Po Na Na takes £6.6m property hit
Shares in late-night bar and club operator Po Na Na fell to a fresh low yesterday after property write-downs set the company £5.3m into the red.
Shares dropped to 57.5p.
The heavy hit came from the sale of non-core assets. The disposals were a result of units acquired from Luminar.
"We have taken hard decisions this year to close and sell non-core units," said chief executive Christian Arden.
"Most of the closures came from the Luminar deal - a few units have worked very well, a few have not."
Mr Arden said the decision to take the write-downs this year was "very prudent". He said with that exceptional cost out of the way the next 12 months should be a straightforward process of continued expansion in the key cities around the country.
"Our main focus is the university towns," he said. "They are bread and butter of Po Na Na."
It now has 38 Po Na Na and Fez clubs, and a further seven stand-alone nightclubs. The company has recently opened units in Chelsea and Salisbury.
"We plan to take growth down to about four, high-quality units a year. That may not please everyone in the City but we feel a lot of that sentiment is already reflected in the share-price.
"We have a good niche in the market and we will protect that."
Mr Arden said the underlying business was performing well with operating profits, before exceptional items, of £2.12m on sales up 17 per cent to £35.2m.
Group debt is £7.3m - representing gearing of 57 per cent.
Group finance director Tim Andrews is to leave the company to take the financial reins at SFI Group. Clive James will fill the vacancy.
Mr Arden said recent weeks have been overshadowed by the sudden and tragic death of Gary Hutchinson, the group's operations director. "Gary played a key part in helping to build Po Na Na and will be sadly missed," he said.
