London Town reports losses of £5.2m
Tenanted pub operator London Town has reported a loss of £5.2m for the six months to 30 June reflecting "difficult trading conditions”.
The group, which runs 205 tenanted and 61 managed pubs, reported that revenues had increased to £13.3m —up from £5.6m last year —due to the acquisition of 60 pubs from GRS Inns in January.
Earnings Before Interest, Tax, Depreciation and Amoritisation (EBITDA) in the leased estate was down to £2.1m from £2.5m on last year as a result of a number of closures, disposals or transfers to the managed estate. There has also been an overall reduction in barrelage at the pubs. The managed estate broke even at EBITDA level for the first half.
Staff overheads grew to £1.4m from £0.6m due to an increase in operational and support staff.
The company has obtained a short term loan of £1.4m from Burac Invest and a further £0.6m from Robar. The loans are to be used for general working capital purposes and are repayable with interest at 15% by 25 March 2009. There is no penalty for early repayment.
London Town said one of its key focuses for the second half would be licensee recruitment and retention. “The market for good people remains competitive,” it said.
It added: “Current trading remains in line with expectations in what is a challenging market place for the pub industry.”
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