Vodka bar chain looks to food to bolster profits

Intense competition and a price war on the high-street made the past year "difficult", bars operator Inventive Leisure admitted today, as it posted a fall in full-year pre-tax profits.

While turnover rose by 11% to £41.7m in the year to the end of June, pre-tax profit fell by just more than £1m, to £2.5m (2003: £3.6m).

Excluding exceptionals and disposals, pre-tax profits were £3m, against £3.8m last year.

But Inventive, which is behind the Revolution vodka bar chain, said new ranges, restructuring and, crucially, a focus on selling more food did appear to be turning the tide.

Total like-for-like sales fell by 9% during the year.

Margins on drinks improved by 1.2 percentage points, to 72.7%.

But food sales increased by a whopping 20.3%, double the rate of growth in drinks, with margins up by 1.6 percentage points to 51.8%.

Near the end of the financial year Inventive also introduced a new food offer, Vodka Kitchen, that chief executive Roy Ellis predicted would improve food margins still further.

"It is well documented that the last year has been a tough one for high-street bar operators in general," he said.

"It is no surprise that, in this environment, Inventive Leisure's trade has suffered. However, the initiatives that we implemented to counter the market conditions have shown positive results and we have improved our gross margins and the integrity of our brand," he added.

In the first 14 weeks of the new financial year, like-for-likes were ahead by 1.1%.

Overall sales in that period had grown by 13%, with food sales up by 65% as the Vodka Kitchen started to have an effect.

by Nic Paton

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