Bar and nightclub operator Ultimate Leisure has reported a 10 per cent drop in turnover for the year ending 30 June 2006.

There was also a significant decrease in operating profit to £2.4m from £8.9m in 2005 while pre-tax profit was £1.5m, down from £8.4m in the previous year.

The company said the year had presented “challenging market conditions” and also seen a significant reinvestment in the business, with the purchase in December 2005 of the Prohibition bar brand from Living Ventures for £2.7m.

Mark Jones, chair, said: “These results reflect the difficult trading environment that our sector has experienced and the start of our transformation of the group. We have a core estate of highly attractive assets and brands and the much-needed investment in these is now well underway.

“Trading in the current year has remained challenging. We will continue our significant but targeted capital expenditure in the business while the board remains confident that this programme will deliver value to shareholders in the future.” Details: www.ultimateleisure.com