UK: Disposals to affect results at Regent Inns
The UK pub operator, Regent Inns Plc, has said that its results for the coming year would be below market forecasts having been adversely affected by the sale of unbranded pubs and higher insurance costs.
The company's shares, which have lagged behind the average for the UK leisure sector by 17% over the past year, fell 4.1% on the announcement.
At the same time, Regent Inns also announced the sale of 20 pubs from its Discrete Estate unbranded pub chain to the independent pub operator, Wizard Inns Ltd., for £27.9m. Regent said this sale would yield an exceptional profit but the planned sale of a further 25 of the remaining unbranded pubs would result in an overall exceptional loss.
The profit warning comes at the end of a difficult 12 months for the company. It made a failed bid for Wolverhampton & Dudley's Pitcher & Piano chain and a reduction in the tourist business following September 11 has impacted on sales.
However, Regent Inns said it expected its fortunes to improve as it developed its Australian-themed Walkabout bars, Bar Risa/Jongleurs comedy clubs, and "boy-meets-girl" PALs bars.
It said the Walkabout bars in particular were currently enjoying record trading spurred by the World Cup. Like-for-like sales for the 50 weeks to June 15 were up by 3.8%, with Walkabout sales 10.9% higher.
Analysts have forecast a £16.5m pre-tax profit for Regent for this fiscal year and a pre-tax profit of £19.4m for the coming year.
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