Companies: REG   

Regent, operator of the Walkabout sports bars and Jongleurs comedy clubs, has been busy since new management took over in October 2004. The estate has been reviewed, repositioned and refurbished and a failed acquisition of Urbium last year leaves the consolidation-hungry board unsated. In that regard, fully listed Regent is maintaining an ‘active pursuit’ of acquisitions. Executive chairman Bob Ivell says Urbium, operator of the Tiger Tiger bar chain, ‘is a good fit’ and it remains a target along with vodka bar chain Inventive Leisure.

Of the current estate, Ivell says Walkabout is ‘very much about sport’ and expects to benefit from various second half sporting events, particularly the football World Cup and the hoped-for continuation of cricket fever. Jongleurs ‘remains a unique entertainment format’ and, like Walkabout, is still a strong, cash-generative brand.

For the six months to the end of December, continuing operations at Regent pumped up pre-tax profits 12% to £6.4m on sales decreased 2.1% (by disposals and closures) to £65.8m. Profits were improved due to interest savings, as Regent has wrangled new, five-year, £100m bank facilities at half the previous rate of interest. House broker Panmure forecasts sales of £132.2m for the full year, feeding through to PBT of £12.8m and EPS of 7.5p.

Licensing reform has hit Regent and the company’s ‘extremely diligent approach’ to implementing the required changes has resulted in its trading performance being affected. This, combined with tough trading conditions, resulted in the ‘good start to the year’, which saw like-for-like sales at the branded estate up 1.1%for the first 20 weeks, not being maintained for the rest of the period.

Longer-term effects of the reforms need to be determined before investing. Continue to avoid.