Mitchells & Butlers posted a fall in full-year sales even though the pub group said business has picked up in recent weeks due to warmer weather. It said total sales fell by 0.8% in the first 51 weeks to 17 September, although the business added like-for-like sales lifted 1.8% in final eight weeks of that period.
Mitchells, which owns 1,700 pubs and restaurants under such brands as Harvester, All Bar One and O'Neill's, reiterated its margins will be below last year as a result of investment in its estate and the introduction of the national living wage in the second half of the year.
The FTSE 250 firm said it generated good sales growth from upgraded outlets and has converted or remodelled 244 sites and opened seven new venues so far this year.
Chief executive Phil Urban said: "We are encouraged by our improved trading performance in recent months.
"Weather in recent weeks has certainly been helpful to sales, but in addition we are starting to benefit from increased investment activity, instilling a commercial culture and a faster pace of execution and innovation in our business."
However, the Birmingham-based chain warned that higher labour costs will continue to cause "headwinds" in its new financial year.
Analysts at Panmure Gordon expect the firm to report a full-year pre-tax profit of £179m ($234m, €208m), a 2.7% fall compared to a year ago.