Leading analyst Nick Batram at Peel Hunt has said that top-line progress at Mitchells & Butlers (M&B) has been slower than hoped, but the platform is now in place to drive through an improvement in revenues.

Batram said: “M&B’s relatively pedestrian top line has been a little frustrating and there is still much to be done. It is also fair to say that others with more consistent track records in the restaurant space trade on deservedly higher multiples. However, M&B’s re-rating potential is real and 2015 could be the year that it finally comes through.

“This is based upon the potential return to the dividend list, infrastructure and cultural improvements finally coming through, and the removal of the short-term pension uncertainty. A good January trading statement could be an early catalyst.”

Batram said that slow top-line progress, lack of income and pension uncertainty have held back the shares.

He said: “However, the pension issue has been clarified, a dividend looks a real possibility in the current year, and the platform is in place to drive the long-awaited top-line growth.

“The shares are trading c12% below our fair value and this, combined with the potential for a return to dividend payments, warrants a move from Hold to Buy. Meanwhile, a prospective EV/EBITDA of 7.5x looks undemanding and provides room for a useful re-rating.”