Premium Bars slides despite festive boost
Jan 31 2009 by Chris Knox, The Journal
PREMIUM Bars and Restaurants has recorded an 8.5% fall in sales as it continues to be affected by tightening purse strings as the recession deepens.
The firm, which operates 48 outlets nationwide including the Living Room and Blu Bambu in Newcastle, said that it had suffered the decline in the six months to December 28, despite positive trade over the Christmas period, and is now holding talks with banks to secure its short and long term cash requirements.
Premier, which recently moved its base from Newcastle to Manchester but still has a strong North East portfolio, also said that it had recently undertaken a series of cost cutting measures, but was unavailable to confirm whether or not this included any job losses or site closures.
Such are the cash requirements of the business that it may be unable to provide end of year results to June 30 if it fails to secure adequate funding, meaning trading in its shares has been suspended under City rules. In January 2008 shares stood at 169.4p but were suspended on December 31 at 1.75p.
The firm, which changed its name from Ultimate Leisure at the end of 2007 and moved its head office out of Newcastle in April last year, employs hundreds of staff in the North East at operations which also include The Lodge on Mosley Street in Newcastle’s city centre and The Waterside hotel on Newcastle’s quayside.
The Royal Bank of Scotland is known to have been backing the firm in recent times and is believed to have allowed the company to sustain more than £40m of debt.
However, the Edinburgh-based bank has since asked the pub operator to find new investment to cover its short term cash needs as it too has hit hard times, with the Government now owning a majority stake in the bank.
A statement said: “The board anticipate that trading conditions will remain tough during 2009, but are confident that the cost savings initiative that have been put in place by the new management team will help mitigate this risk.
“The company continues to progress discussions with its banks in order to renew its facilities and procure the necessary additional funding to meet the short and long term cash requirements.”
The firm did say that it had avoided heavy discounting over the festive period which had done much to maintain overheads and that it is confident that its funding problems will be resolved over the coming months.
Last year saw Mark Jones step down as chairman of the firm after pre-tax losses rose from £2.6m in 2006/07 to £21.4m for the 12 months to June 30, mainly as a result of a massive writedown in its freehold estate value.
