Ultimate set to pause on deals
Ultimate Leisure, which is set to be re-named Premium Bars & Restaurants after its annual general meeting in November, is likely to wait six months before it acquires any more businesses.
The company raised £25m earlier this year with a share placing and has spent £36m buying the Living Room and Bel & the Dragon chain.
Ultimate has £7m left in its coffers, but believes that the credit crunch will impact on asking prices in the coming months. Chairman Mark Jones said that he believed "there would be downward pressure on asset prices as vendors get more realistic".
It is likely to be the start of 2008 before Ultimate seeks another deal. The unspent £7m will allow Ultimate fire power of around £20m with bank borrowings of around £14m. Ultimate already has a bank facility of £10m to allow the rollout of Prohibition, Bel & the Dragon and lead brand Living Room, which currently operates from 13 sites. Three new Living Room sites have been identified, including one in Bristol that will open by Easter 2008.
Meanwhile, Ultimate has reported that food sales are up 13-fold after its acquisition spree and now account for 20% of total sales. On a like-for-like basis the company reported it had maintained sales through the smoking ban and poor summer weather.
Greater exposure to food has been "invaluable" in successful preparations for the Northern Irish and English smoking ban, the company said. Turnover for the year to 30 June was up 11.8% to £36.3m and profit before tax was £400,000 pre-exceptionals, compared to £1.5m last year. There was a £300,000 exceptional restructuring cost. Ultimate also revealed a £2m write-down on four sites it is close to selling.
l Two Ultimate Leisure directors have bought shares in the company. Chairman Mark Jones has bought 15,282 shares for 194p each, bringing his total holding to 128,668 shares. Finance director Craig Bell bought 3,311 shares to bring his total holding to 11,556 shares.
