Mitchells & Butlers abandons property venture

Mitchells & Butlers (M&B) has today announced that it has abandoned plans for a property joint venture with property tycoon, Robert Tchenguiz.

M&B, owner of several brands of pubs including Harvester, Sizzling Pub Co, Toby Carvery and All Bar One, said the plans were hurt by the downward spiral in the credit markets that left little opportunity of delivering a deal that would be beneficial to shareholders.

M&B said that as late as early January, it had not foreseen further decline in the credit markets but conditions had deteriorated since then and the company had moved to cut its losses. Those total £274 million, of which £155 million of which was booked in last year’s accounts with the balance being the £119 million to be taken this year.

The group also confirmed that finance director, Karim Naffah, has left and will be succeeded by Jeremy Townsend.

Furthermore, Tim Clarke has tendered his resignation as chief executive, but this had been declined ‘as the board believes it is in the best interests of the company that he should continue to lead the operational out-performance of the business‘.

The group added that it will hire a non-executive director with expertise in the property market. A strategic review will commence but for now management will concentrate on operational performance.

The pub operator concluded that like-for-like sales had increased 0.7% over the last 17 weeks and gained market share. Shares in the group were up 1.4% to 387½p in early trading today. Just 6 months ago, shares were trading over 700p.

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