Pub and restaurant group Mitchells & Butlers saw its pre-tax losses fall to £42m for the year to September 25, blamed on higher energy bills, supply costs, workforce shortages and Brexit.

The company behind brands including All Bar One, Miller & Carter, Toby Carvery, Harvester, O'Neill's and Sizzling Pubs reported a second year in a row of annual losses, but said sales are beginning to recover to pre-pandemic levels.

In its previous financial year, which included the six months after the first national lockdown in March 2020, Mitchells & Butlers reported a pre-tax loss of £123m.

Turnover for the period was £1.06billion, down from £1.47 billion in 2019/2020.

The group said it faced short-term supply chain issues and profit margins would be lower than pre-pandemic levels due to inflation in food and utility charges as well as labour costs.

It added that it had made efforts to strengthen its balance sheet through a £351m equity raise and refinancing of debt arrangements.

Chief executive Phil Urban said: "Despite the inevitable challenges faced by our business over the past year, we are now well positioned to regain the momentum previously built as we come out of the pandemic.

"The trading environment remains challenging and cost headwinds continue to put pressure on the sector.

"However, we have strengthened our balance sheet and returned to profitability and cash generation, allowing us to resume our capital plan and Ignite programme which will deliver sales and efficiency improvements to help combat these challenges.

"Demand for our well-loved brands has been demonstrated by an encouraging return to sustained like-for-like sales growth since restrictions have been lifted and we are confident in our ability to continue our recovery as a market leading operator."

Mitchells & Butlers employs more than 40,000 workers across 1,700 sites in the UK, but was forced to cut 1,300 jobs in 2020 as a result of reduced trade.