Regent Inns warns on its future
Regent Inns, the troubled operator of Walkabout, Old Orleans and Jongleurs, this morning warned that the uncertainty of its trading position could affect its ability to operate as a going concern.
Announcing its half year results for the 26 weeks to 27 December, Regent said that like-for-like sales had fallen by 12.2%.
Sales dropped to £67.6m from £77.1m in 2007, but the group said that it was continuing to trade within the terms of its committed banking facilities.
However it added: "Reporting formalities demand that we must point out that the fragility of consumer confidence is possibly such that there is an associated material uncertainty over the group's future performance, which may impact the group's ability to operate within the terms of its committed banking facilities and therefore continue as a going concern."
On top of the decline in beer sales, smoking ban, increased duty and recession, Regent said that there was a risk that some of the 82 leasehold properties that it had either assigned or sublet in the past few years would return to the group because of rental defaults.
In the past half year three properties had already returned to the group, it said. Two of which were as a result of the Food and Drink Group going into administration.
Operating profit at the group was £1.3m for the period — down from £4m in 2007.
Regent added that it had surrendered a loss-making Old Orleans in Ealing to its landlord and also sub-let the loss making Cathedral Hotel in Salisbury.
It also reduced debt from £78.9m to £78.4m and was in the process of disposing of a number of non-core assets in a difficult market.
Jim Glover, non-executive chairman, said: "Market conditions facing the sector have been very challenging. However, we have successfully managed cash flow, made progress with operational restructuring and, despite very difficult circumstances, reduced net debt during the period.
"Like-for-like sales in the first 8 weeks of the second half were 11.7% below last year continuing recent trends despite the very difficult weather conditions experienced across the country in the first half of February. We remain cautious about the future and
continue to find current market conditions very challenging."
