Honeycombe Leisure this morning reported a full-year pre-tax loss, describing the period as the "most challenging in the company's history" The company reported a loss before tax, goodwill amortisation, exceptionals and loss on sale of assets of £400,000, against a profit of £2.0m last year. In the core estate, the group said that tough trading together with a rise in costs relating to Sky TV, security and heat and light had pushed like-for-like sales down by 2.7%. Honeycombe said that three "major" units had shown "significant decline" for all or part of the year. Action has been taken at two of the sites - the Thatch & Thistle in Nelson has been disposed of and Chasers in Workington has been refurbished and was said to be showing a significant uplift in trade. The future of the third site is under review. Total revenues increased to £36.2m from £33.6m, reflecting a full year's trading on the six Ma Hubbard's sites and two additional Punch sites. Management fee income from Nectar almost doubled in the year to £650,000. Sandy Anderson, the company’s chairman, said: 'The 12 months ending April 2005 have undoubtedly been amongst the most challenging in the company's history, as they have been across the whole industry. "Whilst we are pleased to have made considerable progress in expanding our management services division and growing the sites under management, the underlying financial outcome is disappointing." The group said that the new year had started "satisfactorily" and while like-for-like sales in the core estate were down 2%, comparison was distorted due to income generated from the five England matches during Euro 2004. Honeycombe said that it believed there was "considerable opportunity" to manage pub assets on a short-term basis and has established a dedicated division to service such contracts. To date contracts on 42 sites have been signed with SNPE, Avebury Taverns, Admiral and Wolverhampton & Dudley. Earlier this month Honeycombe sold its holding in the six sites under the Ma Hubbard’s brand to Ma Hubbards Limited, a venture capital backed vehicle, for £500,000. MHL has been specifically set up to extend and develop the Ma Hubbard’s concept, which offers value for money family dining. MHL has raised £9m - £3m of equity and £6m in new facilities provided by the Bank of Scotland - to enable it to acquire the six sites and up to 20 additional sites. Honeycombe said that it now believed the development of the brand was better placed in the hands of a separately financed vehicle, both in terms of the aggressive roll out of the concept and for economies of scale.