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17 Dec 2008 11:46
17 December 2008
REGENT INNS PLC
("Regent" or "the Group")
AGM Statement
At the AGM held today, Jim Glover, Chairman, made the following statement:
"As previously reported in my statement accompanying the Group's financial results for the 52 weeks ended 28 June 2008, whilst the Group made a small profit on ordinary trading activities (excluding exceptional items) in the 52 weeks ended 28 June 2008, market conditions for high street bars and for late-night businesses in particular, which have been challenging for the last three years, worsened significantly in November 2007 as the impact of the credit crunch hit consumer confidence. From November 2007, Entertainment Bars and, in particular Walkabout, which is by far the largest of the Group's businesses in terms of revenue, profit contribution and cash flow, suffered a major downturn in activity which has continued since that time.
In January 2008, formal approaches were received from parties who expressed interest in acquiring the Group. Accordingly, the Group announced on 15 January 2008 that it had entered an offer period. Discussions progressed and extensive due diligence was undertaken. Ultimately however, due to the deterioration in the debt markets, it was not possible to reach agreement on the terms of a formal offer and accordingly we announced on 26 June 2008 that discussions relating to an offer had ceased.
At that time, we also announced that the Board's key medium term objectives were firstly to maximise cash flow from existing operations and reduce debt, whilst maintaining the integrity of the Group's brands, and secondly to stabilise sales trends in Walkabout. We have undertaken and continue to undertake a wide range of measures in respect of these objectives.
Current Trading and Outlook
As set out in the annual results, key points relating to trading in the first 15 weeks of the current year to 12 October 2008 were as follows:
like-for-like sales down 13% on the corresponding period last year; the comparable period included strong trading during the 2007 Rugby World Cup; substantial cost savings have been implemented including a major restructure of head office in July 2008; capital expenditure during the current financial year will be no more than £5m;our lending banks have been very supportive and our banking facilities (which expire in September 2010) have recently been revised in order to ensure they are appropriate for our current circumstances. As a result of these revisions, total facilities currently available to the Group are £96.5m, financial covenants have been adjusted to take account of market conditions and the cost of borrowing has increased substantially (although the recent reductions in base rate will help to mitigate this increase).
Subsequent to 12 October 2008, the trading environment has not improved and our like-for-like total sales trend is unchanged.
We remain very cautious in respect of the Group's prospects for stability and growth given the very tough trading environment in our specific markets and the wider impact of on-going economic developments.
Board Changes
A series of Board changes were made between June and August this year. The restructured Executive team has produced meaningful on-going cost savings and provides stability and a broad range of financial and operational experience to the business.
John Leslie, formerly Chief Financial Officer, was appointed Chief Executive Officer in June with responsibility for the Group's overall performance and for the achievement of its medium term objectives; Simon Kaye, formerly Commercial Director, became Chief Operating Officer in June with responsibility for the operational performance of all of the Group's businesses; Mike Foster, formerly the Group's Financial Controller, became Chief Financial Officer in July; Bob Ivell, formerly Executive Chairman, became non-executive Chairman in June and stepped down as a director in August; I became non-executive Chairman in August; John Laurie was appointed Senior Independent Director in August; Tanith Dodge became Chairman of the Remuneration and Appointments Committee in August;Russell Scott, Managing Director - Operations, left the Group in June.
I would like to thank Bob Ivell on behalf of the Board for his efforts in seeking a sale of the business in a most difficult financial environment, and for his role in initiating the restructuring and cost savings plan, which included his own departure in the Group's financial interests. We welcome John Leslie's appointment as CEO to oversee the implementation of this plan whilst also providing management continuity, along with the appointments of Simon Kaye as COO and Mike Foster as CFO.
The Group will now enter a close period until the announcement of its interim results."
- Ends -
Enquiries:
|
Regent Inns plc Jim Glover, Chairman John Leslie, Chief Executive Officer |
020 8327 2540 |
|
Merlin |
020 7653 6620 |
|
Paul Downes |
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