Walkabout owner Regent Inns yesterday shrugged off a fall in full year profits, saying it was confident about its prospects after a rise in sales.
Regent said like-for-like sales over the past 11 weeks were two per cent ahead of a year ago as drinkers responded positively to changes at its Walkabout chain of Australian-themed bars, which includes an outlet in Broad Street, Birmingham.
The news sent shares up seven per cent as investors agreed that the company had returned to " sustainable growth" after a difficult two years, which saw Regent default on its banking covenants and new management parachuted in.
Same-store sales over the year to July 2 were up by two per cent, despite the absence of a major sports tournament to compare with Euro 2004, representing a major turnaround form the 5.4 per cent decline seen over the previous 12 months.
Although this return to sales growth was not mirrored by its annual profits, which fell to £ 11 . 3 million from £12.3 million a year earlier, analysts noted that there was a sharp improvement over the second half.
Revenues rose seven per cent to £131.3 million.
Chairman Bob Ivell said: "The group's financial position has been strengthened significantly from a year ago.
"The underlying performance of the brands, particularly Walkabout, has been substantially improved."
Premium brands such as Budweiser and Smirnoff Ice were stocked in Walkabout fridges for the first time, while the group slimmed down the food menu and selectively offered promotions.
Same-store sales at Walkabout rose 4.6 per cent in the second half, despite strong comparisons with a year earlier when drinkers flocked to the chain to watch Euro 2004 on big screens.
Regent also owns the Jongleurs comedy clubs and Bar Risa, which is now the focus of management energy as they strive to find ways of driving sales higher and overcoming intense local competition.
Underlining its optimism for the future, Regent revealed that it has agreed new debt facilities of £100 million that have cut its interest payments in half and given it the " flexibility to take advantage of market consolidation opportunities".
Altium Securities analyst Greg Feehely estimated the company had approximately £40 million in its coffers that could be used to acquire rival bar operators.
Earlier this year, Regent scrapped a £101.1 million offer for Urbium after directors of the Tiger Tiger owner refused to give their backing and invited other parties to bid.
"We believe that Regent now has a strong platform from which to pursue market consolidation opportunities and that such a strategy offers faster and stronger growth prospects," Mr Ivell said.
Ex-Scottish & Newcastle executive Mr Ivell joined the chain in October and has reduced net debt by 18 per cent to £58.5 million and stripped out £1.5 million of costs by cutting 27 head office jobs. Shares closed up 61/2p at 100p.
