Companies: REG   

The new management, in the guise of ex-Scottish & Newcastle bosses Bob Ivell and John Leslie, who were called in to revive this ailing late night entertainment-led bar operator, have made progress but much remains to be done. At the interim stage to January, turnover increased 5.7% but pre-tax profits dropped dramatically from £6.7m to £943,000. £1.9m of Regent's £4.3m exceptional charges was related to the cost of renegotiating its banking facilities after it breached its loan position. £1.6m went towards the reorganisation of the business, which includes 27 head office redundancies. This should help save £1.5m annually. Admitting increased cost pressures for the business, where it had to go on the offensive by heavy marketing and competitively pricing drinks in off-peak hours to attract the punters, the company's endeavours are paying off as like-for-like sales were up 2.5% at its branded operations Walkabout and Bar Risa/Jongleurs. Cash generation improved 11.1% to £12.7m over the period. Regent disposed of three out of nine unbranded sites and closed two Walkabout venues. Further disposals could occur. To strengthen the management team two new directors David Turner and Simon Kaye, both from large bar chain operators, were appointed. Debt is still high, but was reduced by £8.4m to £62.7m since last July. While much has been done to bolster the company's precarious position, it remains ripe for a takeover. But with a prospective p/e of 14.6, the shares, which rose 135% in three months are still not worth buying. Avoid.