. In addition, £72m of securitised debt interest has been accrued and settled during the period.
b. Cash movements of £53m relate to £39m repayment of principal on lease liabilities and £14m of interest paid on lease liabilities.
The movement in net debt including leases for the 52 weeks ended 28 September 2024 is represented by:

| At | Cash flow | Non-cash | Foreign | At
| 30 September | movements | movements | currency | 28 September
| 2023 | in the period | in the period | movements | 2024
| £m | £m | £m | £m | £m
Securitised debt a | (1,309) | 128 | – | 10 | (1,171)
Derivatives hedging securitised debt | 34 | (5) | – | (10) | 19
| (1,275) | 123 | – | – | (1,152)
Revolving credit facilities | 2 | – | (1) | – | 1
Short-term financing | – | (2) | – | – | (2)
Lease liabilities b | (463) | 58 | (43) | 1 | (447)
Total liabilities arising from financing activities | (1,736) | 179 | (44) | 1 | (1,600)
Cash and cash equivalents | 103 | 62 | – | (1) | 164
Net debt including leases | (1,633) | 241 | (44) | – | (1,436)

a. Cash movements on securitised debt of £128m relate to principal repayments. In addition, £79m of securitised debt interest has been accrued and settled during the period.
b. Cash movements of £58m relate to £41m repayment of principal on lease liabilities and £17m of interest paid on lease liabilities.
Section 4 – Capital structure and financing costs continued
Notes to the consolidated financial
statements continued
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Introduction
Financial Statements
4.5 Pensions
Accounting policy
In the prior period the Trustees of the Mitchells & Butlers Executive Pension Plan (MABEPP) bought out the liabilities of the plan with Legal & General
Assurance Society Limited through converting the overall bulk annuity policy into individual policies in members own names. Subsequent to that, and in
the current period the scheme has been wound up.
As a result, retirement and death benefits for eligible employees in the United Kingdom are now provided principally by the Mitchells & Butlers Pension
Plan (MABPP). This plan is a funded, HMRC approved, occupational pension scheme with defined contribution and defined benefit sections. The defined
benefit section of the plan is now closed to future service accrual. The defined benefit liabilities relate to this funded plan, together with an unfunded
unapproved pension arrangement (the Executive Top-Up Scheme, or MABETUS). The assets of the MABPP plan are held in a self-administered trust fund
separate from the Company’s assets.
The MABPP plan operates under the UK regulatory framework and is governed by a Trustee Board composed of member-nominated and independent
Trustee Directors. The Trustee Directors make investment decisions and set the required contribution rates based on independent actuarial advice and
consultation with the Company.
In addition, Mitchells & Butlers plc also provides a workplace pension plan in line with the Workplace Pensions Reform Regulations. This automatically
enrols all eligible workers into a Qualifying Workplace Pension Plan.
Actuarial surplus/(liabilities) are the present value of the fair value of the schemes’ assets less the defined benefit obligation. The defined benefit obligation
has been calculated using the projected unit credit method. This is based on a number of financial assumptions and estimates, the determination of which
may be significant to the balance sheet valuation.
A pension surplus is recognised where there is an expectation of future economic benefit to the Company. In the prior period, the Trustees of MABPP
resolved that any surplus arising in MABPP can be used to pay for the employer contributions to the defined contribution section of MABPP. Since this was
a change in the Trustee’s agreed use of the MABPP surplus compared to previous years, the accounting surplus was and continues to be recognised, with
the full value of the surplus expected to be an economic benefit to the Company. This economic benefit has been determined over the future lifetime of
the DC section of the plan, in particular on the basis that this section remains open to new members in its current form, and therefore will continue to
remain active for the foreseeable future.
There is no current service cost as all defined benefit schemes are closed to future accrual. Past service costs for amendment of the GMP equalisation
liability, due to changes in methodology, are recognised within separately disclosed items in the income statement. The net pension finance charge,
calculated by applying the discount rate to the pension deficit or surplus at the beginning of the period, is shown within finance income or expense.
The administration costs of the schemes are recognised within operating costs in the income statement
Remeasurement comprising actuarial gains and losses, the effect of minimum funding requirements, and the return on schemes’ assets are recognised
immediately in the balance sheet with a charge or credit to the statement of comprehensive income in the period in which they occur.
Curtailments and settlements relating to the Group’s defined benefit plans are recognised in the income statement in the period in which the curtailment
or settlement occurs.
For the defined contribution arrangements, the charge against profit is equal to the amount of contributions payable for that period.
Measurement of scheme assets and liabilities
MABPP – buy-in policy transaction
During the 53 weeks ended 30 September 2023, the Trustees of the MABPP entered a Bulk Purchase Agreement (BPA) with Standard Life. The resulting policy
was set up to provide the plan with sufficient funding to cover all known member benefits of the scheme. As at the balance sheet date the buy-in continues.
During the period, the Trustee and insurer have progressed a significant amount of work on the data cleanse project that ensures the data and benefits
covered by the BPA accurately reflect the entitlements of the MABPP members. Net reserves have been included within the MABPP balance sheet, that
cover the estimated additional costs for refinement of the benefit entitlements of the MABPP members. These net reserves are as follows:
• £15m to cover the impact of contingent spouse pension calculations (which is the majority of this cost), some data corrections and GMP rectification.
This amount is a best-estimate of a final premium that will be due to the insurer when the buy-in data cleanse process is completed, and therefore results
in a value of the bulk annuity policy that is lower than the defined benefit obligation in respect of the membership it covers by this amount.
• £24m (2024 £16m) as an additional liability arising from GMP equalisation; the majority of which will need to be secured with the insurer in future, via the
payment of an additional premium.
The GMP equalisation liability, includes a £3m charge in the current period, relating to amendment of the liability that has been recognised as a past service
cost within separately disclosed items (note 2.2).
These reserves may be updated in future as the data cleanse project progresses to allow for any further changes.
Other Information
Mitchells & Butlers plc Annual Report and Accounts 2025
171
4.5 Pensions continued
MABPP – recognition of actuarial surplus
Over the course of the previous period, the Trustees of MABPP resolved that any surplus arising in MABPP can be used to pay for the employer contributions
to the defined contribution section of MABPP. In connection with this, before the buy-out of MABEPP occurred in September 2024, the defined contribution
members within MABEPP were moved across to MABPP, along with the remaining surplus funds from the MABEPP to enable future employer contributions
for them to be met out of the surplus in the MABPP. Since this was a change in the Trustee’s agreed use of the MABPP surplus compared to previous years, the
accounting surplus was recognised in full during the 52 weeks ended 28 September 2024. This economic benefit was determined over the future lifetime of
the DC section of the plan, in particular on the basis that this section remains open to new members in its current form, and therefore will continue to remain
active for the foreseeable future.
Prior to the 52 week period ending 28 September 2024 no actuarial surplus had been recognised as the Company did not have an unconditional right to
recover any surplus from the pension plans. During the 52 week period ending 27 September 2025, the MABPP surplus has funded £12m of the Company’s
employer contributions, AVCs in respect of prior year bonus payments and death in service benefits. This is shown in the surplus movements below.
Actuarial valuation
The actuarial valuations used for IAS 19 (revised) purposes are based on the results of the latest full actuarial valuation carried out as at 31 March 2022, which
completed in December 2022, and updated by the schemes’ independent qualified actuaries to 27 September 2025. The Plan’s assets are stated at market
value at 27 September 2025 and the liabilities of the Plan and the Scheme have been assessed as at the same date using the projected unit method. IAS 19
(revised) requires that the schemes’ liabilities are discounted using market yields at the end of the period on high-quality corporate bonds.
The principal financial assumptions have been updated to reflect changes in market conditions in the period and are as follows.

| Main plan and | Main plan and |
| MABETUS | MABETUS | Executive plan
| 2025 | 2024 | 2024
Discount rate | 5.9% | 5.1% | 5.1%
Pensions increases – RPI max 5% | 3.0% | 3.0% | 3.0%
Inflation rate – RPI | 3.1% | 3.2% | 3.2%

The discount rate is based on a yield curve for AA corporate rated bonds which are consistent with the currency and estimated term of retirement benefit liabilities.
To determine the RPI assumption the gilt implied inflation yield curve has been used, reflecting the duration of the Plan’s cash flows, and adjusting for an
assumed inflation risk premium.
The mortality assumptions were reviewed following the 2022 actuarial valuation, although for MABETUS a member-specific analysis was carried out in 2024
to set a more appropriate mortality assumption due to the unique membership make-up (previously the MABETUS life expectancies were set equal to those
used in the Executive Plan and this has been finalised and updated to the most recent published mortality base tables at the period end). A summary of the
average life expectancies assumed is as follows:

| 2025 |  |  | 2024 |
| Main plan | MABETUS | Main plan | Executive plan | MABETUS
| years | years | years | years | years
Male member aged 65 (current life expectancy) | 21.0 | 22.7 | 20.9 | 22.9 | 24.3
Male member aged 45 (life expectancy at 65) | 22.4 | 24.1 | 22.3 | 24.3 | 25.9
Female member aged 65 (current life expectancy) | 23.9 | 26.3 | 23.8 | 24.7 | 27.7
Female member aged 45 (life expectancy at 65) | 25.3 | 27.6 | 25.2 | 26.1 | 28.9

Section 4 – Capital structure and financing costs continued
Notes to the consolidated financial
statements continued
Annual Report and Accounts 2025 Mitchells & Butlers plc172
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Financial Statements
Principal risks and assumptions
Following the MABEPP wind up the principal risks and assumptions apply to the MABPP and MABETUS schemes which are not exposed to any unusual,
entity specific or scheme specific risks. Whilst there are general risks as set out below they have been mitigated in the MABPP due to the impact of the buy-in.
Inflation – The majority of the plans’ obligations are linked to inflation. Higher inflation will lead to increased liabilities which is offset by the MABPP holding
the BPA with Standard Life.
Interest rate – The plans’ liabilities are determined using discount rates derived from yields on AA-rated corporate bonds. A decrease in corporate bond yields
will increase plan liabilities though this will be offset by the MABPP holding the BPA with Standard Life.
Mortality – The majority of the plans’ obligations are to provide benefits for the life of the members and their partners, so any increase in life expectancy will
result in an increase in the plans’ liabilities, although this will be offset by the MABPP holding the BPA with Standard Life.
Asset returns – The main asset held by the MABPP is the BPA with Standard Life, with other assets invested in a diversified portfolio of equities, bonds and
other assets. Volatility in the non-BPA asset values will lead to movements in the net deficit/surplus reported in the Group balance sheet for the plans which
in addition will also impact the pension finance charge in the Group income statement.
Amounts recognised in respect of defined benefit schemes
The following amounts relating to the Group’s defined benefit and defined contribution arrangements have been recognised in the Group income statement
and Group statement of comprehensive income.

| 2025 | 2024
| 52 weeks | 52 weeks
Group income statement | £m | £m
Operating profit: |  |
Employer contributions (defined contribution plans) (note 2.3) | (21) | (19)
Administrative costs (defined benefit plans) | (4) | (5)
Charge to operating profit before separately disclosed items | (25) | (24)
Past service cost (see note 2.2) | (3) | –
Charge to operating profit | (28) | (24)
Finance costs: |  |
Net pensions finance income on actuarial surplus | 7 | 6
Additional pensions finance charge due to asset ceiling | – | (8)
Net finance income/(charge) in respect of pensions | 7 | (2)
Total charge | (21) | (26)

| 2025 | 2024
| 52 weeks | 52 weeks
Group statement of comprehensive income | £m | £m
(Loss)/return on scheme assets and effects of changes in assumptions | (18) | 16
Movement in pension liabilities recognised due to asset ceiling | – | 150
Remeasurement of pension liabilities | (18) | 166

The net pension surplus is presented in the Group balance sheet as follows.

| 2025 | 2024
Group balance sheet | £m | £m
Pension surplus (MABPP) | 132 | 164
Current pension liability (MABETUS) | (1) | (1)
Non-current pension liability (MABETUS) | (21) | (24)
Net actuarial surplus | 110 | 139
Associated deferred tax liability | (28) | (35)

The schemes comprise the following assets and liabilities.

| 2025 | 2024
Actuarial surplus | £m | £m
Fair value of scheme’s assets | 1,123 | 1,238
Present value of scheme’s liabilities | (1,013) | (1,099)
Net actuarial surplus | 110 | 139

Other Information
Mitchells & Butlers plc Annual Report and Accounts 2025
173
4.5 Pensions continued
The movement in the fair value of the schemes’ assets in the period is as follows:

| Schemes’ assets |
| 2025 | 2024
| £m | £m
Fair value of schemes’ assets at beginning of period | 1,238 | 1,434
Interest income | 62 | 79
Remeasurement (loss)/gain: |  |
– (Loss)/gain on schemes’ assets (excluding amounts included in net finance charge) | (98) | 100
Utilisation of pension surplus | (12) | –
Employer contributions to MABETUS | 1 | 1
Benefits paid | (64) | (84)
Administration costs | (4) | (5)
Settlements | – | (287)
At end of period | 1,123 | 1,238

Changes in the present value of defined benefit obligation are as follows:

| Defined benefit obligation |
| 2025 | 2024
| £m | £m
Present value of defined benefit obligation at beginning of period | (1,099) | (1,313)
Interest cost | (55) | (72)
Past service cost | (3) | –
Benefits paid | 64 | 84
Remeasurement gains/(losses): |  |
– Effect of changes in demographic assumptions | 1 | (1)
– Effect of changes in financial assumptions | 102 | (81)
– Effect of experience adjustments | (23) | (3)
Settlements | – | 287
At end of period a | (1,013) | (1,099)

a. The defined benefit obligation comprises £22m (2024 £25m) relating to the MABETUS unfunded plan and £991m (2024 £1,074m) relating to the funded plans.
The weighted average duration of the defined benefit obligation is 11 years (2024 13 years).
The major categories and fair values of assets of the MABPP scheme at the end of the reporting period are as follows.

| 2025 | 2024
| £m | £m
Cash and equivalents | 94 | 82
Pooled investment funds: |  |
– Real estate debt | 11 | 16
Debt instruments: |  |
– Secured income debt | 67 | 82
MABPP insurance policies | 951 | 1,058
Fair value of assets | 1,123 | 1,238

The actual investment return achieved on schemes’ assets over the period was a loss of 3.1% (2024 profit of 12.9%), which represented a loss of £37m
(2024 gain of £180m).
Cash and cash equivalents are classified as Level 1 instruments. Forward foreign exchange contracts are classified as Level 2 instruments. Real estate debt
and secured income debt are classified as Level 3 instruments.
Section 4 – Capital structure and financing costs continued
Notes to the consolidated financial
statements continued
Annual Report and Accounts 2025 Mitchells & Butlers plc174
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Financial Statements
Sensitivity to changes in actuarial assumptions
The sensitivities regarding principal actuarial assumptions, assessed in isolation, that have been used to measure the scheme liabilities are set out below.
These are considered to be reasonable sensitivities based on the average movement over the last three financial periods. There was no change in the
methods and assumptions used in preparing the sensitivity analysis from the prior period.

| Increase/
| (decrease) in
| actuarial surplus
| 2025
| £m
2025 |
0.5% increase in discount rate | 1
0.2% increase in inflation rate | (1)
Additional one year decrease to life expectancy | 1

| Increase/
| (decrease) in
| actuarial surplus
| 2024
| £m
2024 |
0.5% increase in discount rate | 2
0.2% increase in inflation rate | (1)
Additional one year decrease to life expectancy | 1

The sensitivity analysis presented above may not be representative of the actual change in the defined benefit obligation as it is unlikely that the changes in
assumptions would occur in isolation of one another as some of the assumptions may be correlated. In presenting the above sensitivity analysis, the present
value of the defined benefit obligation has been calculated using the projected unit credit method at the end of the reporting period, which is the same as that
applied in calculating the defined benefit obligation liabilities recognised in the statement of financial position.
4.6 Share-based payments
Accounting policy
The Group operates a number of equity-settled share-based compensation plans, whereby, subject to meeting any relevant conditions, employees are
awarded shares or rights over shares. The cost of such awards is measured at fair value, excluding the effect of non market-based vesting conditions, on the
date of grant. The expense is recognised on a straight-line basis over the vesting period and is adjusted for the estimated effect of non market-based vesting
conditions and forfeitures, on the number of shares that will eventually vest due to employees leaving the employment of the Group. Fair values are
calculated using either the Black-Scholes, Binomial or Monte Carlo simulation models depending on the conditions attached to the particular share scheme.
Sharesave plan options granted to employees are treated as cancelled when employees cease to contribute to the scheme. This results in an accelerated
recognition of the expense that would have arisen over the remainder of the original vesting period.
Schemes in operation
The net charge recognised for share-based payments in the period was £9m (2024 £7m).
The Group had five equity-settled share schemes (2024 six) in operation during the period: the Performance Share Plan (PSP); the Restricted Share Plan
(RSP); Sharesave Plan (SAYE); Share Incentive Plan (SIP) and Short Term Deferred Incentive Plan (STDIP).
The vesting of all awards or options is generally dependent upon participants remaining in the employment of a participating company during the vesting
period. Further details on each scheme are provided in the Report on Directors’ remuneration on pages 98 to 118.
The fair value of awards under the Performance Share Plan, the Restricted Share Plan, the Share Incentive Plan and the Short Term Deferred Incentive Plan
are equal to the share price on the date they are granted as there is no price to be paid and employees are entitled to Dividend Accrued Shares to the value of
ordinary dividends paid or payable during the vesting period. There was no award under the RSP in the current period, as this scheme has been replaced by
the PSP. The fair value of options granted under these schemes is shown below.
Fair value of options granted

| 2025 | 2024
Share Incentive Plan | 283.0p | 282.5p
Short Term Deferred Incentive Plan | 253.5p | 229.0p
Performance Share Plan | 253.5p | 260.2p

Other Information
Mitchells & Butlers plc Annual Report and Accounts 2025
175
4.6 Share-based payments continued
The following table sets out weighted average information about how the fair value of the Sharesave Plan option grants were calculated.

| 2025 | 2024
| Sharesave | Sharesave
| Plan | Plan
Valuation model | Black-Scholes | Black-Scholes
Weighted average share price | 283.0p | 282.5p
Exercise price | 272.0p | 278.0p
Expected dividend yield | – | –
Risk-free interest rate | 3.3% | 4.13%
Volatility a | 36.1% | 43.1%
Expected life (years) b | 3.3 | 3.5
Weighted average fair value of grants during the period | 92.0p | 110.2p

a. The expected volatility is determined by calculating the historical volatility of the Company’s share price commensurate with the expected term of the options and share awards.
b. The expected life of the options represents the average length of time between grant date and exercise date.
Scheme movements in the period
The tables below summarise the movements in outstanding options during the period for each scheme.

|  |  | Weighted average |
| Number of shares |  | exercise price |
| 2025 | 2024 | 2025 | 2024
Sharesave Plan | m | m | p | p
Outstanding at the beginning of the period | 6.6 | 5.6 | 235.4 | 219.5
Granted | 1.5 | 1.8 | 272.0 | 278.0
Exercised | (0.5) | – | 243.6 | –
Forfeited | (0.8) | (0.7) | 240.2 | 220.8
Expired | (0.6) | (0.1) | 251.7 | 223.2
Outstanding at the end of the period | 6.2 | 6.6 | 241.1 | 235.4
Exercisable at the end of the period | – | – | – | –

The outstanding options for the sharesave plan scheme had an exercise price of between 199.0p and 278.0p (2024 between 199.0p and 278.0p) and the weighted
average remaining contract life was 2.6 years (2024 2.7 years). The number of forfeited shares in the period includes 514,351 (2024 369,713) cancellations.
Sharesave plan options were exercised on a range of dates. The average share price through the period was 253.1p (2024 260.0p).

| Number of shares |
| 2025 | 2024
Share Incentive Plan | m | m
Outstanding at the beginning of the period | 2.3 | 2.2
Granted | 0.3 | 0.3
Exercised | (0.2) | (0.2)
Outstanding at the end of the period | 2.4 | 2.3
Exercisable at the end of the period | 1.3 | 1.5

Options under the Share Incentive Plan are capable of remaining within the SIP trust indefinitely while participants continue to be employed.

| Number of shares |
| 2025 | 2024
Restricted Share Plan | m | m
Outstanding at the beginning of the period | 3.7 | 4.8
Exercised | (1.2) | (1.0)
Forfeited | (0.2) | (0.1)
Outstanding at the end of the period | 2.3 | 3.7
Exercisable at the end of the period | – | –

Section 4 – Capital structure and financing costs continued
Notes to the consolidated financial
statements continued
Annual Report and Accounts 2025 Mitchells & Butlers plc176
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Strategic Report
Introduction
Financial Statements
The weighted average remaining contract life of the RSP options was 0.2 years (2024 0.8 years).

| Number of shares |
| 2025 | 2024
Performance Share Plan | m | m
Outstanding at the beginning of the period | 2.7 | –
Granted | 3.0 | 2.7
Outstanding at the end of the period | 5.7 | 2.7
Exercisable at the end of the period | – | –

The weighted average remaining contract life of the PSP options was 1.8 years (2024 2.2 years).

| Number of shares |
| 2025 | 2024
STDIP | m | m
Outstanding at the beginning of the period | 0.4 | 0.1
Granted | 0.4 | 0.3
Exercised | (0.2) | –
Outstanding at the end of the period | 0.6 | 0.4
Exercisable at the end of the period | – | –

The weighted average remaining contract life of the STDIP options was 0.6 years (2024 0.6 years).
4.7 Equity
Accounting policies
Own shares
The cost of own shares held in employee share trusts and in treasury are deducted from shareholders’ equity until the shares are cancelled, reissued or
disposed of. Where such shares are subsequently sold or reissued, the fair value of any consideration received is also included in shareholders’ equity.
Dividends
Dividends proposed by the Board but unpaid at the period end are not recognised in the financial statements until they have been approved by
shareholders at the Annual General Meeting. Interim Dividends are recognised when paid.
Scrip Dividends are fully paid up from the share premium account. They are accounted for as an increase in share capital for the nominal value of the
shares issued, and a resulting reduction in share premium.

|  | 2025 |  | 2024 |
|  | Number of |  | Number of |
Called up share capital |  | shares | £m | shares | £m
Allotted, called up and fully paid |  |  |  |  |
Ordinary shares of 8 13 ⁄ | p each |  |  |  |
At start of period |  | 598,057,671 | 51 | 597,726,859 | 51
Share capital issued a |  | 806,728 | – | 330,812 | –
At end of period |  | 598,864,399 | 51 | 598,057,671 | 51

24
a. During the period, the Company issued 806,728 (2024 330,812) shares for total consideration of £1m (2024 £nil). The nominal value of shares issued under share option schemes
was £68,908 (2024 £28,257), with £1m (2024 £nil) recognised within share premium.
All of the ordinary shares rank equally with respect to voting rights and rights to receive Ordinary and Special Dividends. There are no restrictions on the
rights to transfer shares.
Details of options granted under the Group’s share schemes are contained in note 4.6.
Other Information
Mitchells & Butlers plc Annual Report and Accounts 2025
177
4.7 Equity continued
Dividends
There were no dividends declared or paid during the current period.
Share premium account
The share premium account represents amounts received in excess of the nominal value of shares on issue of new shares. Share premium of £1m (2024 £nil)
has been recognised on shares issued in the period.
Capital redemption reserve
The capital redemption reserve movement arose on the repurchase and cancellation by the Company of ordinary shares during prior periods.
Revaluation reserve
The revaluation reserve represents the unrealised gain generated on revaluation of the property estate with effect from 29 September 2007. It comprises the
excess of the fair value of the estate over deemed cost, net of related deferred taxation.
Own shares held
Own shares held by the Group represent the shares in the Company held by the employee share trusts.
During the period, the employee share trusts acquired 2,000,000 shares at a cost of £5m (2024 2,500,000 shares at a cost of £7m) and subscribed for 260,378
shares (2024 302,420) at a cost of £nil (2024 £nil). The employee share trusts released 1,687,954 (2024 1,280,727) shares to employees on the exercise of
options and other share awards for a total consideration of £4m (2024 £3m). The 6,084,571 shares held by the trusts at 27 September 2025 had a market value
of £15m (2024 5,512,147 shares held had a market value of £17m).
The Company has established two employee share trusts:
Share Incentive Plan (‘SIP’) Trust
The SIP Trust was established in 2003 to purchase shares on behalf of employees participating in the Company’s Share Incentive Plan. Under this scheme,
eligible employees are awarded free shares which are normally held in trust for a holding period of at least three years. After three years, the shares may be
transferred or sold by the employee but would be subject to income tax and National Insurance contributions. After five years the shares may be transferred
to or sold by the employee free of income tax and National Insurance contributions. The SIP Trust buys the shares in the market or subscribes for newly issued
shares with funds provided by the Company. During the holding period, dividends are paid directly to the participating employees. At 27 September 2025,
the trustees, Equiniti Share Plan Trustees Limited, held 2,350,690 (2024 2,285,174) shares in the Company. Of these shares, 1,300,165 (2024 1,127,251) shares
are available to employees, 1,028,403 (2024 1,131,504) shares have been awarded to employees but are still required to be held within the SIP Trust until the
three year holding period has expired, and the remaining 22,122 (2024 26,419) shares are unallocated.
Employee Benefit Trust (‘EBT’)
The EBT was established in 2003 in order to satisfy the exercise or vesting of existing and future share options and awards under the Restricted Share Plan,
Performance Restricted Share Plan, Short Term Deferred Incentive Plan and the Sharesave Plan. The EBT purchases shares in the market or subscribes for
newly issued shares, using funds provided by the Company, based on expectations of future requirements. Dividends are waived by the EBT. At 27 September
2025, the trustees, Apex Group Fiduciary Services Limited, were holding 3,733,881 (2024 3,226,973) shares in the Company.
Hedging reserve
The hedging reserve comprises the effective portion of the cumulative net change in the fair value of cash flow hedging instruments related to hedged future
cash flows.
Translation reserve
The translation reserve is used to record exchange differences arising from the translation of the consolidated financial statements of foreign subsidiaries.
Retained earnings
The Group’s main operating subsidiary, Mitchells & Butlers Retail Limited, had retained earnings under FRS 101 of £2,561m at 27 September 2025 (2024 £2,384m).
Its ability to distribute these reserves by way of dividends is restricted by the securitisation covenants (see note 4.1).
Section 4 – Capital structure and financing costs continued
Notes to the consolidated financial
statements continued
Annual Report and Accounts 2025 Mitchells & Butlers plc178
Governance
Strategic Report
Introduction
Financial Statements
5.1 Acquisitions
In the prior period, on 14 May 2024, the Group acquired the entire share capital of Pesto Restaurants Ltd, a group of 10 restaurants based in the UK, for
consideration which will be determined over two payments and partly contingent on future performance of the business. At acquisition, the consideration
was assessed at £12m for the purposes of calculation of goodwill under IFRS 3.
The amounts recognised in respect of identifiable assets and liabilities relating to the acquisition were as follows.

| Fair value on
| acquisition
| £m
Land and buildings | 7
Right-of-use assets | 7
Brand intangible | 2
Cash and cash equivalents | 2
Trade and other payables | (3)
Lease liabilities | (5)
Borrowings | (1)
Deferred tax liability | (2)
Net identifiable assets of Pesto Restaurants Ltd | 7
Goodwill | 5
Fair value of assets and liabilities | 12
Consideration: |
Initial cash consideration | 4
Contingent consideration | 8
Total consideration | 12
Initial cash consideration | 4
Less: cash and cash equivalents acquired | (2)
Net cash outflow on acquisition | 2

Goodwill of £5m arose on the acquisition of Pesto Restaurants Ltd primarily through the benefits that will be gained from cost synergies that will be obtained
on joining the Group and future conversions of other Group outlets.
The brand intangible was fair valued by reference to an estimated royalty income based on forecast cash flows for Pesto Restaurants Ltd over the expected
useful life of 20 years.
In the prior period, contingent consideration of £8m was shown as a non-current liability within other payables (see note 3.4). Contingent consideration
is payable to the previous owners of Pesto Restaurants Ltd, at a level dependent on the financial performance of that business over the 12 months ending
28 September 2025, and not to exceed £15m. It was measured at £12m, its fair value, at the acquisition date based on trading forecast and discounted at
a risk-free rate.
Contingent consideration is measured in line with the Group’s accounting policy for business combinations (see note 3.6). It has been re-measured at
27 September 2025 at £15m, an increase of £3m. The increase has been recognised as a non-measurement period adjustment, with the loss being recognised
in the income statement (see note 2.2).
Section 5 – Other notes
Other Information
Mitchells & Butlers plc Annual Report and Accounts 2025
179
5.2 Related party transactions
Key management personnel
Employees of the Mitchells & Butlers plc Group who are members of the Board of Directors or the Executive Committee of Mitchells & Butlers plc are deemed
to be key management personnel. It is the Board who have responsibility for planning, directing and controlling the activities of the Group.
Compensation of key management personnel of the Group:

| 2025 | 2024
| 52 weeks | 52 weeks
| £m | £m
Short-term employee benefits | 6 | 7
Share-based payments | 4 | –
| 10 | 7

Movements in share options held by the Directors of Mitchells & Butlers plc are summarised in the Report on Directors’ remuneration in the information
labelled as audited by KPMG on pages 98 to 118.
Associate companies
The Group held a of property lease agreement with its associate company Fatboy Pub Company Limited.
The Group has entered into the following transactions with the associates:

|  | Fatboy Pub Company Limited
| 2025 | 2024
| 52 weeks | 52 weeks
| £000 | £000
Rent charged | 122 | 128
Sales of goods and services | 13 | 12
| 135 | 140

The balance due from Fatboy Pub Company at 27 September 2025 was £nil (2024 £14,000), net of a provision of £173,000 (2024 £298,000).
Related parties
During the prior period, Mitchells & Butlers Retail Limited entered an option arrangement with Tottenham Hotspur Football Co Limited (THFC), a related
party, to sell the company’s leasehold interest in a trading site. THFC paid an agreed amount to the company under the option agreement. Should the option
under the option agreement be exercised, THFC would pay a further amount to acquire the site at the fair market value at the time the option agreement was
entered into.
Notes to the consolidated financial
statements continued
Section 5 – Other notes continued
Annual Report and Accounts 2025 Mitchells & Butlers plc180
Governance
Strategic Report
Introduction
Financial Statements
5.3 Subsidiaries and associates
Subsidiaries
Transactions between the Company and its subsidiaries, which are related parties, have been eliminated on consolidation.
Mitchells & Butlers plc is the ultimate controlling party and the beneficial owner of all of the equity share capital, either itself or through subsidiary
undertakings, of the following companies:

| Country of | Registration |
Name of subsidiary | incorporation | Number | Nature of business
Principal operating subsidiaries |  |  |
Mitchells & Butlers Retail Limited | England and Wales | 00024542 | Leisure retailing
Mitchells & Butlers Retail (No. 2) Limited | England and Wales | 03959664 | Leisure retailing
Ha Ha Bar & Grill Limited | England and Wales | 06295359 | Leisure retailing
Orchid Pubs & Dining Limited | England and Wales | 06754332 | Leisure retailing
ALEX Gaststätten Gesellschaft mbH & Co KG | Germany |  | Leisure retailing
Pesto Restaurants Ltd | England and Wales | 05162378 | Leisure retailing
Midco 1 Limited | England and Wales | 05835640 | Property leasing company
Mitchells & Butlers Leisure Retail Limited | England and Wales | 01001181 | Service company
Mitchells & Butlers Germany GmbH a,c | Germany |  | Service company
Mitchells & Butlers Finance plc | England and Wales | 04778667 | Finance company
Other subsidiaries |  |  |
Mitchells & Butlers (Property) Limited b | England and Wales | 01299745 | Property management
Standard Commercial Property Developments Limited b | England and Wales | 00056525 | Property development
Mitchells & Butlers Holdings (No.2) Limited a,b | England and Wales | 06475790 | Holding company
Mitchells & Butlers Holdings Limited b | England and Wales | 03420338 | Holding company
Mitchells & Butlers Leisure Holdings Limited b | England and Wales | 02608173 | Holding company
Mitchells & Butlers Retail Holdings Limited | England and Wales | 04887979 | Holding company
Ego Restaurants Holdings Limited | England and Wales | 06425958 | Non-trading
Old Kentucky Restaurants Limited | England and Wales | 00465905 | Trademark ownership
Mitchells & Butlers (IP) Limited b | England and Wales | 04885717 | Dormant
Mitchells & Butlers Retail Property Limited a,b | England and Wales | 06301758 | Non-trading
Mitchells and Butlers Healthcare Trustee Limited b | England and Wales | 04659443 | Healthcare trustee
ALEX Gaststätten Immobiliengesellschaft mbH c | Germany |  | Property management
ALL BAR ONE Gaststätten Betriebsgesellschaft mbH c | Germany |  | Leisure retailing
ALEX Alsterpavillon Immobilien GmbH & Co KG c | Germany |  | Property management
ALEX Alsterpavillon Management GmbH c | Germany |  | Management company
ALEX Gaststätten Management GmbH c | Germany |  | Management company
Miller & Carter Gaststätten Betriebsgesellschaft mbH c | Germany |  | Leisure retailing
Browns Restaurant (Brighton) Limited d | England and Wales | 01564302 | Dormant
Browns Restaurant (Bristol) Limited d | England and Wales | 02351724 | Dormant
Browns Restaurant (Cambridge) Limited d | England and Wales | 01237917 | Dormant
Browns Restaurant (London) Limited d | England and Wales | 00291996 | Dormant
Browns Restaurant (Oxford) Limited d | England and Wales | 01730727 | Dormant
Browns Restaurants Limited d | England and Wales | 01001320 | Dormant
Lander & Cook Limited d | England and Wales | 11160005 | Dormant
3Sixty Restaurants Limited b | England and Wales | 07540663 | Holding company
Mitchells & Butlers (Guestwise Parent) Limited b | England and Wales | 16171261 | Holding company
Mitchells & Butlers (Guestwise Holdco) Limited b | England and Wales | 16172904 | Non-trading

a. Shares held directly by Mitchells & Butlers plc.
b. These companies are exempt from the requirement to prepare individual audited financial statements in respect of the 52 week period ended 27 September 2025 by virtue
of sections 479A and 479C of the Companies Act 2006.
c. The German subsidiary companies are consolidated on the basis of their reporting period, being the year ending 30 September 2025 (2024 30 September 2024).
d. These companies are exempt from the requirement to prepare and file individual financial statements in respect of the 52 week period ended 27 September 2025 by virtue
of sections 394A and 448A of the Companies Act 2006.
All companies registered in England and Wales operate within the United Kingdom. The registered office for these companies is 27 Fleet Street,
Birmingham, B3 1JP.
All companies registered in Germany operate solely within Germany. The registered office for these companies is Adolfstrasse 16, 65185 Wiesbaden.
Other Information
Mitchells & Butlers plc Annual Report and Accounts 2025
181
5.3 Subsidiaries and associates continued
Associates
Details of the Company’s associates, held indirectly, are as follows:

|  | Country of |  |  | Proportion of |
|  | incorporation and |  |  | ownership | Proportion of voting
Name of associate | Registered office | operation | Country of operation | Nature of business | interest % | power interest %
Fatboy Pub Company | 5 Stratford Place, | England and |  |  |  |
Limited | London W1C 1AX | Wales | United Kingdom | Leisure retailing | 25 | 25

Section 5 – Other notes continued
Notes to the consolidated financial
statements continued
Annual Report and Accounts 2025 Mitchells & Butlers plc182
Governance
Strategic Report
Introduction
Financial Statements
Notes
2025
£m
2024
£m
Non-current assets
Investments in subsidiaries 5 1,966 1,966
Amounts owed by subsidiary undertakings 6 384 384
Pension surplus 4 132 164
2,482 2,514
Current assets
Trade and other receivables 6 151 206
Cash and cash equivalents 79 47
230 253
Current liabilities
Pension liabilities 4 (1) (1)
Borrowings 8 (35) (4)
Trade and other payables 7 (371) (427)
(407) (432)
Non-current liabilities
Pension liabilities 4 (21) (24)
Deferred tax liabilities 9 (24) (31)
(45) (55)
Net assets 2,260 2,280
Equity
Called up share capital 10 51 51
Share premium account 10 358 357
Capital redemption reserve 3 3
Own shares held 10 (10) (9)
Retained earnings 1,858 1,878
Total equity 2,260 2,280
The Company reported a loss for the 52 weeks ended 27 September 2025 of £9m (52 weeks ended 28 September 2024 loss of £16m).
The Company financial statements were approved by the Board and authorised for issue on 27 November 2025.
They were signed on its behalf by:
Tim Jones
Chief Financial Officer
The accounting policies and the notes on pages 185 to 188 form an integral part of these Company financial statements.
Registered Number: 04551498
Mitchells & Butlers plc Company financial statements
Company balance sheet
27 September 2025
Other Information
Mitchells & Butlers plc Annual Report and Accounts 2025
183
Share
capital
£m
Share
premium
£m
Capital
redemption
reserve
£m
Own
shares
held
£m
Retained
earnings
£m
Total
equity
£m
At 30 September 2023 51 357 3 (5) 1,766 2,172
Loss after taxation – – – – (16) (16)
Remeasurement of pension liability – – – – 166 166
Deferred tax on remeasurement of pension liability – – – – (42) (42)
Total comprehensive income – – – – 108 108
Purchase of own shares – – – (7) – (7)
Release of own shares – – – 3 (3) –
Credit in respect of employee share schemes – – – – 7 7
At 28 September 2024 51 357 3 (9) 1,878 2,280
Loss after taxation – – – – (9) (9)
Remeasurement of pension liability – – – – (21) (21)
Deferred tax on remeasurement of pension liability – – – – 5 5
Total comprehensive expense – – – – (25) (25)
Share premium issued 1 – – – 1
Purchase of own shares – – – (5) – (5)
Release of own shares – – – 4 (4) –
Credit in respect of employee share schemes – – – – 9 9
At 27 September 2025 51 358 3 (10) 1,858 2,260
Details of each reserve are provided in note 4.7 to the consolidated financial statements.
Company statement of changes in equity
For the 52 weeks ended 27 September 2025
Mitchells & Butlers plc Company financial statements continued
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Financial Statements
1. Basis of preparation
Basis of accounting
These Company financial statements were prepared in accordance with Financial Reporting Standard 101 ‘Reduced Disclosure Framework’ as issued by the FRC.
As permitted by FRS 101, the Company has taken advantage of the disclosure exemptions available under that standard in relation to IFRS 2 Share-based
Payments, requirements of IFRS 7 Financial Instruments: Disclosures, presentation of a cash flow statement, IAS 36 Impairment of Assets, standards not yet
effective and IAS 24 Related Party Disclosures. Where required, equivalent disclosures are given in the consolidated financial statements.
The Company financial statements have been prepared under the historical cost convention. The Company’s accounting policies have been applied on
a consistent basis to those set out in the relevant notes to the consolidated financial statements.
Share options and share awards are granted to employees of the Mitchells & Butlers Group, by the Company. The Company accounts for share-based
payments, in line with the policy disclosed in note 4.6 of the consolidated financial statements. The Company’s income statement charge in respect of
share-based payments represents the charge for options of employees of the Company. Other companies within the Group are recharged an amount relating
to their employees.
Going concern
The Directors have adopted the going concern basis in preparing these financial statements, as described in section 1 of the consolidated financial statements.
Accounting judgements and sources of estimation uncertainty
The accounting judgements and estimates of the Company are considered alongside those of the Group. The key judgements and sources of estimation
uncertainty of the Company are: the recognition of the pension surplus described in note 4.5 of the consolidated financial statements; the determination
of appropriate cash flow forecasts for the investment impairment review described in note 5; and the assessment of expected credit loss on amounts owed
by subsidiary undertakings as described in note 6.
Foreign currencies
Transactions in foreign currencies are recorded at the exchange rates ruling on the dates of the transactions. Monetary assets and liabilities denominated
in foreign currencies are translated into sterling at the relevant rates of exchange ruling at the balance sheet date.
2. Profit and loss account
Profit and loss account
The Company has not presented its own profit and loss account, as permitted by Section 408 of the Companies Act 2006.
The Company recorded a loss after tax of £9m (2024 loss of £16m), less dividends of £nil (2024 £nil).
Audit remuneration
Auditor’s remuneration for audit services to the Company was £30,000 (2024 £30,000). This is borne by another Group company, as are any other costs
relating to non-audit services (see note 2.3 to the consolidated financial statements).
3. Employees and Directors
2025
52 weeks
2024
52 weeks
Average number of employees, including part-time employees 2 2
Employees of Mitchells & Butlers plc consist of Executive Directors who are considered to be the key management personnel of the Company.
Details of employee benefits and post-employment benefits including share-based payments are included within the Report on Directors’ remuneration
in the information labelled as audited by KPMG on pages 98 to 118.
The charge recognised for share-based payments in the period is £3m (2024 £2m).
Notes to the Mitchells & Butlers plc
Company financial statements
Other Information
Mitchells & Butlers plc Annual Report and Accounts 2025
185
4. Pensions
Accounting policy
The accounting policy for pensions is disclosed in the consolidated financial statements in note 4.5.
Pension assets and liabilities
At 27 September 2025 the Company’s pension surplus in relation to the MABPP was £132m (2024 £164m).
At 27 September 2025 the Company’s pension liability in relation to MABETUS was £22m (2024 £25m). Of this amount, £1m (2024 £1m) is a current liability
and £21m (2024 £24m) is a non-current liability.
The Company is the sponsoring employer of the Group’s pension plans. Information concerning the pension scheme arrangements operated by the
Company and associated current and future contributions is contained within note 4.5 to the consolidated financial statements on pages 171 to 175.
The pension amounts and disclosures included in note 4.5 to the consolidated financial statements are equivalent to those applicable for the Company.
5. Investments in subsidiaries
Accounting policy
The Company’s investments in Group undertakings are held at cost less provision for impairment. The value of these investments are reviewed for
impairment if events or changes in circumstances indicate that the carrying amount may not be recoverable, or that there is evidence that past impairments
may be reversed. Impairment reviews are performed by comparing the recoverable amount with carrying value. Recoverable amount is deemed as being
either future discounted cash flows where the subsidiary is a trading entity or net asset value where the subsidiary has no trading assets.
Investments in
subsidiary
undertakings
£m
Cost
At 30 September 2023 3,745
Additions 100
At 28 September 2024 3,845
At 27 September 2025 3,845
Provision
At 30 September 2023 1,879
Impairment –
At 28 September 2024 1,879
Impairment –
At 27 September 2025 1,879
Net book value
At 27 September 2025 1,966
At 28 September 2024 1,966
At 30 September 2023 1,866
a. During the prior period the Company subscribed for 1 ordinary share, of £1 nominal value, at a subscription price of £100m each in Mitchells & Butlers Holdings (No.2) Limited
Mitchells & Butlers plc is the beneficial owner of all of the equity share capital of companies within the Group, either itself or through subsidiary undertakings.
In addition, the Company has an indirect investment in an associate company through subsidiary undertakings.
Certain subsidiary companies are exempt from the requirement to prepare individual audited financial statements in respect of the 52 week period ended
27 September 2025 by virtue of sections 479A and 479C of the Companies Act 2006. In addition, certain other companies are exempt from the requirement
to prepare and file individual financial statements in respect of the 52 week period ended 27 September 2025 by virtue of sections 394A and 448A of the
Companies Act 2006.
For further details, see note 5.3 of the consolidated financial statements for a full list of subsidiaries and associates.
Notes to the Mitchells & Butlers plc
Company financial statements continued
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Financial Statements
5. Investments in subsidiaries continued
Impairment review
Investments in parent companies which hold trading subsidiaries have been tested for impairment using pre-tax forecast cash flows, discounted by applying
a pre-tax discount rate of 11.3% (2024 11.0%) and a long-term growth rate of 2.0% (2024 2.0%).
The long-term growth rate is based on up-to-date economic data points and for consistency with the overall Group profit forecast. No further impairment
has been recognised as a result of this review in the current or prior period, and there are no triggers to indicate any impairment should be reversed.
For the investment impairment review, judgement has been applied to determine the most appropriate forecast to use as a result of the impact of cost inflation
on site profits. Forecasts for cash flows of trading subsidiaries have been based on the overall Group forecast for FY 2026 to FY 2028 that was in place at the
balance sheet date. The assumptions are consistent with those used in the impairment review performed at a cash-generating unit level as disclosed in the
consolidated financial statements in note 3.3. The assessment is not sensitive to these key assumptions.
6. Trade and other receivables
2025
£m
2024
£m
Non-current
Amounts owed by subsidiary undertakings 384 384
384 384
2025
£m
2024
£m
Current
Amounts owed by subsidiary undertakings 149 192
Defined benefit pension blocked accounts
a
– 12
Prepayments 2 2
151 206
a. Contributions to the MABEPP scheme were paid into a blocked account since the scheme buy-in that took place during the year ended 24 September 2022. The full amount has
been repaid to the Company in the current period. See note 4.5 to the consolidated financial statements for further details).
Amounts owed by subsidiary undertakings are repayable on demand. However, £384m (2024 £384m) of these amounts are disclosed as non-current as they
are not expected to be settled within the next twelve months. Interest is not charged on all balances. Where interest is charged, it is charged at market rate,
based on what can be achieved on corporate deposits.
Critical accounting judgements
Management has applied judgement when assessing the expected credit loss (ECL) on amounts owed by subsidiary undertakings. An assessment of the
future trading cash flows and asset values of the subsidiaries has been made which also considers intercompany transactions between Group companies.
As a result of this assessment, no ECL has been recognised in the current period as it is immaterial.
The Directors consider that the carrying value of amounts owed by subsidiary undertakings approximately equates to their fair value.
7. Trade and other payables
Current
2025
£m
2024
£m
Amounts owed to subsidiary undertakings
a
369 425
Accrued charges 1 1
Other payables 1 1
371 427
a. Amounts owed to subsidiary undertakings are repayable on demand. Interest is not charged on all balances. Where interest is charged, it is charged at market rate, based on
what can be achieved on corporate deposits.
Other Information
Mitchells & Butlers plc Annual Report and Accounts 2025
187
Notes to the Mitchells & Butlers plc
Company financial statements continued
8. Borrowings
Accounting policy
The accounting policy for borrowings is disclosed in the consolidated financial statements in note 4.1.
Borrowings can be analysed as follows:
2025
£m
2024
£m
Current
Bank overdraft 35 4
Total borrowings 35 4
Unsecured revolving credit facility
The Company holds an uncommitted gross overdraft facility of £50m (2024 £50m) as part of the Group’s notional pooling arrangements with a net facility
limit of £5m (2024 £5m) across the participating Group companies. The amount drawn at 27 September 2025 is £35m (2024 £4m).
9. Taxation
Accounting policy
The accounting policy for taxation is disclosed in the consolidated financial statements in note 2.4.
Deferred tax assets/(liabilities)
Movements in the deferred tax assets and liabilities can be analysed as follows:
£m
At 30 September 2023 10
Credited to income statement – pensions 1
Charged to other comprehensive income – pensions (42)
At 28 September 2024 (31)
Credited to income statement – pensions 2
Credited to other comprehensive income – pensions 5
At 27 September 2025 (24)
Analysed as tax timing differences related to:
2025
£m
2024
£m
Pensions (28) (35)
Tax losses
a
3 3
Share-based payments 1 1
Deferred tax liability (24) (31)
a. Tax losses arising in 2008 which are now recoverable by offset against other income.
Further information on the changes to tax legislation are provided in note 2.4 to the consolidated financial statements.
10. Equity
Called up share capital and share premium
Details of the amount and nominal value of called up and fully paid share capital and share premium are contained in note 4.7 to the consolidated
financial statements.
Dividends
Details of the dividends declared and paid by the Company are contained in note 4.7 to the consolidated financial statements.
Own shares held
Details of the amount of own shares held are contained in note 4.7 to the consolidated financial statements.
Annual Report and Accounts 2025 Mitchells & Butlers plc188
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Introduction
Financial Statements
Alternative performance measures
The performance of the Group is assessed using a number of Alternative Performance Measures (APMs).
The Group’s results are presented both before and after separately disclosed items. Adjusted profit measures are presented excluding separately disclosed
items as we believe this provides both management and investors with useful additional information about the Group’s performance and supports an effective
comparison of the Group’s trading performance from one period to the next. Adjusted profit measures are reconciled to unadjusted IFRS results on the face
of the income statement with details of separately disclosed items provided in note 2.2.
The Group’s results are also described using other measures that are not defined under IFRS and are therefore considered to be APMs. These APMs are used
by management to monitor business performance against both shorter term budgets and forecasts but also against the Group’s longer-term strategic plans.
APMs used to explain and monitor Group performance include:
APM Definition Source
EBITDA Earnings before interest, tax, depreciation and amortisation, before movements in the
valuation of the property portfolio.
Group income statement
Adjusted EBITDA EBITDA before separately disclosed items is used to calculate net debt to EBITDA. Group income statement
Operating profit Earnings before interest and tax. Group income statement
Adjusted operating profit Operating profit before separately disclosed items. Group income statement
Like-for-like sales growth Like-for-like sales growth reflects the sales performance against the comparable period
in the prior year of UK managed pubs, bars and restaurants that were trading in the two
periods being compared, unless marketed for disposal.
APM A
Adjusted earnings per share (EPS) Earnings per share using profit before separately disclosed items. Note 2.5
Net debt Net debt comprises cash and cash equivalents, cash deposits net of borrowings and
discounted lease liabilities. Presented on a constant currency basis due to the inclusion
of the fixed exchange rate component of the cross currency swap.
Note 4.4
Net debt : Adjusted EBITDA The multiple of net debt including lease liabilities, as per the balance sheet compared
against EBITDA before separately disclosed items, which is a widely used leverage
measure in the industry.
APM D
Return on capital Return generating capital includes investments made in new sites and investment in
existing assets that materially change the guest offer. Return on investment is measured
by incremental site EBITDA following investment expressed as a percentage of return
generating capital. Incremental EBITDA reflects the increase in profit following investment,
with the pre-investment profit being measured as the average annual profit prior to
investment. Return on investment is measured for four years following investment.
Measurement commences three periods following the opening of the site.
APM E
Mitchells & Butlers plc Annual Report and Accounts 2025
189
Other Information
A. Like-for-like sales
The sales this year compared to the sales in the previous year of all UK managed sites that were trading in the two periods being compared, expressed as a
percentage. This widely used industry measure provides additional insight into the trading performance than total revenue which is impacted by acquisitions
and disposals. Like-for-like sales is provided on a 52-week basis.
Source
2025
£m
2024
£m
Year-on-year
%
Reported revenue Income statement 2,711.0 2,610.0 3.9%
Less non like-for-like sales (237.3) (237.3) 0.0%
Like-for-like sales 2,473.7 2,372.7 4.3%
Drink sales
Source
2025
£m
2024
£m
Year-on-year
%
Reported drink revenue Note 2.3 1,172.0 1,132.0 3.5%
Less non like-for-like drink sales (91.0) (93.0) 2.2%
Like-for-like sales 1,081.0 1,039.0 4.0%
Food sales
Source
2025
£m
2024
£m
Year-on-year
%
Reported food revenue Note 2.3 1,440.0 1,385.0 4.0%
Less non like-for-like food sales (131.0) (126.9) (3.2%)
Food like-for-like sales 1,309.0 1,258.1 4.0%
Other sales
Source
2025
£m
2024
£m
Year-on-year
%
Reported other revenue Note 2.3 99.0 93.0 6.5%
Less non like-for-like other sales (15.3) (17.4) 12.1%
Other like-for-like sales 83.7 75.6 10.7%
B. Adjusted operating profit
Operating profit before separately disclosed items as set out in the Group Income Statement. Separately disclosed items are those which are separately
identified by virtue of their size or nature. Excluding these items provides useful additional information in the comparison of the Group’s trading performance
from one period to the next.
Source
2025
£m
2024
£m
Year-on-year
%
Operating profit Income statement 322 300 7.3%
Separately disclosed items Income statement 8 12 (33.3%)
Adjusted operating profit Income statement 330 312 5.8%
Reported revenue Income statement 2,711 2,610 3.9%
Adjusted operating margin 12.2% 12.0% 0.2ppts
Alternative performance measures continued
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Other Information
C. Adjusted earnings per share
Earnings per share using profit before separately disclosed items. Separately disclosed items are those which are separately identified by virtue of their size
or nature. Excluding these items allows a more effective comparison of the Group’s trading performance from one period to the next.
Source
2025
£m
2024
£m
Year-on-year
%
Profit/(loss) for the period Income statement 177 149 18.8%
Add back separately disclosed items Income statement 7 8 (12.5%)
Adjusted profit 184 157 17.2%
Basic weighted average number of shares Note 2.5 595 595 –%
Adjusted earnings per share 30.9p 26.4p 17.0%
D. Net Debt: Adjusted EBITDA
The multiple of net debt as per the balance sheet compared against EBITDA before separately disclosed items which is a widely used leverage measure
in the industry. From FY 2020, leases are included in net debt following adoption of IFRS16. Adjusted EBITDA is used for this measure to prevent distortions
in performance resulting from separately disclosed items.
Source
2025
£m
2024
£m
Year-on-year
%
Net Debt including leases Note 4.4 1,277 1,436 (11.1%)
EBITDA Income statement 460 444 3.6%
Add back separately disclosed items Income statement 5 (2) 350.0%
Adjusted EBITDA 465 442 5.2%
Net debt : Adjusted EBITDA 2.7 3.2
E. Return on capital
Return generating capital includes investments made in new sites and investment in existing assets that materially changes the guest offer. Return on
investment is measured by incremental site EBITDA following investment expressed as a percentage of return generating capital. Return on investment is
measured for four years following investment. Measurement of return commences three periods following the opening of the site.
Return on expansionary capital
Source
2024
FY 2021–24
£m
2025
FY 2022–24
£m
2025
FY 2025
£m
2025
Total
£m
Maintenance and infrastructure 178 164 65 229
Remodel – refurbishment 203 194 91 285
Non-expansionary capital 381 358 156 514
Remodel expansionary 8 9 2 11
Conversions and acquisitions
a
43 50 14 64
Expansionary capital for return calculation 51 59 16 75
Expansionary capital open < 3 periods pre year end 7 (5) 8 3
Freehold purchases 26 20 1 21
Total capital Cash flow 465 432 181 613
Adjusted EBITDA Income statement 1,337 1,169 465 1,634
Non-incremental EBITDA 1,327.3 1,159 463 1,622
Incremental EBITDA 9.7 10 2.5 12.5
Return on expansionary capital 19% 17% 16% 16.7%
a. Conversion and acquisition capital is net of capex incurred for projects which have been open for less than 3 periods pre year end.
Mitchells & Butlers plc Annual Report and Accounts 2025
191
Shareholder information
Contacts
Registered office
27 Fleet Street
Birmingham B3 1JP
Telephone 0121 498 4000
Registered in England No. 4551498
Registrar
Equiniti
Aspect House
Spencer Road
Lancing
West Sussex BN99 6DA
Telephone +44 (0) 371 384 2065*
For deaf and speech impaired customers, we welcome calls via Relay UK.
Please see www.relayuk.bt.com for more information.
www.mbplc.com/investors/contacts/
* Lines are open 8.30am to 5.30pm (UK time), Monday to Friday, excluding public
holidays in England & Wales.
Key dates
These dates are indicative only and may be subject to change.
Annual General Meeting January 2026
Announcement of interim results May 2026
Pre-close trading update September 2026
2026 final results announcement November 2026
In line with our sustainability strategy to lessen the negative impact of
our business, we have reduced the number of Annual Reports we have
printed this year. Once that supply is exhausted, we will not print any
further copies, though the Annual Report will be available on our website
and can be printed from there if required, using the following link:
www.mbplc.com/investors/annualreport
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Introduction
Other Information
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Mitchells & Butlers plc
27 Fleet Street
Birmingham B3 1JP
Tel: +44 (0)121 498 4000
Company Number: 4551498