Pub operators face a horrible 2012 as their costs and taxes rise, while their hard-pressed customers spend less. These challenges are even more worrying for a company in the throes of a strategic overhaul and management seemingly in a state of perpetual revolution. The company in question is Mitchells & Butlers (M&B), whose shares we tipped as a buy in brighter times (325p, 28 October 2010). However, things look very different now.
- Reputation as quality pubs operator
- Has some strong brands
- Management upheaval
- Strategic uncertainty
- Piedmont's shareholding
- Worrying outlook for consumers and costs
The revolving door in the boardroom, thanks largely to the presence of 23 per cent shareholder Piedmont, a vehicle controlled by billionaire investor, Joe Lewis. Since last month, M&B is run by Bob Ivell, who moved from being interim chairman to executive chairman following the departure of interim chief executive, Jeremy Blood. In turn Mr Ivell has now overhauled management internally. The idea is to stream line operationsand cut costs, but this nevertheless represents yet more disruption and the loss of some very experienced hands.