Regent Inns "cautious" on consumer spending

Despite Regent Inns seeing some of its units taking £80,000 a day during the current Rugby World Cup, the Walkabout operator says it expects a slowdown in consumer spending in the run up to Christmas as interest rate rises finally hit people's wallets.

However while the group said it remained "naturally cautious" regarding consumer spending, it noted that it had "strong brands and is well placed for future underlying growth".

It said it plans to roll out a further 10 Old Orleans restaurant sites in the coming year at a cost of up to £5m. Despite lease-related delays setting back its development programme, Regent said the template for the business was "sound", adding it would be investing around £250,000 per site on refurbishing existing venues.

Like-for-like sales in the 14 weeks since its 2007 year end in June had dipped one per cent, although like-for-like food sales rose 8.5 per cent. Those venue with outside space have seen sales up 2.1 per cent, the group added.

Regent, whose businesses also include the Old Orleans restaurant chain and the Jongleurs comedy café concept, said turnover for the year to June 30 2007 rose 16.7 per cent to £148.9m, although pre-tax pre- exceptional profits fell 22 per cent to £8.3m.

Underlying profit rose 28.3 per cent to £11.5m.

The group's late night businesses had seen "challenging" trading conditions during the year, with door income down 1.2 per cent and drink sales 5.7 per cent lower.

However, food sales across its entertainment venues rose 11.4 per cent, due to "daytime initiatives" such as table service and breakfast offers.

The group said it had invested £1m in smoking solutions and around 35 per cent of its venues have outside space for smokers.

Regent said it won't be paying a dividend this year as it "focuses on managing its debt and on the planned investment in Old Orleans".