Two and a half years after swooping on Allied Leisure, Georgica admitted this morning that the company had been in worse shape than it anticipated and it has taken longer than expected to make the "many changes" required.
Georgica announced a full-year pre-tax loss of £11.25m for the year to December 31 2002, on turnover of £83.86m. Its previous results, for 75 weeks to December 31 2001, showed a loss of £17.34m on turnover of £122.8m.
The group operating loss was £1.04m, against a loss of £11.12m for the previous 75 weeks, equivalent to a loss per share of 14.8p against 40.0p previously.
Nicholas Oppenheim, the former boss of Northern Leisure, pounced on Allied Leisure in September 2000 when its shares were at a 12-month low of 92p after a profits warning two months earlier.
The all-paper deal for the company, which ran chains of 10-pin bowling alleys and snooker clubs, and Burger King franchises, offered one Georgica share for every Allied share.
Today, company chairman Don Hanson said: "During 2002 Georgica made slow but certain progress towards its strategic objective of being a highly profitable, simple and transparent business ... sufficient progress has now been made for Georgica to be reasonably certain that the results for 2003 and 2004 will be more satisfactory than those now being reported.
"Sorting out Allied Leisure is proving to be a slow grind made slower by the prevailing economic environment. But the board is highly confident that Georgica will emerge as a simpler, leaner and highly profitable business."
At the Cue Sports division, like-for-like sales increased during the period but only by 0.6%, it said, and trading in the latter part of the year was worse than in the first part. However, Hanson said much of the estate has not been refurbished for up to 15 years. Refurbishment wasnow well under way, he said; the new Rileys format was already proving successful at five clubs, work has been completed at a further 15 clubs and is at varying stages of completion at another 40. Same-outlet sales from all refurbished outlets since opening are 5.3% better than the remainder of the estate, while same-outlet sales for the new concept Rileys since opening are up 16.7%.
Georgica said it was looking for sites for new clubs, a search made easier because "poor results for the licensed trade as a whole, partially caused by unseasonally warm weather in the autumn, coupled with the general economic slowdown" have lowered expectations among vendors and landlords. Detailed negotiations are taking place on "a number" of new sites, it said.
Allied Leisure now consists of 33 Burger King restaurants, 10 ten pin bowling centres and 10 pubs and nightclubs, plus a number of "unlettable" vacant properties, Georgica said. It said it was confident that by the end of 2004 it would not be necessary to provide further financial support to Allied Leisure, and "intil then Georgica intends to provide Allied Leisure with only the most limited support", it added.
Like-for-like sales at the company's Burger King outlets showed a 7.1% fall in 2002, with November and December recording a slowing fall of 3.7% and 0.3% respectively. The company said today that the improving trend has continued, and in the first quarter of 2003 same outlet sales in Georgica's franchise division increased by 4.9%.
Trading at Megabowl was strong for the first half of the year with same outlet sales up 5.0% but was less satisfactory towards the end of the year: same outlet sales for the full year rose by only 2%, Georgica said.
Towards the end of the year Megabowl was refinanced by The Royal Bank of Scotland to provide additional funding for future development and to redeem a large part of the mezzanine debt provided to Megabowl by Duke Street Capital, which has been cut to £19.2m from £30.2m.
Georgica admitted that at the end of December it breached one of its banking covenants by around 3%. However, changes had been made to its facilities and it was now compliant. At 11 April it had net debt of £41.3m and undrawn bank facilities of £20.2m, "which is more than sufficient for the foreseeable needs of our businesses."
Georgica shares were unchanged at 31.5p tonight.
Georgica announced a full-year pre-tax loss of £11.25m for the year to December 31 2002, on turnover of £83.86m. Its previous results, for 75 weeks to December 31 2001, showed a loss of £17.34m on turnover of £122.8m.
The group operating loss was £1.04m, against a loss of £11.12m for the previous 75 weeks, equivalent to a loss per share of 14.8p against 40.0p previously.
Nicholas Oppenheim, the former boss of Northern Leisure, pounced on Allied Leisure in September 2000 when its shares were at a 12-month low of 92p after a profits warning two months earlier.
The all-paper deal for the company, which ran chains of 10-pin bowling alleys and snooker clubs, and Burger King franchises, offered one Georgica share for every Allied share.
Today, company chairman Don Hanson said: "During 2002 Georgica made slow but certain progress towards its strategic objective of being a highly profitable, simple and transparent business ... sufficient progress has now been made for Georgica to be reasonably certain that the results for 2003 and 2004 will be more satisfactory than those now being reported.
"Sorting out Allied Leisure is proving to be a slow grind made slower by the prevailing economic environment. But the board is highly confident that Georgica will emerge as a simpler, leaner and highly profitable business."
At the Cue Sports division, like-for-like sales increased during the period but only by 0.6%, it said, and trading in the latter part of the year was worse than in the first part. However, Hanson said much of the estate has not been refurbished for up to 15 years. Refurbishment wasnow well under way, he said; the new Rileys format was already proving successful at five clubs, work has been completed at a further 15 clubs and is at varying stages of completion at another 40. Same-outlet sales from all refurbished outlets since opening are 5.3% better than the remainder of the estate, while same-outlet sales for the new concept Rileys since opening are up 16.7%.
Georgica said it was looking for sites for new clubs, a search made easier because "poor results for the licensed trade as a whole, partially caused by unseasonally warm weather in the autumn, coupled with the general economic slowdown" have lowered expectations among vendors and landlords. Detailed negotiations are taking place on "a number" of new sites, it said.
Allied Leisure now consists of 33 Burger King restaurants, 10 ten pin bowling centres and 10 pubs and nightclubs, plus a number of "unlettable" vacant properties, Georgica said. It said it was confident that by the end of 2004 it would not be necessary to provide further financial support to Allied Leisure, and "intil then Georgica intends to provide Allied Leisure with only the most limited support", it added.
Like-for-like sales at the company's Burger King outlets showed a 7.1% fall in 2002, with November and December recording a slowing fall of 3.7% and 0.3% respectively. The company said today that the improving trend has continued, and in the first quarter of 2003 same outlet sales in Georgica's franchise division increased by 4.9%.
Trading at Megabowl was strong for the first half of the year with same outlet sales up 5.0% but was less satisfactory towards the end of the year: same outlet sales for the full year rose by only 2%, Georgica said.
Towards the end of the year Megabowl was refinanced by The Royal Bank of Scotland to provide additional funding for future development and to redeem a large part of the mezzanine debt provided to Megabowl by Duke Street Capital, which has been cut to £19.2m from £30.2m.
Georgica admitted that at the end of December it breached one of its banking covenants by around 3%. However, changes had been made to its facilities and it was now compliant. At 11 April it had net debt of £41.3m and undrawn bank facilities of £20.2m, "which is more than sufficient for the foreseeable needs of our businesses."
Georgica shares were unchanged at 31.5p tonight.
Georgica profit & loss account for the 52 weeks to 29 December 2002
52 weeks to 29 Dec 2002 | 75 weeks to 30 Dec 2001 | |
£000 | £000 | |
Turnover: group and share of Megabowl jv | 125,857 | 172,601 |
Less: Share of turnover of Megabowl jv | -42,002 | -49,803 |
Group turnover | 83,855 | 122,798 |
Cost of sales | -38,063 | -61,027 |
Gross profit | 45,792 | 61,771 |
Total operating costs | -46,831 | -72,958 |
Group operating loss | -1,039 | -11,187 |
Loss on ordinary activities | -1,995 | -5,237 |
Loss per share | -14.8p | -40.0p |
