Northern bar and nightclub operator Ultimate Leisure has warned its annual pre-tax profits will fall "substantially below" market expectations.
Broker Oriel Securities has downgraded its forecast for the year to June 2006 from £5.3m to £1.6m.
In the year to June 2005, the group reported a 6% fall in profits to £8.4m and warned that 2006 profits would be lower.
As a result, five board directors resigned last August and Mark Jones, previously chief executive at Yates Group, and chartered accountant Colin Rowlinson were drafted in as chairman and business development director to revive Ultimate's fortunes.
Jones blamed the profits shortfall on an "historic lack of investment in the group's bars", over the past three years allied to intense competition from new rivals.
Trading over the Christmas and New Year period also proved to be "very difficult".
The group will start to address this problem later this month when it begins a £4m project to refurbish 15 clubs.
On the plus side, the group said recent acquisitions had performed well. They include the Destiny nightclub in Glasgow and three Prohibitions bars acquired from Living Ventures in December.
By Angela Frewin
Get your copy of Caterer and Hotelkeeper every week - click here to subscribe and save 25%.
|Sudoku Join the craze and play Sudoku online!|