Laurel in talks with banks about debt

Discussions are underway between Laurel Pub Company and its banks with a view to restructuring the company's borrowing facilities.

The company made a pre-tax loss of £12.26m in the year to 25 February 2007 on a turnover of £186.8m.

In the 65-week period before, covering the period the company has been owned by Robert Tchenguiz, it had a turnover of £190m and made a pre-tax profit of £25.9m thanks to sale of freeholds for £41m.

Operating losses widened to £4.3m in the most recent year compared to £3.6m the year before.

Documents filed last month at Companies House indicate the borrowing restructure will be complete by March 2008.

Laurel reports: "Gross profit margin has decreased by 2% - 10.6% to 8.6% - due to increases in rental charge following the sale of freeholds. The operating margin has decreased slightly - minus 1.9% to minus 2.3% - with the increase in rental charges being partially offset by better efficiencies."

Since the end of the financial year, Laurel has acquired the La Tasca tapas restaurant business. It has also been investing heavily in converting sites to its Slug & Lettuce brand, with around 100 expected to open shortly.

The period covered by the latest full year saw Julian Sargeson leave as chief executive in May 2006. He was replaced by Paul Symonds who took over in September 2006, with former JD Wetherspoon commercial director Suzanne Baker arriving on the same day.

A total of £410,000 was paid in compensation for loss of office. Directors were paid a total of £639,000 in the year to 25 February.

tchenguiz's £560m High-St Spend

Robert Tchenguiz has spent around £560m excluding costs assembling Laurel. He paid £151m for the original Laurel, the high-street remnants of Whitbread, and spent £202m on buying Yates from private equity firm GI Partners, £80m on 98 sites out of SFI Group, and £124m on the La Tasca restaurant business earlier this year. The SFI Group and La Tasca are entirely leasehold while the Yates business had around 40 freeholds when it was acquired by Tchenguiz.