Regent Inns says banks "remain supportive

Walkabout operator Regent Inns said today it had the full support of its banks despite being forced admit there was "material uncertainty" over the group's future.

"We have banking covenants that are fit for purpose and our banks are very supportive; we don't have to ask them for anything and we have sufficient headroom [for the group's needs]," said Regent chief executive John Leslie.

Leslie said "reporting formalities" required that given the "fragility of consumer confidence" it had to warn there was uncertainty about the group's future trading performance.

"Lots of companies are having to do this." Leslie added.

Regent announced first half results today which showed turnover down 12 per cent to £67.6m, while operating profits slumped 68 per cent to £1.3m.

Leslie said the slide in sales in the 26 weeks to December 27, 2008, came as little surprise.

"We recognised that trading would be very tough a while ago and so it has been. But we've taken a lot of cost out of the business, reduced capex and managed our cash flow very tightly," he said.

Regent reduced staff numbers at its head office by a third last year - 30 employees - and disposed of a number of non-core sites.

While operating cash flow fell by 65 per cent to £2.4m, Leslie said the group's net debt was down £500,000 to £78.4m.

Leslie admitted that footfall across the group's late night venues was significantly down, although some Walkabout venues were "trading very strongly".

Last year Regent had sought a number of sale and leaseback deals on some of its Walkabout sites but these fell through as the effect of the credit crunch on property deals made its presence felt.

Regent's comedy venues, Jongleurs, had had a disappointing Christmas, Leslie added.

He said the group's Old Orleans restaurant business was "holding up well", although he admitted that poorer performing units were hampering progress across the brand.

Regent's shares fell by nearly a third, albeit to 1.9p.