All Bar One and Harvester owner Mitchells and Butlers warned of a sharp rise in costs yesterday but said it had been cheered by a strong sales performance.

The owner of 2,000 pubs in prime locations nationwide described trading during the past financial year as at the top end of expectations after sales at the bulk of its estate rose 4.8 per cent, driven by its residential sites and a strong appetite among its customers for eating out.

Mitchells said it was looking to boost market share next year, but said energy and regulatory bills would cause external costs to increase by between £23m and £27m, against the £18m rise predicted for this year.