Mitchells & Butlers, the pubs business that owns the Harvester, Toby Carvery and All Bar One chains, has called time on chief executive Alistair Darby after a washout summer prompted it to caution over profits.
Darby, pictured below, will leave the group this weekend with a year’s salary of £543,500 as a payout, but is unlikely to receive an annual bonus, with performance targets not expected to be achieved.
He will be replaced by Phil Urban, who joined the company as chief operating officer in January from Grosvenor Casinos, and previously ran Whitbread’s pub restaurants division. His salary will be £510,000.
Mitchells said yesterday that like-for-like sales were up 1 per cent in the 50 weeks to 12 September, although dipping 0.7 per cent in the final seven weeks.
The group, whose pub estate includes famous Edinburgh watering holes Deacon Brodies and the Sheep Heid, said: “The UK eating and drinking out market has been subdued in the summer, leading to a slight slowdown in the rate of sales growth, exacerbated by the wet weather.”
It added that results for the year to 26 September were expected to show growth on last year “although, on the basis of this recent trading, to be at the bottom end of the range of current market expectations”.
Mitchells said that despite the slow market it was “confident in our ability to meet the challenges of high consumer expectations and forthcoming cost pressures”.
Food like-for-like sales were up by 2.1 per cent in the 50-week period, though down by 0.2 per cent over the summer. Drink sales were 1.4 per cent lower in the most recent seven weeks.
Darby leaves on Saturday after three years in the role, having been appointed chief executive in October 2012.
His tenure has been challenging, with profits last year falling 13.4 per cent to £123 million.
Chairman Bob Ivell said: “The non-executive directors have considered the issue of the leadership of M&B very carefully and are delighted to announce Phil’s appointment.
“The board recognises the significant contribution made by Alistair as chief executive over the past three years, is grateful to him for bringing the business to a stronger position and wishes him well in the future.”
Cenkos analyst Simon French said: “The change would suggest the board [and the principal shareholders] are unhappy at the speed of change within the business as evidenced by the accompanying trading update.”
Mitchells operates some 1,700 restaurants and pubs in the UK under brands that also include Browns and O’Neill’s. It employs more than 43,000 people.
Yesterday’s update means that the group’s operating profits for the year are likely to come in at the bottom end of analysts’ expectations of between £328m and £338m.
This would still be an increase on the 2013-14 figure of £313m for operating profit before exceptional items.