SFI slows growth to tackle debt

DEBT-laden pubs and bars group SFI is reducing its gearing by halving the number of new bar openings originally planned this year.

SFI, which splashed out in recent months to swallow the Slug and Lettuce chain and the Parisa Group, owes the banks £121m, a sum which is beginning to worry new chief executive Andrew Latham. He handed over £8m in interest payments last year and is set to pay £9.5m this year.

Since he took over from Tony Hill in April he has reduced gearing from 130% to 121% but wants to bring it down further.

Latham today ruled out a rights issue, saying that slower growth would bring borrowing to a more acceptable level. He plans to open just 14 new venues at an average cost of £1m this year.

Latham's reign has got off to a good start with like-for-like sales in this financial year of 5.7%, beating the previous year's 4.2%.

Pre-tax profits for the year to 31 May were up 22% to £19.5m on total sales 25% higher at £144.1m.

Earnings per share jumped 24% to 17.2p and a dividend of 1.87p makes a total payment of 2.87p, up 10%.