Nightclub operator, Luminar, has reported full year profits hit by a dramatic change in market conditions.

Company chair, Keith Hamill, said: After many years of strong growth, we experienced a difficult trading period in the second half of the year to 2 March. This reflected a significant downturn in the sector in which the company trades.The group's core weekend business remained strong but mid-week volumes were particularly affected.

Group turnover for the full year was £392.4m, compared with £360.4m for 2002, and EBITDA rose 2.5 per cent to £114m.However, pretax profits dropped from £69.6 in 2002 to £66.6m this year.

Luminar has taken the view that the nightclub market is unlikely to improve in the short term and a rigorous review process of its operations has been undertaken.The development programme for new units and re-branding venues has been reduced from the original £60m planned, to £51.3m and funding for new development has been scaled back to £15m. . This equates to about nine new clubs.

During the current year the group will refurbish 59 of its properties at a cost of approximately £30m.Fifteen underperforming properties have been sold during the year and other disposals are planned.

Luminar will continue to invest in its Chicago Rock Café, Jumpin' Jaks, Liquid and Oceana brands and is reviewing the group's unbranded units with a view to extending the four names further.The company's Dancing division, with 174 units at the year end, saw turnover for the year rise to £240.2m, compared with £234.4m for 2002, but its net operating profit fall from £74.7m to £70m.

During the year, the first Oceana opened in Milton Keynes and a second has opened in Kingston Upon Thames since the year end.The Liquid brand saw seven openings in the period, which included new sites in Windsor, Wrexham, Basingstone, Hanley and Jersey and the conversion of two unbranded units in Shrewsbury and Ashford. Since the year end a Liquid has opened in Aberdeen.

Turnover at Luminar's entertainment division was up from £105.9m last year to £121.1m this year and net operating profit rose from £26.8m to £29.3m. At the year end it operated 92 units. Seven Chicago Rock Cafés opened during the year, which included new sites at Tamworth, Trowbridge, Braintree, Warrington, Jersey and Stevenage and the renaming of an unbranded unit in Southsea.

The Jumpin' Jaks brand saw new venues open in each Blackburn, East Grinstead, Hanley, Halifax, Stevenage and Glasgow and the rebranding of three other sites in Huddersfield, Ilford and Dumfries.In the company's emerging business division, Windsor and Manchester have seen the opening of The's during the year and an Orange House has opened in Kings Lynn. Under new management they have seen significant increases in sales and margins. Any further units will be developed from within Luminar's existing estate.

Looking ahead, company chief executive, Stephen Thomas, said: Luminar has reacted well to a sudden change in market conditions and is adapting its strategy accordingly. The current year has begun in the same vein as the second half of last year but we believe we are well positioned to benefit from any improvement in market conditions. Details: www.luminar.co.uk