Pubs group Mitchells & Butlers today bowed to pressure from property tycoon Robert Tchenguiz, agreeing to put his representatives on the board and shake-up the business in line with his wishes.

Tchenguiz has been pushing for M&B to split its property and pub interests for some time. After a strategic review, M&B said it will turn the company into a real estate investment trust (Reit) "when market conditions are right", allowing investors to benefit from the value of its property and cutting its tax bill.

Tim Smalley and Aaron Brown, two Tchenguiz advisers, will join the board of M&B.

In the six months to 12 April, M&B sales were £995 million - the same as a year ago. Like-for-like sales rose 0.8%.

Given the difficulties in the pub sector this is seen as a good result, and a further indication that pubs that serve food are best placed to survive the downturn.

Chief executive Tim Clarke said: "Pubs which have modernised themselves and have a strong food offer are pulling away from the rest. Our results show the strength of the casual dining market."

M&B owns the All Bar One and O'Neill's chains, pubs centred on the High Street which serve food all day.

Profits dipped £5 million to £84 million, but the divided is lifted 7% to 4.55p a share.

Clarke earlier offered to resign following a disastrous bond deal that resulted in a loss of £390 million.

His long-term position remains in doubt, but today's numbers may calm the ire of investors.

Tchenguiz, who owns 27% of the stock, is nursing losses on most of his big investments and badly needs a good result from M&B.

M&B had tentative merger talks with Punch Taverns last year. It admits that further consolidation in the industry is inevitable and that it is likely to dispose of some pubs this year.

Drummond Hall replaces Roger Carr as chairman on 20 June.