Honeycombe to raise £10m after profits fall

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Honeycombe Leisure is in "advanced talks" to sell some of its bars and pubs to raise £10m.The cash will be used to pay back some of the borrowings...

Honeycombe Leisure is in "advanced talks" to sell some of its bars and pubs to raise £10m.

The cash will be used to pay back some of the borrowings it needed for its £32m takeover of pub operator Devonshire Group.

Honeycombe's investment in its estate led to a 42 per cent drop in pre-tax profits to £1.15m for the year to April 29, although turnover soared by 47 per cent to £21m.

Over the year, it spent £9.68m on refurbishing new and existing outlets, which led to 100 trading weeks being lost while the pubs and bars were closed.

But chairman Sandy Anderson said it would be back on track for growth once the investments started to pay off.

"The trading environment remains competitive, but I believe the acquisition of Devonshire and subsequent management actions have considerably strengthened the company.

"We now have an improved portfolio of pubs, greater depth of management, better IT and EPoS systems and a lower cost base."

Like-for-like sales over the year were up by two per cent, and this has remained at the same level in May and June.

Mr Anderson said eight pubs were being hit by the foot-and-mouth crisis.

After integrating the 35-strong Devonshire and another 10 individual sites, Honeycombe is now looking for more acquisitions.

"We had placed our individual sites acquisitions on hold while we integrated the Devonshire estate, but we now feel that we are in a position to consider any exceptional opportunities that may arise," Mr Anderson said.

Honeycombe, which is based in Preston, Lancashire, has 45 bars and 43 inns after selling its Biba bar in Concert Square in Liverpool city centre for £600,000 to a developer.

Related stories:

Devonshire sold to Honeycombe (March 14, 2001)

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