Activities

Regent Inns operates several brands of late-night, entertainment-led venues in the competitive high-street market, mostly held on leaseholds.
 
It has two key brands. Walkabout Inns is an Australian-themed chain that majors in sport (the estate has more than 1,000 screens), live music and entertainment.

Jongleurs is a chain of talent and comedy clubs with attached bars under the Bar Risa or Stone House names.

Timeline

• 1977: Regent Inns is founded by David Franks (who steps down as chief executive in February 2000). By 1980 it owns and manages six pubs.
• 1983: The group sets up a joint venture with John Davy for the Jongleurs Comedy Clubs and Bar Risas, initially in Battersea and then Camden. 
• 1988: Regent Inns merges with Lockton Inns. In June, a shock profit warning slashes the share price from 388.5p to 100p. Finance director Clive Watson resigns following problems with like-for-like sales figures.
• March 1990: The company acquires 11 more pubs, increasing its estate to 36 outlets.
• April 1993: Regent Inns raises £6.5m from its flotation on the London Stock Exchange. It continues to grow in the 1990s, when it creates its Australian- and sports-themed Walkabout chain.
• 1996: The group buys the Muswells chain of café bars for £6.3m, including 11 snooker and sports bars, from Crossgate Holdings. It also takes on the management of the Unchained Pub Group’s mostly London venues until September 2002.
• March 1999: Talks between Regent Inns and SFI to merge their 85- and 55-strong pub estates are called off.
• August 2000: Regent Inns acquires the eight Jongleurs clubs outright for £7m and announces plans to focus on Walkabout and Jongleurs and sell its Discrete Estate of around 70 non-themed bars
• December 2000: The group’s shares are suspended over liquidity concerns but are readmitted to the stock market in March 2001.
• July 2001: The group pulls out of a £62m bid for Wolverhampton & Dudley’s Pitcher & Piano chain.
• June 2002: Regent Inns sells 20 unbranded pubs to Wizard Inns for £27.9m. It also opens its first Hotel@Walkabout, a 29-bedroom property in Newport, Gwent.
• October 2002: The group announces the sale of 17 unbranded pubs to Porter Black Holdings for £4.27m, which will complete its disposal programme. It has already shifted 36 non-core pubs.
• April 2003: Regent Inns completes a £7.2m sale-and-leaseback deal with St James Capital Property on Walkabouts in Portsmouth and Wolverhampton and the Hertford Stone House.
• June 2003: Porter Black goes bust and the leases of the 17 unbranded pubs revert to Regent Inns. A week later, the 18-strong Unchained Pub Group goes into administration owing Regent £1.8m in management fees.
• November 2003: Regent Inns raises £16.7m through issue of new shares to expand and pay off debt.
• April 2004: Operations director Michael Thiele departs.
• September 2004: Chief executive Stephen Haupt and finance director Simon Rowe abruptly leave following a sharp decline in like-for-like sales. Four days later the group fails to release its annual results after revealing that it has breached rules set out in its bank loans. The results, reporting a £6.6m pre-tax loss, are published the following month and the group’s shares plummet to 30p.
• October 2004: Former Scottish & Newcastle directors Bob Ivell and John Leslie are brought in to rescue the company as chief executive and finance director respectively. 
• December 2004: The group announces that it has reached agreement on revised banking facilities until March 2006, with an option to extend.
• June-July 2005: Regent Inns tables an unsolicited offer for late-night bar operator Urbium of 820p per share, which Urbium rejects as too low. In July, Urbium rejects Regent Inn’s fourth and final offer of 975p per share.
• September 2005: Regent Inns agrees a refinancing package with four leading banks. The five-year, £100m flexible debt facility has half the interest margin of the previous package.    
• December 2005: Regent Inns joins the list of firms interested in buying vodka bar operator Inventive Leisure, but loses out to Alchemy Partners.
• April 2006: Regent reveals that it has been approached by a potential buyer. In June, however, the group says it has ended takeover talks with the mystery suitor that is widely believed to be Alchemy. 
  

Financial snapshot

Full year

Turnover: £134m (2004: £128.5m)
Pre-tax profit: £5.4m (2004 -£6.6m)

Half year

Turnover: £65.8m (2004/5: £67.2m)
Pre-tax profit: £6.4m (2004/5: £1.4m)

Financial year end: 2 July 2005
Half-year end: 31 December 2005 (1 January 2005 for the preceding year)

Operating data

Total number of outlets: about 80

Number of Walkabout Inns: 48
Number of Jongleurs: 17
Number of Bar Risas: 11
Number of Stone Houses: four

Food represents 6.8% of sales

Total number of employees: 1,900

Strategy

"Whilst there has been some evidence of a change in trading patterns attributable to licensing reforms, trading conditions on the High Street have remained difficult since the beginning of the New Year.  However, Walkabout and Jongleurs remain strong, cash generative and well-run brands.

Walkabout is well positioned to benefit from sporting events in the second half including the Six Nations, Commonwealth Games and the Football World Cup. In addition, we expect to see further benefits as we start to relax many of our self-imposed trading restrictions [in the run-up to the new licensing laws that took effect in September 2005] and enjoy the results of the improvements to our beer range and service delivery quality.

The board continues to seek value-enhancing consolidation opportunities and remains confident of the group's long-term prospects."

Source: interim results statement, 7 February 2006

Key directors

Executive chairman: Bob Ivell
Chief financial officer: John Leslie
Operations director: David Turner
Commercial director: Simon Kaye

Contact

77 Muswell Hill
London
N10 3PJ

Tel: 020 8375 3000
Fax: 020 8375 3001

E-mail:
Website: http://www.regentinns.co.uk

Commentary

Regent Inns has given its shareholders three major shocks in the six years between 1998 and 2004. After revealing that the group had made a £6.6m pre-tax loss in 2004 and breached its bank covenants, Regent Inns drafted in Bob Ivell and John Leslie as trouble-shooters to shake-up or find a suitable buyer for the company.

Ivell came with a sterling pedigree, having transformed the shabby estate Scottish & Newcastle bought from Grand Metropolitan in 1992 into a prized asset of pubs, restaurants and budget hotels that he sold to the Spirit group for £2.5b in October 2003.

Both he and Leslie were shocked by the weak management controls they found, with no internal audit, no proper budgets, and no profit targets. He also found Regent was selling cheaper versions of key brands but charging premium prices.

Having addressed these problems and renegotiated the group’s banking facilities, Ivell has continued the strategy of building up the Walkabout and Jongleurs chains and flogging off the unbranded estate (although he feels this may be a mistake).

By February 2005, the share price was heading back towards 100p from a low of 10p and the group reported a pre-tax profit of £943,000 after exceptional costs of £4.3m from renegotiating bank facilities, reorganising the business and writing-off abortive acquisitions

Ivell sees especial value in the Jongleurs brand, whose unique offer better insulates it from the threats of over-competition and regulation that threaten more traditional high street bars and clubs. He has also toned down what he saw as an over-emphasis on Australian theming at Walkabout.

It seems a flog-off is far from Ivell’s mind. “There is an opportunity for consolidation in the pub market. This is not a bad vehicle for that,” Ivell told Chain Leader magazine in April 2005. The group’s subsequent bid for late-night bar operator Urbium and pursuit of vodka bar specialist Inventive Leisure highlights this ambition.