Sports Cafe has ended offer talks with an unnamed suitor and warned the City that sales for 2006 will be below expectations.

The bar chain announced on 8 September that it had received an informal approach from a third party.

But in a statement today, the company said “it had terminated all offer related discussions”.

Sports Cafe said a weak end to 2006 had resulted in like-for-like sales, which strip out new openings, falling 1% compared with 2005. With new openings, such as Bristol, included overall group sales increased 27% year-on-year to £17.9m.

Despite this the company warned its full-year sales revenue would be below current market expectations and said it expected to record an operating loss similar to 2005’s £692,000.

Sports Cafe has already started a cost-cutting programme to streamline the business and has withdrawn from the online gaming market, which it entered in July 2005.

The company is also considering a sale-and-leaseback deal on its Birmingham site to raise cash.

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By Chris Druce

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