Tim Clarke: 'I'm sorry for £300m hedging losses'

Mitchells & Butlers (M&B) chief executive Tim Clarke said he "very much regretted" the group's near-£300m hedging losses which resulted from the collapse of its proposed property deal with former shareholder Robert Tchenguiz last year.

Speaking on the day M&B announced its annual results, Clarke said the period when it became clear the losses were mounting was a "very unhappy time".

"In retrospect we shouldn't have taken the advice we were given," he added.

Clarke said he had no further comment to make on the affair, which hit M&B's share price dramatically last year, led to the resignation of its finance chief Karim Naffah and nearly cost Clarke his own job, other than to say that throughout the crisis the business had remained operationally on track.

Commenting on today's decision by the group to suspend dividend payments to shareholders until December 2010 at the earliest, Clarke said it had been a "very difficult one to take".

However the need to conserve cash and pay down medium-term debt by £225m to a target of below £300m within two years necessitated such a move, he said.

The situation surrounding the dividend would have been worse had the group decided to maintain payments now and couldn't fulfil its commitment to shareholders in the future, Clarke added.

And while M&B said it was reducing what it called "expansionary capital expenditure" by more than £70m in the coming year to help its finances, Clarke said the group would always look at large scale consolidation opportunities if they came up.

Asked whether he regretted the collapse of M&B's efforts to wrest Spirit Group, Punch Taverns' managed pub arm, away from its owners, Clarke said "the opportunity to add value has become all the clearer, given the work we have done with the pubs we acquired from Whitbread".

Clarke was referring to the 50 per cent-plus growth in average EBITDA across the 205 sites bought from Whitbread in 2006 which had been converted to M&B concepts.

Asked whether M&B would be likely to take another tilt at Spirit Group, Clarke declined to comment.