Mitchells & Butlers sales better than forecast

Restaurants and pubs group Mitchells & Butlers reported a better than expected first quarter sales rise, benefiting from milder weather over the Christmas and New Year period and strong demand for casual dining.

The company, whose chains include Harvester, Toby Carvery and All Bar One, said it was confident of further growth in the year ahead.

M&B said sales at restaurants and pubs open more than a year grew by 4.4 per cent in the 17 weeks to 21 January

Market expectations had ranged between growth of 2 per cent and 3.5 per cent, with the average forecast standing at 2.6 perVcent, according to a Reuters poll of five analysts.

The firm said like-for-like sales were up 6.5 perVcent in the nine weeks to January 21.

M&B, which has around 1,600 restaurants and pubs across Britain, said trading in January had been more subdued but consistent with the underlying like-for-like sales trend first noted in July last year of around 1 percent growth.

The group was the subject of two rejected bid approaches from its biggest shareholder, billionaire currency trader Joe Lewis, last year. Lewis, who holds a stake of over 25 per cent, aborted a 230 pence per share offer, valuing the business at around £940m in October.

Under takeover rules, he is prohibited from making another approach until April this year.

M&B has been the subject of boardroom upheaval, having gone through six chairmen over the past two years and has been without a permanent chief executive since Adam Fowle departed last March.

Industry veteran Bob Ivell, a former managing director of Scottish & Newcastle's managed pubs division, is currently acting as executive chairman and leading the search for a new


The firm, whose annual shareholder meeting takes place later Thursday in Birmingham, said good progress was being made to appoint a new CEO and to strengthen the board with additional non-executive directors.

However, the Association of British Insurers (ABI), which represents about 20 per cent of M&B's shareholders, has issued a 'red top' alert on the company, its strongest possible warning about governance concerns, singling it out as the only FTSE-350 firm which currently has no independent non-executive directors.

British corporate governance watchdog PIRC, which advises institutional investors, has called on its members to vote against the re-election of non-executives Doug Evans and Douglas McMahon, representatives of Lewis, who also owns Premier League soccer club Tottenham Hotspur.