Honeycombe Leisure admitted today that the past year has been the most challenging in its history, as fierce competition in the sector continued and the cost of red-tape and utilities soared.
The group, which operates and manages nearly 150 sites, made a loss of £400,000 compared with profit of £2m in 2004. Much of this loss was attributed to an upsurge in the "legislative burden", the additional cost of the new licensing regime and rising utility prices.
Turnover increased 7.7% year-on-year to £36.24m (2004: £33.65m).
In a bid to keep pace with the rapidly consolidating pub sector, it has refocused its operations on managing rather than owning pubs over the past 12 months.
Although 42 management contracts were signed in the year to 1 May 2005, Honeycombe's chairman Sandy Anderson admitted the company's financial performance was disappointing.
Anderson said: "It is the rapidly evolving shape of the industry that gives us confidence that a focused management team can continue to find new opportunities as companies amalgamate and a new class of investor looks at the sector."
Earlier this year Honeycombe set up a separate investment division for pub-restaurant chain Ma Hubbards as part of a planned £9m expansion. In June it formed Amber Taverns with a war chest of £14.5m to gain further management contracts.
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