The company’s assessment of the outlook came as it reported “another exceptionally strong festive trading period”, with like-for-like sales increasing by 4.5% in the 15 weeks to January 10. The rates of sales growth increased from the 3.8% recorded in the first eight weeks to November 22, underlining the strength of Christmas trading across the company’s 1,700-strong estate.

Mitchells & Butlers, which operates outlets under brands such as O’Neill’s, Harvester, and All Bar One, updated the market amid a period of significant concern in the wider pub industry.

Industry groups are alarmed at the prospect of steep rises in business rates on both sides of the Border following the recent revaluation of non-domestic properties. In Scotland, some businesses have seen their rateable values rise by several hundred per cent, paving the way for major hikes in business rates bills from April.

Scottish Finance Secretary Shona Robison unveiled a package of business rates support when she announced the Scottish Budget on Tuesday, including £138m of relief for the retail, hospitality, and leisure sectors over the next three years. But industry figures said the measures did not go far enough.

Read more:

Chancellor of the Exchequer Rachel Reeves has meanwhile signalled that “additional support” is on its way for pubs in England before new rates bills come into effect in April. Ms Robison said Tuesday that the Scottish Government was ready to use any “additional resources” that may stem from “possible changes to business rates for pubs in England” to provide further support to the sector in Scotland, but was “still awaiting details from the UK Government”.

Aside from business rates, the hospitality and tourism industry across the UK has been battling rising energy and labour costs, the latter having risen sharply following a hike in employer national insurance contributions that came into effect in April last year.

Greg Johnson, research analyst at Shore Capital, said: “Mitchells & Butlers, along with its punters, appears to have enjoyed itself over the Christmas period, reporting very robust trading and strengthened YTD (year-to-date) trends. The performance TD (to date) is above our full year assumptions, which provides further comfort to our (likely) unchanged estimates, which are slightly below consensus.”

Shore Capital noted that food and drink sales at the company had performed “well ahead” of the market, and had increased by 5.1% and 3.8% respectively in the 15 weeks to January 10.

The broker observed that the company’s gross cost guidance for the full year was unchanged at £130m, which it expects to be “broadly offset by LFL (like-for-like) sales growth (£70m), cost efficiencies (£30m) and net openings and reformats (£20m), supported by the step up in capex (capital expenditure) this year”.

Shore added that it was likely to retain its forecast for Mitchells & Butlers to report an operating profit of £318m, below consensus, but declared that it sees “support to full-year forecasts from the strength of YTD trading and the potential for greater cost efficiencies”.

Phil Urban, chief executive of Mitchells & Butlers, said: “We are pleased to report another exceptionally strong festive trading period, marked by numerous record-breaking performances across our brand portfolio and continued market outperformance in every segment. Sales growth on key festive dates was particularly strong, with Christmas Day setting a new all-time record for the highest sales day, surpassing last year’s benchmark.

“Our focus remains on tackling the significant cost headwinds faced by the industry this financial year through the effective execution of our Ignite programme and our successful capital investment programme, driving both cost efficiencies and increased sales. We remain well positioned to further grow market share in the year ahead by leveraging the strength of our diverse portfolio of established brands and enviable estate locations.”