Theme bar operator Luminar yesterday said sales and profits had fallen in a difficult and highly competitive market.

The company, which owns the London Hippodrome and the Liquid, Chicago Rock Cafe and Jumpin' Jaks brands, announced that like-for-like sales had dropped 3.7 per cent and pre-tax profits were down seven per cent at £25m in the 26 weeks to August 29.

The group expects the market's recovery to be slow and patchy and that the key Christmas period will heavily affect the current year's results.

However, chief executive Stephen Thomas said the company continued to generate cash, was outperforming its market and had developed brands that produced excellent returns.

Trading improved last month, with the decline in like-for-like sales easing to one per cent, and the group was selling off underperforming outlets in favour of developing a portfolio of dancing and entertainment brands in the late night market.

Mr Thomas said: "2005 will bring further progress."

The company blamed changes in demand and overcapacity in the sector for a like-for-like sales decline of 3.7 per cent.

However, performance met the company's expectations and its units were trading ahead of, or in line with, the market as a whole.

Luminar said it was continuing to make encouraging progress with its reorganisation.

It is building up its portfolio of late night dancing and entertainment venues mainly through the conversion of existing units and disposing of outlets deemed unsuitable for brand development.

The group is also implementing measures to try to simplify its business to make it more operationally efficient and effective, such as standardising its branding.

It is also reducing debt through strong operational cash flows and from disposals.

Like-for-like sales in the nine weeks to October 31 were down two per cent, which Luminar described as a significant improvement on previous trends.

It said it was cautiously optimistic in the longer term about underlying trends.

The group said it was increasing its interim dividend by ten per cent to 4.04p, which it said reflected the board's confidence in the future prospects of the company.

Published: 16/11/2004