Oct. 9 - Regent Inns plc (“Regent” or “the Group”), the operator of Entertainment Bars and branded Restaurants in the UK, today announces its results for the 52 weeks ended 30 June 2007. During the year under review, and in line with its strategy to broaden its earnings base, the Group acquired 31 themed Old Orleans restaurants. Regent's core brands in Entertainment Bars are Walkabout, Jongleurs, and Bar Risa.
Financial highlights:
Continuing operations
• Turnover of £148.9m increased by 16.7% (2006: £127.6m), including 41 weeks’ contribution from the acquired Old Orleans business
• Like-for-like sales down by 2.8%, reflecting the impact of the 2006 FIFA World Cup, a difficult trading environment in April and May, and the five month period to the anniversary of licensing deregulation
• EBITDA before exceptional items £24.1m (2006: £24.5m)
• Profit before tax £6.1m, up 23.5% (2006: £5.0m)
• Profit before tax excluding exceptionals £8.3m (2006: £10.6m)
• Earnings per share 6.0p, up 67% (2006: 3.6p)
• Earnings per share excluding exceptionals 7.5p (2006: 7.7p)
• Exceptionals £2.2m (2006: £5.6m) mainly relating to integration costs for Old Orleans and corporate restructuring costs.
Total Company
• Operating cash flow £24.4m, up 5.8% (2006: £23.1m)
• Net debt increased by £17.9m to £74.9m reflecting the £27.4m acquisition of Old Orleans for debt
• The Board is not recommending a dividend (2006: nil) as the Group remains focused on managing its debt and on the planned investment in Old Orleans.
Corporate progress:
• The acquisition of Old Orleans marked an important strategic development, establishing a presence in the attractive eating-out market and broadening the Group’s earnings base
• An extensive Restaurant refurbishment programme started towards the end of the period - a third of the estate is now refurbished
• Thurrock Old Orleans re-opened after a major investment just before year-end; refurbishments completed at a further nine Old Orleans venues; the Old Orleans brand has significant roll out potential
• Continuing investment in Entertainment Bars is designed to maintain Walkabout as the leading venue for sport and music, and Jongleurs as the country’s leading comedy venues
• £1m invested in preparations for the smoking ban which came into effect on 1 July 2007 ensuring the provision of attractive outdoor trading areas for all customers and good facilities for smokers.
Current trading and prospects
• LFL sales in the 14 weeks to 6 October 2007 were down by 1.0%. LFL Food sales have enjoyed an increase of 8.5%, and venues with outside areas have performed more strongly, up 2.1% on last year
• The Group plans to refurbish another 10 Old Orleans venues before the financial year end, investing £4m-£5m in total on Old Orleans refurbishments in the year. The Board is confident these investments will deliver good growth in an attractive market segment
• Corporate activity remains a priority and the Board is confident that the business is well placed to deliver value through consolidation.
Commenting on the results, Bob Ivell, Executive Chairman of Regent Inns, said:
“Our businesses have generally coped well with difficult trading conditions in the important summer months, especially given the high benchmarks set by last year’s FIFA World Cup.
“Most importantly, the Board is pleased to have acquired Old Orleans and with it a branded Restaurant group with excellent growth prospects. This business provides a good platform on which we can now build. We are also very pleased with the customer response to the refurbishments and re-openings to date.
“We are naturally cautious about the outlook and environment for consumer spending, but Regent’s strong brands are well placed for underlying future growth and we continue to invest in achieving that.”