Regent Inns to fall into loss after sale of unbranded pubs estate

Shares in Regent Inns fell 6 per cent yesterday after the pubs group warned that full-year results would miss expectations following its decision to sell its remaining unbranded pubs.

Stephen Haupt, the chief executive, said Regent would pitch itself as "a company that is focused on running brands", throwing its weight behind its two core brands – the Australasian-themed Walkabout sports bars and the Bar Risa/Jongleurs comedy clubs, founded by Maria Kempinska.

It will also develop its "boy-meets-girl" PALs bars into a third main brand, he added.

The company said its move to sell its Discrete Estate of unbranded pubs would result in an overall exceptional loss for the year to 5 July, which would cause its results to be lower than market expectations. Its shares fell 8p to 135.5p.

Analysts said the decision, which was flagged at Regent's interim results, would allow it to capitalise on the strength of its existing brands. "It's a good step forward. They have substantially improved the quality of the business. The business is better set for the future than it was," said one pubs sector analyst, who did not want to be named.

Mr Haupt said Discrete Estate had taken up a "disproportionate amount of management time" and the disposals would "clear the way for an improvement in the quality of our underlying earnings going forward, and considerably enhance future growth prospects".

Regent has been conducting a piecemeal disposal programme and following yesterday's sale of 20 pubs to Wizard Inns for £27.9m it has 25 units left to sell.

Mr Haupt said the group was in discussions with several parties for a few of these pubs, but that the disposal of another large tranche was unlikely.

The group intends to convert the remaining nine units, from an original total of 70, into branded venues. Despite the expected hit for disposals, Regent said its trading performance was in line with market forecasts, boosted by strong sales in the first two weeks of the World Cup.

The group said underlying sales for the 50 weeks to 15 June were up 3.8 per cent, including a 10.9 per cent rise in its Walkabout bars.