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Mitchells & Butlers upbeat on trading ahead of annual meeting

Like for like sales up 6.5% in nine weeks, but company faces corporate governance concerns at AGM

Mitchells & Butlers has issued an upbeat trading statement ahead of its annual meeting later which could see a clash with concerned investors.

The company – whose brands include All Bar One, Harvester and Toby Carvery – said sales in the 9 weeks to mid-January were up 6.5% on a like for like basis, helped by the improved weather over Christmas compared to the snow disruption in 2010. So sales for the first 14 weeks of the year were up 4.4%.

It warned the outlook for consumer spending remained tough, with cost pressures in food, duty and energy likely to continue. But chairman Bob Ivell said:

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 we have already made in a number of areas to re-focus the operations and improve the guest experience.

The company rejected two takeover approaches from its largest shareholder, Bahamas based currency trader billionaire Joe Lewis, last year. But Lewis has held onto his stake, and indeed has recently been edging it higher.

However two corporate governance groups have expressed concern that the company now has no non-executive directors. The Association of British Insurers has issued a red-top warning – indicating the highest level of concern – about the company, while Pirc has recommended shareholders vote against the re-election of Ron Robson and Doug McMahon, two representatives of Lewis’s investment vehicle Piedmont.

In its statement ahead of the meeting M&B said:

Good progress is being made to appoint a new chief executive officer and to strengthen the board with additional non-executive directors.

In the market M&B shares were up 0.6p at 259.2p, compared to the Lewis offer of 230p a share.

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