Living Room owner makes a loss

AIM-LISTED Premium Bars and Restaurants has announced an annual pre-tax loss of £21.4m on a turnover of £66m.

Its preliminary results for the year ended June 30, 2008 show that turnover increased 80% from £36.7m in 2007, following its acquisition of Bel and the Dragon and Knutsford-based Living Ventures, which owned The Living Room brand, in June 2007.

The group announced in April that it intends to relocate its head office from Newcastle-upon-Tyne to Manchester to “reflect the national spread of its current business”.

The pre-tax loss includes £20.5m of non-recurring costs, £19.0m of which are impairment charges. The loss before tax excluding non-recurring costs is £0.9m, compared with a profit of £0.4m in 2007.

The group is in negotiation with its bankers to gain more working capital and funds but said it is confidence that it will be successful.

Chairman Mark Jones said: “These full year results are against the background of a pronounced deterioration of the economy which has particularly hit the high street bar and restaurant market. Our sales have been negatively impacted by the wider economic malaise.

“We have experienced significant increases in costs, not least from utility suppliers. Steps are being taken to reduce costs and slow down capital expenditure as the group believes that protecting profit margins and conserving our cash balances is paramount at present.”

He added that he expected the new financial year to continue to be challenging and that like for like sales for the first quarter of the financial year are down 7.4%. Group like for like sales for the year were down 5% with the decline driven by drink and door income.

Group food sales were £16.1m compared with £2.1m in 2007, representing over 24% of total sales. The company said its acquisition of Bel and the Dragon and The Living Room brands has helped to grow food sales.

Mr Jones has given notice to leave the company and said the timing of his departure will be announced once a decision had been made.