M&B's Families And Food A Winner

January 27, 2012, 9:21 am

Picture Credit:".flickr.com."

Pub group Mitchells and Butlers continues to forge ahead despite concerns about its future.

The company reported a 6.5 per cent rise in sales in the nine weeks Christmas trading period to January 21 which it said was helped by improved weather although trading in January has been 'more subdued'.

Like for like-sales in the first 17 weeks of the financial year were up 4.4%, with total company sales in that period up 1.3%, although this includes the impact of major disposals last year. In the retained estate, total sales over the same period were up 7.5%.

A concentration on families and good food seems to be paying dividends though not currently for shareholders.

M&B, which has All Bar One and Harvewster in its stable, currently has no chief executive and the board is down to five men following the departure of chairman Simon Burke and non-executive director Michael Balfour. Two of the board who faced shareholders in Birmingham are representatives of 26 per cent shareholder Joe Lewis whose last bid to buy the company was rejected.

The continued uncertainty created by Lewis' presence makes finding new directors difficult.

Chairman Bob Ivell insisted today that he is making 'good progress' towards appointing a new chief executive.

"These results reflect a successful Christmas sales performance. Although assisted by better weather, they show that customers are still keen to treat themselves even in a difficult economic environment.

"I am encouraged by the progress that we have already made in a number of areas to re-focus the operations and improve the guest experience. This gives me confidence in our ability to successfully develop and grow the business in the year ahead," he said.

Geof Collyer at Deutsche Bank said: "The potential for further instability reinforces our view that M&B remains pretty much uninvestible."

Paul Hickman at Peel Hunt said: "It has to negotiate organisational changes, and lacks a chief executive, and investors must also accept uncertainty on the intentions of Joe Lewis, an irregular board and the continued lack of a dividend."