First-half sales at Sports Café, the listed operator of large-scale sports bars, have fallen 16% to £7.8m, after unseasonably warm weather in April and comparisons against the 2006 football World Cup.
The lower level of sales meant that pre-tax losses widened in the period – six months to 30 June 2007 – to £0.77m, from a marginal £0.06m last time.
The group, which operates eight venues, said margins improved from 74% to 75%.
During the period the group sold the freehold of its Birmingham venue for £4.4m, realising a profit over book value of £2m. The deal was struck on an initial yield of 6.25%, equating to an annual rent of £275,000. Proceeds from the transaction were used to pay down debt.
Peter Marks, chief executive, said: “The reduction in the company’s gross debt together with the Rugby World Cup during the second half of the year and the football European Championships at the end of the first half of 2008, provide improved prospects.”
Marks, who joined the group in February, said the group would press ahead with its revised strategy to expand the group through acquisition.
Following a cost-cutting exercise last year, administrative expenses were almost £0.5m lower in the period.
Interest payments increased just over 30% to £0.48m, reflecting the cost of expansion in 2006 and interest rate rises. It said it had since protected, or “hedged”, itself against further interest rate rises.
The company will next summer open its ninth site, in Cardiff. The 12,000sq ft venue will comprise a main bar, 60-cover restaurant, several pool-table areas and a club.
Sports Café said its eponymous brand was well known in each of its locations and continued to benefit from increased sports coverage on television.
The group was currently exploring the ways it markets itself through improved use of CRM (customer relationship management) technology.
