Insider Media Limited

Mitchells & Butlers, the pub and restaurant chain based in Birmingham, has announced it will sell the operations and leaseholds of its Hollywood Bowl business for £27m cash. The company will sell its bowling division to industry leader, AMF Bowling.

M&B is also to sell the remaining freehold property interests in four of the ten-pin bowling sites for at least £12m “in due course”.

This will value the business at £39m in total.

The restaurant chain, which employs around 16,000 people across its divisions, operates approximately 2,000 sites across the UK.

Adam Fowle, chief executive, said of the transaction: "This further disposal of non-core assets is another important step towards focusing the business on our market leading growth brands."

The transaction is expected to complete on Friday.

This latest disposal follows the lease of 52 of M&B’s properties to Travelodge last month. The budget hotelier boosted its number of UK properties to 452 following the £91m deal, which Travelodge took on a 25-year lease.

In its latest interim results, the company announced that revenue was slowing with an increase of just 1.2 per cent in the nine weeks to 17 July. This is compared with a 1.8 per cent increase in the 33 weeks to 15 May.

The company said the World Cup had a “negative impact” on food sales with overall sales down 2 per cent. And “uncertainty” remains in the outlook for discretionary expenditure.

The statement said: “There continues to be uncertainty in the outlook for discretionary expenditure and associated pressure on the UK's eating and drinking out market.

“However our core brands' effective marketing and value positioning have generated increases in sales and profitability this year.”