All Bar One owner Mitchells & Butlers said today it would switch to tax-efficient REIT status as part of attempts to revive its fortunes.

The move will see the company, which also owns O'Neills and Harvester, spin off its property assets into a separate business "when conditions permit". Real Estate Investment Trusts enable firms to unlock potential value and increase dividend payouts to shareholders.

The plan emerged as M&B reported a 5.6% drop in pre-tax profits in the six months to April 12 to £84 million on flat sales of £995 million. It said same-outlet food sales were up 5.1%, with the decline in drinks limited to 1.5%.

Trading in the first four weeks of the second half of the financial year showed like-for-like sales up 3.4%. While Mitchells said it was too early to draw any conclusions from the short trading period, it said it had seen a "good customer response" to the launch of its new summer menus.

Unveiling the results of a strategic review, Mitchells said it believed it was well-placed to lead growth in the eating-out market. It is actively exploring opportunities for deals in the managed pub sector, as well as working with private equity firms on the funding of potential deals.

At the same time, it will look to realise the value of its estate through individual site sales and smaller package transactions. Such "gold brick" properties often carry strong redevelopment potential.

Mitchells is looking to revive its fortunes after a failed property deal last year left the group with a £274 million loss.

It has also had to trim aims for a full blown sale to private equity as the credit crunch has left buyout firms lacking in funding, but M&B is persisting with the possibility of selling a minority stake. Last month it said it was in discussions over the sale of up to 29.9% to private equity at a "material premium" to its current price.

The company added today it had agreed to appoint two new board members to represent leading shareholder Robert Tchenguiz.