Managed house giant Mitchells & Butlers (M&B) finally published its eagerly awaited strategic review on 20 May, and gave itself a broadly positive report.
The group reported a small increase in like-for-like sales across most segments of its estate, although it did acknowledge significant pressures on "circuit" venues.
This mirrors other operators' reports of tough trading conditions in the high- street/late-night sectors.
From the City's perspective, and that of many observers, the most interesting part of the report was the announcement that the company would pursue a conversion to a real estate investment trust (Reit), or similar propco/opco structure, when market conditions permitted.
The decision to pursue this strategy was undoubtedly driven by pressure from one of M&B's major shareholders, Robert Tchenguiz.
As an acknowledgement of this major influence, M&B has appointed two members of R20, Mr Tchenguiz's investment company, as non-executive directors.
In reality, these appointments were the review's only real surprise. We have no doubt that Tim Smalley and Aaron Brown, with their significant property expertise, will have a strong influence on the future direction of M&B, which remains the UK's largest operator of managed pubs and restaurants.
M&B's decision to become a Reit follows hot on the heels of Enterprise Inns' announcement that it has received the green light from HM Revenue & Customs to pursue a conversion to a Reit. We think it's almost certain that other companies in the sector will follow suit and head down the Reit track.
It is likely to be several months before global financial markets recover to the point where conditions are right to make the conversion to a Reit. However, when the situation does improve — most probably in the last quarter of 2008 — we would expect to see the beginning of a structural change in ownership of UK pubs, bars and restaurants.
M&B has also announced that it will consider selling non-core assets (hotels, bowling centres and its European bar chain, Alex) as well as extracting value from "gold-brick" sites.
This last option will be less attractive in today's tough residential market than it would have been 12 months ago, but it still serves to emphasise the high quality of assets within the M&B estate.