Premium's new openings on hold

Premium Bars and Restaurants has put the opening of new Living Room sites on hold as it "hunkers down" in the face of ferocious market conditions.

Executive chairman Mark Jones said: "Small companies are facing a very tough 12 months. It's ferocious out there, with every cost rising. We plan to hunker down and conserve cash. We would rather pay off debt than open new sites."

Jones, who has given his board 12 months' notice of his intention to leave, said that sales at Living Room and other venues are down 7.4% as consumers cut down on nights out.

"There is some growth at weekends, but between Monday and Thursday people are not going out, and if they are they're buying a £15 bottle of wine rather than a £20 bottle of wine. We had an extremely positive Christmas, but we ran into a brick wall around Easter."

Sales at Premium for the year ended 30 June were up 79.8% to £66m after the acquisition of Living Room, with a loss before tax of £900,000.

Analyst Paul Hickman, of KBC Peel Hunt, who forecast a £800,000 pre-tax profit for the coming financial year, said: "Premium is by no means devoid of asset value, although it has written down its predominantly freehold property by £18m to £54m, compared with our February estimate of £60m and a 2006 valuation of £80m. Merely the property, net of debt, would value the business at £14m, or 35p per share."

Jones's decision to give 12 months' notice is believed to be linked to the disappearance of Dawnay Day from the company's share register in the wake of its implosion a few months ago — he was Dawnay Day's appointment