Honeycombe Leisure, the troubled pub operator, has reported a first-half pre-tax profit of £228,000, down from £601,000 in the previous year.
Turnover fell to £18.8m for the six months to 29 October 2006, compared to £22.5m in 2005, due to the disposal of a number of loss making short-term lease contracts.
The company said that overall sales were down 3.4% in the period, while margins held up.
However, the group reported a 3.2% increase in like-for-like sales in the two-week period over Christmas, with sites that had received even limited capital expenditure showing strong growth.
The company said this uplift in trade demonstrates the potential of the estate once funds are available for capital expenditure projects.
Sandy Anderson, chairman said: “Conditions remain competitive and while our community pubs traded well through the World Cup, High Street venues have suffered from lack of investment in addition to food houses losing custom on big match nights.”
The group also announced that it had come to a mutual agreement with Amber Taverns VCT, which has 13 sites trading, that as of the end of this month it will continue its development with its own management, ensuring that both groups can fully focus on their respective strategies going forward.
A supply agreement between the two companies will continue, allowing further synergies and benefits.
The company said that a revaluation of its estate resulted in a net increase in the carrying value of tangible fixed assets of £1.4m.
Anderson said the group remained in discussions regarding a possible offer, and that talks with another interested party have continued to make progress.
He described both sets of talks as constructive but reiterated that there was no certainty that any of these options under review will result in a transaction or any offer for the company being made.
He also said that the company had commenced a full review of its estate to ensure it can offer a positive option to smokers wherever possible in regards to this summer’s smoking ban.
Anderson said: “Going forward real progress has been made in identifying and pursuing a way forward for stakeholders. Our focus in the coming weeks will be to ensure that opportunity can be translated in reality.”
The company said that during the period, BB11, a site in Burnley, was sold to a VCT (venture capital trust) for £575,000,and was now under its management.
Honeycombe also incurred a reverse premium of £500,000 in exiting a site in Cumbria that was losing in excess of £120,000 per year.
Since 29 October, the group has also sold the Wordsworth in Cockermouth for £775,000, which was slightly above valuation of £750,000.
The Ma Hubbards VCT has seven sites trading, with a further two awaiting development.
