The soap opera that is the pub group Mitchells & Butlers (M&B) continued yesterday, as it named its fifth new chairman in just over three years, following the decision by Simon Burke to step down after less than six months.
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M&B, which operates the Harvester and Toby Carvery chains, moved to fill the gap by making board member Bob Ivell – a veteran of the food and beverage sector – interim non-executive chairman, while it seeks to appoint a permanent chairman.
But the departure of Mr Burke – who is thought to have quit for personal reasons and will not receive a pay-off – comes at a time when the group is also looking for a new chief executive. In March, M&B made board member Jeremy Blood its interim chief executive after parting company with Adam Fowle.
In the latest turn of the revolving doors at its Birmingham head office yesterday, M&B also said that Michael Balfour has "decided to step down" as a non-executive director of the company.
In further developments, the managed pubs group has made Ron Robson – a board representative of Piedmont, the investment vehicle of Joe Lewis, which has a 22.3 per cent stake in M&B – non-executive deputy chairman.
City analysts expressed deep concerns at the "latest round of musical chairs" at M&B.
Jeffrey Harwood, at Oriel Securities, said: "It is an extraordinary turn of events. I think it is a very disappointing development for shareholders, as Simon Burke had only been chairman since February. It is a shame because there is a very good business within the company. But institutional shareholders are dismayed by the constant resignations at board level."
While the exact reasons behind Mr Burke's departure are unclear and Piedmont in effect put him on the board in January 2010, speculation focused on whether there had been disagreements over strategy with its major shareholders.
In addition to Piedmont, Elpida – the investment vehicle of the Irish racing tycoons John Magnier and JP McManus – holds 20.1 per cent of M&B.
Mr Harwood said: "We believe it boils down to disagreements between the board and the major shareholders."
Paul Hickman, an analyst at Peel Hunt was also unimpressed by the latest instability and slapped a sell recommendation on its shares.
For the 28 weeks to 9 April, pre-tax profits at M&B tumbled by 41 per cent to £43m, partly due to it selling off hundreds of pubs and investing heavily in pub estate. However, its sales rose by 4.2 per cent over the period, boosted by a 7.5 per cent surge in food sales – which overtook drink revenues for the first time. Shares in Mitchells & Butlers fell by 10.6p to 295p.