Regent Inns PLC

Telephone:

020 8375 3000

Activities:

Regent Inns operates several brands of late-night, entertainment-led venues in the competitive high-street market, mostly held on leaseholds.
 
It has two key brands. Walkabout Inns is an Australian-themed chain that majors in sport (the estate has more than 1,000 screens), live music and entertainment.

Jongleurs is a chain of talent and comedy clubs with attached bars under the Bar Risa or Stone House names.

Key People:

Executive chairman: Bob Ivell
Chief financial officer: John Leslie
Operations director: David Turner
Commercial director: Simon Kaye

Commentary:

Regent Inns has given its shareholders three major shocks in the six years between 1998 and 2004. After revealing that the group had made a £6.6m pre-tax loss in 2004 and breached its bank covenants, Regent Inns drafted in Bob Ivell and John Leslie as trouble-shooters to shake-up or find a suitable buyer for the company.

Ivell came with a sterling pedigree, having transformed the shabby estate Scottish & Newcastle bought from Grand Metropolitan in 1992 into a prized asset of pubs, restaurants and budget hotels that he sold to the Spirit group for £2.5b in October 2003.

Both he and Leslie were shocked by the weak management controls they found, with no internal audit, no proper budgets, and no profit targets. He also found Regent was selling cheaper versions of key brands but charging premium prices.

Having addressed these problems and renegotiated the group’s banking facilities, Ivell has continued the strategy of building up the Walkabout and Jongleurs chains and flogging off the unbranded estate (although he feels this may be a mistake).

By February 2005, the share price was heading back towards 100p from a low of 10p and the group reported a pre-tax profit of £943,000 after exceptional costs of £4.3m from renegotiating bank facilities, reorganising the business and writing-off abortive acquisitions

Ivell sees especial value in the Jongleurs brand, whose unique offer better insulates it from the threats of over-competition and regulation that threaten more traditional high street bars and clubs. He has also toned down what he saw as an over-emphasis on Australian theming at Walkabout.

It seems a flog-off is far from Ivell’s mind. “There is an opportunity for consolidation in the pub market. This is not a bad vehicle for that,” Ivell told Chain Leader magazine in April 2005. The group’s subsequent bid for late-night bar operator Urbium and pursuit of vodka bar specialist Inventive Leisure highlights this ambition.

Strategy:

"Whilst there has been some evidence of a change in trading patterns attributable to licensing reforms, trading conditions on the High Street have remained difficult since the beginning of the New Year.  However, Walkabout and Jongleurs remain strong, cash generative and well-run brands.

Walkabout is well positioned to benefit from sporting events in the second half including the Six Nations, Commonwealth Games and the Football World Cup. In addition, we expect to see further benefits as we start to relax many of our self-imposed trading restrictions [in the run-up to the new licensing laws that took effect in September 2005] and enjoy the results of the improvements to our beer range and service delivery quality.

The board continues to seek value-enhancing consolidation opportunities and remains confident of the group's long-term prospects."

Source: interim results statement, 7 February 2006

Operating Data:

Total number of outlets: about 80

Number of Walkabout Inns: 48
Number of Jongleurs: 17
Number of Bar Risas: 11
Number of Stone Houses: four

Food represents 6.8% of sales

Total number of employees: 1,900

Financial Snapshot:

Full year

Turnover: £134m (2004: £128.5m)
Pre-tax profit: £5.4m (2004 -£6.6m)

Half year

Turnover: £65.8m (2004/5: £67.2m)
Pre-tax profit: £6.4m (2004/5: £1.4m)

Financial year end:
2 July 2005
Half-year end: 31 December 2005 (1 January 2005 for the preceding year)

Address:

77 Muswell Hill

London,

UK