23rd Mar 2016 09:40
LONDON (Alliance News) - Eclectic Bar Group PLC on Wednesday said it swung to a profit in the first half of its financial year as it works to reduce its cost base, although attempts to boost revenue are still ongoing.
Eclectic, which runs bars for students and young professionals, said it made a pretax profit in the half year ended December 27 of GBP0.3 million, having suffered a GBP0.5 million pretax loss in the same period the year before.
Revenue, however, fell to GBP10.7 million from GBP12.1 million, as the company faced lower student numbers in its bars, increased competition and difficult trading at its Dirty Blonde bar in Brighton.
Eclectic highlighted those issues at the time of its full-year results in September, and said it was working to reduce head office costs, close unprofitable nights and review the estate in order to mitigate the challenges. It also noted an underperformance from its Lola Lo bar in Derby.
On Wednesday, Eclectic said it has made good progress in addressing those issues, and that Derby Lola Lo has now become profitable, although Brighton Dirty Blonde is still facing challenges with mid-week sales, meaning overall sales still fell in the first half.
Eclectic managed to make a profit, however, due to a decrease in head office expenses and general operating expenses. Head office expenses decreased to GBP0.8 million from GBP1.2 million, while overall operating expenses reduced to GBP8.1 million from GBP10 million.
Eclectic will not pay an interim dividend for the period.
"Trading for the first half is in line with market expectations, and we expect this trend to continue through the second half as management executes the group's strategy," Eclectic said in a statement.
Shares in Eclectic were trading up 12% at 59.00 pence on Wednesday morning following the announcement.
By Karolina Kaminska; [email protected] @KarolinaAllNews
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