SCA Sports Cafe

RNS Number:5075P
Sports Cafe Holdings plc
15 January 2007



15 January 2007


For immediate release


Sports Cafe Holdings ("Sports Cafe or the "Company")


                    Offer talks terminated and trade update


Sports Cafe (AIM: SCA) announced on 8 September 2006 that it had received an
approach from a third party and confirmed in trading updates on 17 October 2006
and 9 January that talks were ongoing. Sports Cafe said at the time that the
offer was unsolicited, informal and of a preliminary nature.


A formal satisfactory offer has still not been received, despite ongoing
discussions, and the Company has now terminated all offer related discussions.


Trading conditions slowed during the 4th Quarter of 2006 and, as a result,
like-for-like sales for that quarter were below 2005 levels.  For the full year
like-for-like sales fell 1% compared to 2005 levels but the impact of a new site
in Bristol and a full year's trading contribution from Liverpool and Newcastle
increased overall sales by 27% to #17.9 million.


In spite of continued market pressure on margins and operating costs Sports Cafe
has continued to maintain its gross margins and generated a positive operating
cash flow after interest payments for the year ended 31 December 2006.  This
cash was used to part-finance the continued expansion of the Company with the
remainder from existing bank facilities. The Company continues to remain within
the terms of its banking covenants.



As a result of the above, the Board expects sales revenue for 2006 to be below
current market estimates and the Group to record an operating loss for the year
at a similar level to that of 2005.



As announced on 9 January, the Company commenced a cost-cutting programme during
the final quarter of the year to streamline the business in line with current
trading levels, including the previously announced withdrawal from the on-line
gaming market. The impact of these measures will increase margins at an
Operating level during 2007 through the reduction of both central and operating
units' costs.



Following termination of offer related discussions, the Board is carrying out a
review of its future strategy and exploring a number of financing options,
including but not limited to the sale and leaseback of the Birmingham site. Such
options will allow the Company to restructure its balance sheet and continue the
expansion of the Sports Cafe estate.




Sports Cafe Holdings Plc                                 Tel: 020 7839 3377
Bill Balkou/Paul Wright

Buchanan Communications                                  Tel: 020 7466 5000
Charles Ryland/Rebecca Skye Dietrich

Teather & Greenwood Limited                              Tel: 020 7426 9000
Mark Dickenson/Sindre Ottesen




                      This information is provided by RNS
            The company news service from the London Stock Exchange
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