A bleak time ahead for the leisure industry

Two major players in the leisure sector have issued gloomy forecasts and it is expected that pubs, nightclubs and restaurants are in for a bleak Christmas.

Regent Inns lost more than a third of its stock market value yesterday as it warned annual profits will be no better than those issued in 2006. Regent, owner of the Walkabout, Jongleurs and Old Orleans chains, blamed a likely slowdown in consumer spending and the smoking ban.

Regent Inns’ executive chairman, Bob Ivell, said customers were going out later due to 24-hour drinking. Mr Ivell added that he was cautious about the future and added that England’s failure to qualify for next year’s European Championship would have hit sales whatever the economic climate. He even suggested Regent could be up for sale, noting it is well-placed to deliver value through consolidation. Shares collapsed 17.75p to 25p.

In addition, Clapham House, the chain that owns the Gourmet Burger Kitchen and Bombay Bicycle Club, fared even worse. A profits warning meant the shares slumped 112p to 136½p.

Other major players who aren’t performing well include Mitchells & Butlers, Enterprise Inns, The Restaurant Group, Individual Restaurant Group and Domino’s Pizza.

Further profit warnings from the leisure sector are expected, possibly leading to a flood of takeover deals as struggling companies look for refuge in the arms of larger groups.

Dwindling consumer confidence, increased rents and rising food-price inflation were blamed for the poor results.

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