Incentive shares crash after second warning

Inventive Leisure, the bar group behind the Revolution vodka chain, is to join in the discounting frenzy on the high street after issuing its second profit warning in four months. Its shares crashed 23 per cent to 51.5p.

Inventive Leisure, the bar group behind the Revolution vodka chain, is to join in the discounting frenzy on the high street after issuing its second profit warning in four months. Its shares crashed 23 per cent to 51.5p.

The company, which has seen its market valuation fall from £50m to £12m during the past 18 months, said underlying sales had plummeted by 14.6 per cent in the past three weeks. Unless sales recovered, its current year profits would be "significantly below" City expectations, it warned.

Paul Hickman, an analyst at KBC Peel Hunt, slashed his pre-tax forecast by more than one-fifth to £2.9m. With Inventive's shares trading at a record low, Mr Hickman added: "The question now is 'What is this company worth?'"

Roy Ellis, the chief executive, who shares a 42 per cent shake in the group with the rest of the management team, admitted that taking the group private had "crossed my mind". But he added: "It wouldn't be very fair to be focusing in on snatching the company on the cheap. That would be opportunistic."

Inventive's problems follow months of woes for high street pub groups, which have been forced to slash the price of a pint to tempt in fickle drinkers. Mr Ellis said Inventive would offer two cocktails for the price of one, and bottles of beer from £1.50 from Sunday to Thursday.

He said the Government's recent clampdown on binge drinking had given him hope that the industry had reached the "beginning of the end" of discounting. "It won't be in the interest of the big operators to keep flying in the face of public opinion," he added.

Mr Ellis's comments came as Inventive reported a 5 per cent rise in interim profits before tax to £1.5m.