‘Disappointing' Regent Inns gives no clue to buyer
Walkabout owner Regent Inns has admitted to "disappointing sales" but gave no clue to the identity of a mystery bidder for the company.
The Old Orleans and Jongleurs owner is now considering a sale and leaseback of a selection of its freehold properties in a bid to reduce costs in a difficult trading environment.
Overall sales in the six months ending 29 December 2007 were up 4.2% to £76m but pre-tax profit slumped to £1.2m from £3.6m this time last year.
However, the comparison only includes three months of Old Orleans trading, which Regent bought in September 2006. Like-for-like sales at the group fell 3.8%.
Bob Ivell, executive chairman at Regent Inns, said the company's brands remained strong and were well positioned to take advantage of any recovery in consumer spending confidence.
"We have inevitably needed to tailor our investment programme to suit the tough trading conditions but we are continuing to invest in our brands for the long term. In addition, we have further reduced costs and are examining the opportunities for asset disposals and sale and leaseback."
Regent revealed in January that it was in "very early stage discussions" over a potential sale of the company after receiving several approaches.
Peter Backman, managing director at analysts Horizons FS, said that the quality of operators brands had become "more crucial to success" and Old Orleans, which had received £3.5m in investment, was "a brand that has been crying out for revitalisation".
"The fact it has traditionally been a drinks-led concept in a market where drinks sales are falling, makes it even tougher for Regent to modernise. Quality brands will continue to do well in this sector but any brand that is starting to look jaded will suffer the downturn more acutely."
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By Christopher Walton
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