RNS Number:5237T
Clubhaus PLC
22 December 2003
Monday 22 December 2003: embargoed for release at 7.01am
Charlie Parker, Managing Director
Paul Stephens, Finance Director
Clubhaus PLC Tel: 0870 240 8924
Giles Sanderson / James Melville-Ross
Financial Dynamics Tel: 020 7831 3113
Clubhaus PLC
Clubhaus, the Leisure Group, announces preliminary results for the year ended 30
September 2003.
Operations:
* Strong operating performance despite challenging trading conditions
* Successful year for all 11 Golf and Country Clubs
* Disposal programme now completed
* FPD Savills values Group's fixed assets at #71.1m
Financials:
* Turnover from continuing operations up by 8% to #26.9m
* Operating margin up to 30.6% from 27.5%
* Operating profits of #3.7m from a loss of #1.5m in 2002
* Loss before tax reduced from #14.3m to #0.7m
* Net debt reduced from #58.4 million to #54.9 million
Commenting on today's announcement, Paul Sellars, the new Chairman of Clubhaus
PLC, said:
"Having successfully disposed of our non core assets in 2002, the true value of
our strategy and business model is starting to be revealed. Our strategy this
year has been twofold. Our first aim has been to focus on maximizing returns
from our core UK Country Clubs. All the key metrics from these clubs are moving
in the right direction; sales, member subscriptions, profit margins and cash
generation.
The second part of our strategy is to develop our four clubs which do not
currently offer health and fitness facilities. Our capital structure has
prevented us from making further progress with these clubs during 2003, but the
Board is currently reviewing options, including the possible sale of the
Company, to enable it to execute on this part of the strategy."
Chairman's Statement
Results
The financial year to 30 September 2003 is the first full trading period
following the group's restructuring in May 2002 and therefore does not include
contributions from those non-core operations which were sold during 2002.
Our operating strategy during the past year has been to focus our attention on
our UK Country Clubs and to improve returns from these businesses. We are
therefore pleased to report a successful year at all 11 Clubs, in spite of the
continued backdrop of a challenging trading environment in the leisure sector.
The group results show a decline in turnover from #34.1 million in 2002 to #27.1
million in 2003, reflecting the disposals of non-core assets, which last year
generated turnover of #9.1 million. However, the benefit of these disposals is
shown in the 35% decrease in group costs and the fact that Clubhaus returned an
operating profit of #3.7 million against a loss of #1.5 million in 2002.
Overall like for like operating profit from continuing operations almost trebled
when the 2002 exceptional costs are excluded. The 11 core clubs generated a
like for like 26% increase in EBITDA from an 8% increase in turnover, reflecting
a stable cost environment in an operationally leveraged business. The success
of the clubs has strengthened our belief that the business model possesses
enormous potential.
Net debt in the period has been reduced in cash terms by #4.6 million. Closing
debt of #54.9 million comprises bank debt, the remaining high yield bonds and a
small amount of finance leases.
Notwithstanding the strong operating performance, the Group reported a small
pre-tax loss of #0.7 million (2002: #14.3 million) for the period, owing in the
main to the continuing high interest burden.
In addition, FPD Savills have carried out an FRS 15 valuation of the fixed
assets, resulting in a valuation of #71.1 million compared to a book value of
#73.1 million. The small decline is attributable to a slight softening in the
market, partially offset by the successful trading during the period.
Strategy
During the year, the Company completed the successful disposal of all of its
non-core businesses. In the interim report, published on 16 May 2003, the
Chairman made reference to two key strategic objectives, namely the continued
focus on the core business of the UK Country Clubs and the development of those
four clubs currently not offering health and fitness facilities. The operating
results stated above demonstrate the success achieved in the first of these
aims, but unfortunately our ability to execute on the second aim has been
restricted by the group's capital structure.
On 24 September 2003, the Board announced that it had appointed Close Brothers
Corporate Finance Ltd to assist the Board in reviewing the options available to
best allow Clubhaus to implement this second element of its strategy. As a
result of this review, the Company has received various preliminary expressions
of interest in the purchase of the Company. We are currently reviewing these
proposals and a further announcement will be made in due course. However, it
should be noted that the level of expressions of interest so far received is
currently materially below the gross fixed asset value as recorded in these
accounts.
Board Changes
During the year, there were two additions to the Board. In December 2002,
Thierry Delsol joined the board in an executive capacity as Chief Operating
Officer. In May 2003, Paul Stephens joined the board in an executive capacity
as Finance Director.
In addition, following an earlier announcement today, I have taken over from
John Hume as Non-Executive Chairman with effect from this morning. John will
stay on the Board as a Non-Executive Director and we would all like to thank him
for his guidance over the past 18 months as Chairman.
People
I would like to join with my colleagues on the Board in thanking all of the
Clubhaus employees for their efforts during what has been a challenging trading
environment for the leisure sector. The performance of the core clubs during the
year, as well as the successful conclusion of the non-core asset disposals, has
been a testament to their skill, determination and desire to succeed.
Conclusion
Notwithstanding our expensive and restrictive levels of debt, Clubhaus now has a
clear business focus and a profitable business model with exciting potential.
The coming months will determine how that potential is realised.
PAUL SELLARS
Chairman
22 December 2003
Operating and Financial Review
Review of results
The following review covers the year ended 30 September 2003. Comparative
figures are for the year ended 30 September 2002.
Turnover
The Group's turnover was #27.1 million for the year ended 30 September 2003
(2002: #34.1 million). The turnover from continuing operations, which comprises
the 11 clubs listed below, was #26.9 million (2002: #25.0 million) and was
derived from the following areas:
Membership Subscriptions. The total number of members grew during the year,
increasing the monthly subscription income in September 2003 (compared with
September 2002) by 9% to #1.2 million. There remains some capacity to grow this
revenue line within the seven existing Country Clubs, together with the large
potential within the four undeveloped clubs.
Joining Fees. A small joining fee contribution continues to be generated.
Operating revenues. (including green fees, food and beverage, retail and sundry
revenues) All areas enjoyed growth, with green fees in particular benefiting
from the good summer weather.
A detailed breakdown of each area's contribution to revenues is provided below:
2003 Actual % 2002 Actual %
Membership subscriptions 51 51
Joining fees 2 3
Green fees 10 9
Food and beverage 20 22
Retail (pro-shop) 7 6
Sundry golf revenues 3 3
Sundry health and fitness revenues 5 4
Accommodation 2 2
TOTAL 100 100
Cost of Sales
Cost of sales comprises direct costs of food and beverage, retail and sundry
health and fitness items. Gross margins achieved were as follows:
2003 Actual % 2002 Actual %
Food and beverage 63 61
Retail 30 32
Administrative expenses
Total administrative expenses, comprising all club-based overheads, including
rent, head office costs and depreciation, declined significantly in 2003 as a
result of the disposals of non-core assets and continued management focus on
cost reduction. Total administrative expenses decreased from #30.8 million in
2002 to #19.9 million in 2003. Head office costs have also been substantially
reduced year on year.
EBITDA on Continuing Operations
The reduction in expenses benefited earnings before interest, tax, depreciation
and amortisation, which grew by 26% from #5.9 million to #7.5 million at the 11
core clubs. The operating margin (pre-rent) grew from 27.5% to 30.6%.
Group profit
The group returned an operating profit of #3.7 million against a loss of #1.5
million in 2002. After interest payments of #4.4 million, the group reported a
significantly reduced loss on ordinary activities of #0.7 million against a loss
of #14.3 million in 2002.
Discontinued operations
The two businesses sold during the year made a trading loss prior to disposal of
#0.1 million. The businesses were sold at net book value, resulting in neither
gain nor loss on disposal.
Bond arrangement
The restructuring created a new #15.0 million bond instrument in May 2002. On
31 December 2002, interest on the bonds was paid in kind at the rate of 10%,
resulting in an increase in the principal value of the bonds to #15.9 million.
The bonds carry a coupon of 8% in 2003, rising to 12% thereafter. The bonds
carry an option to pay the interest for the period ending 31 December 2003 in
kind via the issue of additional bonds at a coupon of 10%. The option to pay
interest on the newly constituted bonds in kind for 2003 has been taken by the
Company, and interest is accordingly accrued in these accounts at a rate of 10%.
There is no option to pay in kind from 2004 through to repayment. Interest is
payable twice annually, with the first date of payment being 30 June 2004. The
bonds are repayable on 1 June 2009.
The bonds are stated in the balance sheet net of #1.0 million of costs
associated with the issue, which continue to be amortised over the life of the
bond in accordance with FRS 4.
Net Interest Expense
The interest charge for the Group principally relates to the bank debt and the
bonds. Bond interest totalling #0.4 million was settled in kind via the issue
of new notes on 31 December 2002. Bond interest totalling #1.2 million will be
settled in kind via the issue of new notes on 31 December 2003. Also included
in the charge is #0.2 million of deferred bond costs being written off in
accordance with FRS 4 "Accounting for capital instruments".
Taxation
Although the Group has made taxable profits in the year, these have been
absorbed by brought forward losses. The deferred taxation provision has been
eliminated, resulting in a small tax credit for the year.
Fixed Assets
In accordance with the guidelines of FRS 15 "Tangible Fixed Assets", an
independent Chartered Surveyor, FPD Savills, has valued all of the Group's
properties at 30 September 2003. As a result of this exercise, the carrying
value of the Group's fixed assets is being written down by 2.6%, from #73.1
million to #71.1 million. As mentioned in the Chairman's statement, the small
decline is attributable to a slight softening in the market, partially offset by
the successful trading during the period.
In accordance with FRS 15, #1.1 million has been credited to the Group's
revaluation reserve, and #3.1 million has been charged to the profit and loss
account reserve.
Capital Expenditure
During the year, the Group invested approximately #1.8 million in the core
clubs. At Mapledurham, construction began on the addition of a swimming pool
and additional car parking. The new facilities opened on 17 November 2003.
Other projects included three new exercise studios at The Essex, and a new
exercise studio and conservatory at Castle Royle. The Group regards ongoing
investment as essential in fulfilling the portfolio's potential.
Banking arrangements
In addition to the bond, the banking facilities negotiated during the
restructuring remain in place. As at 30 September 2002, these facilities were
all fully drawn down and totalled #43.3 million.
As at 30 September 2003, these facilities (all fully drawn) had been reduced to
#39.8 million. Since 30 September, a further #0.2 million has been repaid.
Going forward, one of the current bank facilities can only be amortised at the
rate required by the facility by the disposal of assets, which is a strategy not
considered to be in the best interests of shareholders. Accordingly, the terms
of this bank facility are being addressed as part of the strategic review
outlined in the Chairman's statement. The Directors are of the view that the
current banking arrangements support the preparation of the accounts on a going
concern basis.
Net debt and cash flow
Net cash inflow from operating activities of #5.7 million was generated in the
period (2002 outflow: #0.8 million). As a result of the positive cash flow and
the disposals during the year, the net debt of the group has reduced from #58.4
million to #54.9 million.
Conclusion
The trading performance from continuing operations is very encouraging. Turnover
has moved ahead on a like for like basis and operating margins improved
significantly despite the challenging trading environment. Debt levels have
been reduced both through disposals and inflows from operating activities. The
new financial year has seen the good performance of 2003 continue, and the
Mapledurham development has proven to be hugely popular and successful.
However, a swift and successful conclusion to the ongoing strategic review is
vital to enable us to maintain the upward trend.
DETAILS OF THE GROUP'S FIXED ASSETS
Country Clubs 30/9/03 FPD Savills
valuation (#m)
1. Castle Royle Golf and Country Club, Knowl Hill, Berkshire (Freehold) 15.25
2. The Essex Golf and Country Club, Earls Colne, Essex (Leasehold) 3.50
3. The Club at Mapledurham, Mapledurham, Berkshire (Leasehold) 3.75
4. Mentmore Golf & Country Club, Mentmore, Bedfordshire (Leasehold) 5.60
5. The Club at Meyrick Park, Bournemouth, Dorset (Leasehold) 3.45
6. Nizels Golf and Country Club, Hildenborough, Kent (Freehold) 13.55
7. The Tytherington Club, Tytherington, Cheshire (Freehold) 9.25
Golf only clubs with development potential
1. Benton Hall Golf Club, Witham, Essex (Part freehold, part leasehold) 2.00
2. Chartham Park, East Grinstead, West Sussex (Freehold) 2.80
3. Seedy Mill Golf Club, Lichfield, Staffordshire (Freehold) 3.60
4. The Warwickshire, Leek Wootton, Warwickshire (Freehold) 8.25
Total excluding PLC 71.00
PLC 0.13
Total 71.13
Charlie Parker
Managing Director
22 December 2003
Clubhaus PLC: Consolidated Profit and Loss Account
Year ended 30 September 2003
Continuing Discontinued Total Continuing Discontinued Total
Operations Operations Operations Operations
2003 2003 2003 2002 2002 2002
restated restated restated
#'000 #'000 #'000 #'000 #'000 #'000
Turnover 26,938 207 27,145 24,974 9,126 34,100
Cost of Sales (3,482) (51) (3,533) (3,387) (1,463) (4,850)
Gross Profit 23,456 156 23,612 21,587 7,663 29,250
Administrative expenses (19,621) (271) (19,892) (20,266) (9,352) (29,618)
(excluding exceptional
items)
Exceptional Administrative - - - (666) (497) (1,163)
expenses
Total Administrative (19,621) (271) (19,892) (20,932) (9,849) (30,781)
expenses
Operating Profit / (Loss) 3,835 (115) 3,720 655 (2,186) (1,531)
Loss on disposal of fixed - - - - (4,057) (4,057)
assets
Profit / (Loss) on 3,835 (115) 3,720 655 (6,243) (5,588)
ordinary activities before
interest
Net interest payable (4,424) - (4,424) (8,343) (363) (8,706)
Loss on ordinary (589) (115) (704) (7,688) (6,606) (14,294)
activities before taxation
Taxation on loss on 55 - 55 1,330 - 1,330
ordinary activities
Loss on ordinary (534) (115) (649) (6,358) (6,606) (12,964)
activities after taxation
Loss per share - basic (0.1p) (0.0p) (0.1p) (1.6p) (1.6p) (3.2p)
Loss per share - diluted (0.1p) (0.0p) (0.1p) (1.6p) (1.6p) (3.2p)
Clubhaus PLC: Statement of Total Recognised Gains and Losses
Year ended Year ended
30 September 30 September
2003 2002
#'000 #'000
Retained loss for the financial year (649) (12,964)
Foreign exchange reserve movement following disposal of European - (3,715)
assets
Profit and loss account reserve movement on fixed assets (3,089) -
Revaluation reserve movement on fixed assets 1,143 -
Total recognised losses for the year (2,595) (16,679)
FRS 19 ("Deferred Tax") prior year adjustment - 489
Total losses recognised since last annual report (2,595) (16,190)
Clubhaus PLC: Consolidated Balance Sheet
30 September 30 September
2003 2002
#'000 #'000
Fixed assets
Tangible assets 71,133 77,054
Current assets
Stocks 1,019 838
Debtors falling due after more than 1 year 912 1,083
Debtors falling due in less than 1 year 1,318 2,141
Cash at bank and in hand 718 974
3,967 5,036
Creditors: amounts falling due within 1 year (7,457) (12,414)
Net current liabilities (3,490) (7,378)
Total assets less current liabilities 67,643 69,676
Creditors: amounts falling due after more than 1 year (54,287) (53,670)
Provisions for liabilities and charges - (55)
Net assets 13,356 15,951
Capital and reserves
Called up share capital 915 915
Other reserves 140,377 139,234
Profit and loss account (127,936) (124,198)
Equity shareholders' funds 13,356 15,951
Clubhaus PLC: Consolidated Cash Flow Statement
Year ended Year ended
30 September 30 September
2003 2002
#'000 #'000
Net cash inflow / (outflow) from operating activities 5,677 (782)
Net cash outflow from returns on investments and servicing of finance (2,651) (3,237)
Tax received 450 -
Net cash outflow from capital expenditure and financial investment (2,476) (7,872)
Disposals 3,606 11,714
Net cash inflow from investing activities 1,130 3,842
Net cash inflow / (outflow) before use of liquid resources and 4,606 (177)
financing
Net cash (outflow) / inflow from financing (4,076) 3,946
Increase in cash 530 3,769
Reconciliation of net cash flow to movement in net debt
Increase in cash and overdrafts in year 530 3,769
Cash outflow / (inflow) from increase in debt and lease finance 4,076 (3,946)
Change in net debt resulting from cash flows 4,606 (177)
Other non-cash changes in loans (1,106) 42,888
Movement in net debt 3,500 42,711
Opening net debt (58,383) (101,094)
Closing net debt (54,883) (58,383)
1. Notes for the year ended 30 September 2003
The results have been prepared on the basis of the accounting policies set out
in the Group accounts for the year ended 30 September 2002. The financial
information included in this announcement does not constitute statutory accounts
for the years ended 30 September 2002 or 2003 within the meaning of Section 240
of the Companies Act 1985. The statutory accounts of Clubhaus plc for the year
ended 30 September 2002 have been filed with the Registrar of Companies for
England and Wales and those for the year ended 30 September 2003 will be
delivered following publication. The Auditors have reported on the accounts for
the year ended 30 September 2002, which were unqualified.
2. Profit and loss account
Owing to the disposal of the Fox Club after the announcement of the results for
the year ended 30 September 2002, the split between continuing and discontinuing
items for the year ended 30 September 2002 has been restated in order to
reclassify The Fox Club's results as discontinuing. In addition, only direct
costs of goods sold have been included in cost of sales for the year ended 30
September 2003 and the 2002 comparatives have accordingly been restated to
present a like for like picture.
Year ended
30 September
2002
#'000
Cost of sales
Continuing Operations as published in 2002 (11,719)
Less: Fox Club reclassified as discontinuing 276
Less: Direct expenses reallocated to administrative expenses 8,056
Continuing Operations in 2002 restated (3,387)
Administrative expenses (excluding exceptional items)
Continuing Operations as published in 2002 (12,428)
Less: Fox Club reclassified as discontinuing 218
Add: Direct expenses reallocated to administrative expenses (8,056)
Continuing Operations in 2002 restated (20,266)
3. Reconciliation of Operating Profit / (Loss) to Net Cash Inflow /
(Outflow) from Operating Activities
Year ended Year ended
30 September 30 September
2003 2002
#'000 #'000
Operating profit / (loss) 3,720 (1,531)
Non Cash Exceptional Items - 480
Depreciation and amortisation 1,625 2,575
Decrease in stocks held for resale 309 42
Decrease / (Increase) in debtors 515 (52)
Decrease in creditors and deferred income (492) (2,296)
Net cash inflow / (outflow) from operating activities 5,677 (782)
4. Loss Per Share
Year ended 30 Year ended 30
September 2003 September 2002
#'000 #'000
Attributable loss for:
Basic loss per share (649) (12,964)
Diluted loss per share (649) (12,964)
Number Number
Weighted average number of shares for basic and adjusted loss per 914,614,165 407,709,990
share
Basic loss per share (0.1p) (3.2p)
Diluted loss per share (0.1p) (3.2p)
Attributable loss for basic and diluted earnings per share is based on loss on
ordinary activities after taxation.
This information is provided by RNS
The company news service from the London Stock Exchange
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