A leading sector analyst has said that there is a fear that destabilisation caused by the boardroom changes at Mitchells & Butlers (M&B) could ultimately lead to a “demoralised workforce, with consequent operational underperformance”. Simon French at Numis Securities said: “The group's biggest challenge is retaining chairmen and chief executives; yesterday's resignation of Simon Burke and the appointment of Bob Ivell as interim chairman makes the latter the sixth chairman in three years. “Similarly, we await news on whether Jeremy Blood will be appointed as permanent chief executive. Our greatest fear is that this destabilisation at the top of the company will ultimately lead to a demoralised workforce, with consequent operational underperformance.” M&B will issue a trading update on 21 July and French said he expected the report “robust” trading for the nine weeks to 16 July, with like-for-like sales growth of 3%. He said that its comparatives over June and July woukd be helped by last year's football World Cup, which reduced like-for-like sales by 2%. French said: “We forecast £304.6m EBIT in the current year, compared to consensus expectations of £301.3m. However, in FY 2012E, energy costs are likely to rise c£10m and food cost inflation likely to increase to c3-4%. We assume dividend payments are reintroduced in FY 2012E, with a c40% payout ratio. “The stock is not expensive, trading on a CY 2011E P/E of 9.7x and an adj EV/EBITDAR of 7.4x, however, with the dividend yet to be restored, another change of chairman announced yesterday, a permanent chief executive yet to be appointed and a tightly held share register, we reiterate our Hold recommendation and 340p price target.”