LONDON (ShareCast) - AIM-listed bar operator Eclectic Bar Group rose on news of a subscription, but said it has begun implementing a cost reduction programme as it warned the effect of competitive pressures on current trading was likely to have an impact on its results for the rest of the year.
The company's share price was boosted by the news several directors, together with a leisure entrepreneur, are planning to raise £1.65m by subscribing for a total of 3.3m shares at 50p apiece.

Entrepreneur Luke Johnson will subscribe for 3m shares, equal to 18.5% of the enlarged issued share capital. Chief financial officer John Smith and the self invested pension plans of Reuben Harley, the firm's chief executive officer, will subscribe for 150,000 new share each.

The funds raised will be used to provide additional working capital to fund the development of the group's business.

The firm has reviewed costs both at site and head office levels, which has formed the basis of its cost reduction programme.

"Given current market conditions, we are retaining flexibility over the timing of the development and opening of our two new sites in Sheffield and Liverpool," the firm said.

"An update on the progress of these sites will be given in September when we report our results for the year."

The share price had jumped 37.42% to 66.65p by 09:42.

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