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Thu 18th Sep 2014 - Nick Basing – Essenden will stick with ten-pin bowling
Nick Basing – Essenden will stick with ten-pin bowling: Essenden chief executive Nick Basing has reported that the company has changed its mind on diversifying into other leisure businesses after seeing its core ten-pin bowling and family entertainment business performing well. He said: “In February 2013, we started to consider whether a transformational acquisition in other areas of leisure could enhance shareholder value. Since then, we have examined a number of opportunities and have carried out limited due diligence on several potential acquisitions. During this time, confidence in our tenpin bowling business has grown due to recent record results currently being attained. We feel, therefore, that further expansion in our area of expertise would be more value enhancing than diversification. Given the preceding comments we have concluded that, for the foreseeable future, a transformational acquisition would not enhance shareholder value. Some of the improvements we have implemented in this first half will have a positive ongoing impact on the future financial performance of our business. We have momentum. I am also pleased that recent trading reflects the progress we have made. Since the end of the first half, trading has been particularly strong, assisted in part by favourable weather conditions. For the 37 weeks to 14 September 2014, like-for-like sales were up 9.2%. We remain determined to grow our business either organically or through an acquisition. We do not take for granted the recent improvements in the economy and continue to work tirelessly to create a stronger business for customers, colleagues and shareholders.” Ebitda rose 9.3% to £3.1m in the 26-week period ended 29 June. The company added: “Turnover for the period was £24.2m (2013: £24.3m). Having closed three sites last year (Milton Keynes, Liverpool, Chester) and one in early 2014 (Grantham), this was a strong overall performance with like-for like sales for the 26 week period to 29 June 2014 up 6.1%. The first quarter was particularly favourable, partly offset in Quarter Two by the impact on trading from the later timing of Easter and the World Cup. Optimising our property estate of just under 1m sq feet continues to be a major focus. There are a number of discussions underway to either restructure leases or return excess space to landlords. These discussions are taking some time with landlords, however we are optimistic about achieving good outcomes. We have seen the benefit of concentrating our resources and capital on fewer more profitable sites during this half year. Capital spend in the first half was £0.9m (2013: £0.2m). We expect to increase spending on a combination of high returning capital projects and site refurbishments in the coming months. We recently announced a significant new partnership with Bandai Namco to be our new machines supplier. The new contract will result in us acquiring and retaining 100% of the revenues for certain types of machines, and this will improve the overall profitability of our machines estate. Bandai Namco are one of the World’s leading games manufacturers, and this contract will give us access to the most recent video releases and a better quality machines estate overall. We have also changed our call centre supplier to Eckoh, thus combining all our telephony services under one contract. We are optimistic about the sales potential that will come from this. Both new contracts will come on stream in Quarter 4 and the transition arrangements are going well.”
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