R20 staffers to join M&B

Mitchells & Butlers has agreed to offer two non-executive positions on its board to R20, the investment vehicle of Robert Tchenguiz, who owns a 27% stake in the business.

The appointment of R20's Tim Smalley and Aaron Brown comes as M&B also confirmed its interest in converting to a tax-efficient real estate investment trust (Reit).

The arrival of two R20 staffers on M&B's board will be seen as absolute confirmation that M&B intends to release the property value of its freehold pub estate as soon as market conditions allow.

Mark Brumby, analyst at Blue Oar Securities, said: "M&B would appear to be putting into practice what its predominantly short-term, property-based shareholders want — the theory being that a "property solution" should provide an exit route via a higher share price.

"While R20's contracts for difference do not vote, the appointment of two R20 representatives to the Board does put a question mark over the influences that may be brought to bear on the group going forward.

"Good trading is very helpful, but some may consider that an investment in the group's shares should now be driven by property (and interest rate/property yield) considerations, rather than its prospects for trading."

M&B reported market- share gains, with food sales up 5.1% while drinks decline was limited to 1.5% in the 28 weeks to 12 April.

M&B chief executive Tim Clarke said its Pub & Carvery brand was one of its "star performers" with the number of sites now up to 93 — and likely to reach 100 by the year-end. The Vintage Inns brand had also seen "sustained improvement" since menu quality was improved last November.

Profit before tax was down £5.6m to £84m on turnover of £995m.