UK: Mitchells & Butlers head resigns on net losses

The chief executive of UK pub group Mitchells & Butlers, Tim Clarke, has resigned following losses on the company's financial hedging strategy.

Mitchells & Butlers said yesterday (21 May) that its board has accepted Clarke's resignation, with chief operating officer Adam Fowle replacing him on an interim basis.

Clarke has led the firm in its several different forms for 14 years. 

Mitchells & Butlers (M&B) said in its first half-year results yesterday that it has written down a loss of GBP69m on an interest rate swap, related to a property venture with Robert Tchenguiz in 2007. The group has previously written down GBP386m in losses from the venture, which has since been heavily criticised by analysts.

M&B reported net losses of GBP6m for the 28 weeks to 11 April, compared to net losses of GBP87m in the same period of last year. Underlying net profits, exlcuding exceptional items, fell to GBP32m, down from GBP60m last year.

Net sales for the period crept up to just over GBP1bn, from GBP995m in 2008.

The firm, which owns the All Bar One and Harvester pub chains, said: "The outlook for consumer spending looks set to remain weak for the rest of 2009.

"In our markets, we have recently been seeing some signs of slowing in the previous rates of decline. However, customers remain cautious and value sensitive and any recovery prospects from improved levels of disposable income appear to be being offset by rising levels of unemployment."