Regent shares plunge 16% on warning

REGENT Inns, the pubs group behind the Walkabout and Jongleurs chains, saw its shares crash 16 per cent yesterday after it served up a profit warning.

Analysts moved quickly to downgrade the company, with Panmure Gordon slashing its 2007 profit estimates and reducing the firm's rating to "hold" from "buy".

Regent said that, although its medium-term outlook was bright, its entertainment bars business, which also includes the Aussie-themed Walkabout chain, and Old Orleans division, had seen slower trading than anticipated.

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Profits for the year to end-June would be below market expectations, the group warned.

The consensus in the City had been for a figure of around 10.3 million, slightly down on the 10.6m reported a year earlier.

Regent said its entertainment bars achieved a like-for-like sales rise of 2.6 per cent in the 17 weeks to 31 March. However, a "more challenging high street trading environment" meant sales since the start of April were flat, compared with a year earlier.

June's figures are expected to be lower than last year due to comparisons with exceptionally strong trading during the 2006 World Cup.

At Old Orleans, which Regent bought from Punch Taverns last year, investment in the estate has been carried out later than anticipated, partly due to delays in landlords consenting to assign property leases.

The group - whose shares closed 16.75p lower at 91p - has 63 bars in its Walkabout and Jongleurs estate, with another 31 Old Orleans.

Meanwhile, pub and brewing group Marston's toasted a rise in sales after its increased focus on food attracted more families.

The company - previously Wolverhampton & Dudley Breweries - also said it was not planning to spin off its property assets into a real estate investment trust. It blamed the cost of moving to the REIT structure.

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Underlying profit before tax rose 1.5 per cent to 41.6m in the 26 weeks to the end of March, on revenues 8.5 per cent higher at 305m. The profits were slightly ahead of City hopes.

Marston's has about 2,500 pubs, 568 of which it manages as chains such as Pitcher and Piano, with the rest run by tenants. In recent years it has been buying smaller rivals to boost scale.