Reuben brothers gain 25% stake in Ultimate

The Reuben brothers are believed to have built a 25% stake in north-east nightclub and bar company Ultimate Leisure.

David and Simon Reuben hold their sizeable stake in Ultimate through so-called contracts-for-difference, a device that allows owners to retain anonymity.

The brothers acquired the vast majority of their stake last summer - when former chairman Alan Rankin and his brothers were selling their stakes in the business.

The pair, who made a large part of their fortune through property investments, are believed to be attracted to the large amount of freehold property owned by Ultimate.

The brothers have been active investors in the pub market in the past two years.

In March 2004, they part-nered West Coast Capital and Prestbury in buying and leasing back 220 Spirit pubs for £500m. In August 2004, the Reubens snapped up the Wellington Pub Company from Sun Capital and Hugh Osmond.

Wellington has 840 tenanted pubs, mainly in the south-east of England, and is believed to be the UK's largest free-of-tie estate.

Ultimate revealed, in an otherwise downbeat trading statement, that its freeholds were worth £80m - a whole £14m more than the previous book value.

Ultimate admitted some of its nightclubs had seen a "substantial reduction in sales and door income" over the Christmas and New Year period because of significant new competition.

Trading at nightclub sites in Belfast and Cork was described as just "OK".

However, business at the Prohibition brand and the Destiny club in Glasgow was said to be "encouraging".

Chairman Mark Jones said: "Ultimate has a number of short-term performance issues that are taking longer to tackle than I thought.

"I believe we will be making headway by Christmas."

Ultimate's broker is forecasting £1.6m profits, much lower than previous expectations of £5m.