Regent cuts dividend as tough trading continues

Regents Inns is cutting its annual dividend to shareholders as it continues to find the town centre market tough going.

Despite two profit warnings since last December, until now the company had been sticking to a dividend forecast in line with last year's 3.36p a share.

However, in the face of what Regent said are "underlying difficult market conditions", the board is reducing its recommended dividend to 1.68p.

As it approaches its financial year end, the operator of the Walkabout and Bar Risa/Jongleur chains, said it had seen a boost from the Euro 2004 tournament which helped the company meet full year profit targets.

However, Regent said the upturn from the football, which benefited Walkabout in particular, has 'masked' the true trading picture.

Like-for-like sales in the six weeks running up to the start of Euro 2004 declined by 3.5 per cent, itself an improvement on previously reported figures. That jumped to 15.2 per cent like-for-like sales growth during the tournament itself, coinciding with the last three weeks of Regent's financial year.

The company said that ongoing pricing and promotional activity in Walkabout has hit profits. However, restoring sales stability to the chain is a 'priority' for the year ahead, prompting Regent to invest in a new programme of marketing activity as well as "some modest capital expenditure".

Disposals of unbranded bars has continued, with 14 now sold and six exchanged or under offer, leaving three to be sold.

Regent said: "Overall trading conditions on the High Street remain difficult to predict adding uncertainty to the process of forecasting a future earnings pattern."