M&B chief executive quits over £69m hedge loss

The chief executive of Mitchells & Butlers has resigned after the All Bar One and O'Neill's operator lost £69m on a long-term interest rate swap.

M&B, which has overall debt of £2.6b, said it had accepted Tim Clarke's resignation “with regret”, and revealed that chief operating officer Adam Fowle would take the reigns while it search for a replacement.

The £69m payment (£96m before tax) followed the embarrassing £391m loss on a joint property venture with Robert Tchenguiz that led to the departure of finance director Karim Naffah and chairman Roger Carr last year. Clarke tendered his resignation at the time, but it was rejected by the M&B board.

In a statement, M&B chairman Drummond Hall said: “The board has decided to close the residual element of the swap, most of which was dealt with in January 2008. A new facility has been negotiated to provide additional headroom and the company’s financial position is sound.

“In these circumstances, it is with great regret that the board has accepted the resignation of Tim Clarke. He has been the architect of the company’s success since it was created in 2003 and we are grateful for his outstanding contribution.”

Clarke’s departure was announced as M&B revealed that pre-tax profits plummeted by 48% for the six months to 11 April to £44m (2008: £84m).

But while February had been poor due to the effects of heavy snow, M&B said March was much improved and that a late Easter and warmer weather had made for a strong April.

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By Daniel Thomas

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