RNS Number:2695R
Georgica PLC
24 October 2003

EMBARGOED UNTIL 7.00 A.M                                       24 October 2003




                           GEORGICA PLC ("Georgica")

          Proposed acquisition of Megabowl Group Limited ("Megabowl")

  Placing of 32.0 million new Ordinary Shares of 5 pence each at 75 pence per
                                     share




Introduction

The Directors are pleased to announce that Georgica has made arrangements to
enable it to acquire Duke Street Capital's 50% shareholding in Megabowl.  The
Directors intend to finance the consideration for the Acquisition and the
associated expenses from an issue of new Ordinary Shares at 75 pence per share
to raise #24.0 million. Pursuant to the Placing, which is underwritten by
Investec, the Placing Shares are to be conditionally placed with existing and
new institutional investors.

These arrangements will enable Georgica to exercise its option to acquire Duke
Street Capital's shareholding in Megabowl for the sum of one pound and to
acquire from them certain debts owed to them by Megabowl for #22.7 million in
cash.  Georgica is delighted that it is able to proceed with the Acquisition. In
the Board's view it will ensure that Georgica will quickly become a substantial,
focused, homogeneous, comprehensible leisure business.  On the basis described
below, the Directors are highly confident that two years from now Megabowl will
be capable of achieving a run rate profitability equivalent to annual EBITDA of
at least #16 million, a level of profitability which was achieved as recently as
the year ended 1 July 2001.

The Directors intend to serve the formal notice of exercise of the Georgica
Option in the coming few days.  Further announcements will be made when the
Option Notice is served and the Acquisition is completed.

Information on Megabowl

Megabowl, which is a joint venture between Georgica Bowling and Duke Street
Capital, operates 50 ten-pin bowling sites across the UK. Of these sites, 15 are
freehold or held on nominal rents and 35 are leasehold.  An additional leasehold
site is not currently operational. The joint venture was established in November
1999 when Allied Leisure and Duke Street Capital combined their ten-pin bowling
businesses, Megabowl and Superbowl, with Allied Leisure and Duke Street Capital
having equal ownership of the Megabowl Shares and Megabowl Loan Notes and Duke
Street Capital advancing the Mezzanine Debt. Georgica inherited its interest in
Megabowl when it acquired Allied Leisure in January 2001. The unaudited accounts
of Megabowl for the year ended 29 June 2003 show that it generated EBITDA of
#11.7 million (2002: audited #13.1 million) and a loss before tax (excluding
shareholder loan note interest) of #20.9 million (2002: audited loss of #31.2
million) on turnover of #81.5 million (2002: audited #84.4 million) and that, at
29 June 2003, it had net assets of #32.4 million (2002: audited #62.3 million)
excluding shareholder loan notes, the shareholder mezzanine loan and accrued
interest totalling #105.0 million (2002: audited #105.9 million). The EBITDA for
the year ended 29 June 2003 comprised #9.2 million from freeholds and nominal
rent businesses, #9.0 million from leasehold sites, including a loss of #0.3
million from those held on onerous leases, and #6.5 million of central costs
after the release of certain provisions.

Background to and reasons for the Acquisition

Megabowl's recent poor performance has been due, in the Board's view, to a
number of factors including its overly complex financial structure, continuing
uncertainty over its ownership and the flawed Joint Venture Agreement. The
Directors have previously made clear their preference for Georgica to take
complete ownership of Megabowl or dispose of Georgica's interest rather than
remain a joint venture partner.

In June 2003, at its year end, Megabowl breached its financing covenants,
accelerating the discussions between Georgica and Duke Street Capital on the
future ownership of Megabowl. On 16 September 2003, Georgica and Duke Street
Capital entered into agreements which gave first Georgica and then (if the
Georgica Option has not been exercised) Duke Street Capital the right to acquire
the interests of the other in Megabowl.  On 22 October 2003, the resolution
proposed at the extraordinary general meeting of Georgica to allow Ordinary
Shares to be issued to fund the consideration for the Acquisition was passed.

The Board believes that Megabowl has considerable potential and that under
Georgica's sole ownership its performance will improve significantly. This view
has been supported by due diligence work undertaken in recent weeks. The Board
has, therefore, decided to exercise the Georgica Option.

Principal terms of the Acquisition

The agreement that Georgica reached with Duke Street Capital gave the Company or
its subsidiary Georgica Bowling the right to acquire the 50% of the Megabowl
Shares and Megabowl Loan Notes which Georgica does not already own together with
100% of the Mezzanine Debt. Georgica now intends to exercise its option and will
take full ownership of Megabowl on completion, which is expected to take place
on 3 November 2003. The consideration for the Acquisition is #22.7 million
comprising #20.7 million in respect of the shareholder Mezzanine Debt and
accrued interest, #2.0 million in respect of Duke Street's Megabowl Loan Notes
and #1 for its Megabowl Shares implying a value for Megabowl on an enterprise
basis, as a whole, of approximately #77.1 million including bank debt of
approximately #52.4 million.

Financing Arrangements

The Directors intend to finance the Acquisition from an issue of new Ordinary
Shares.  The Board has made arrangements for the conditional Placing with
institutional investors of 32.0 million Placing Shares at 75 pence per share to
raise approximately #22.7 million (after expenses). In the Placing Agreement
Investec has conditionally agreed, as agent for the Company, to use its
reasonable endeavours to procure subscribers for the Placing Shares at the
Placing Price and itself as principal to subscribe for any of the Placing Shares
not subscribed for by the placees. The Placing is conditional upon, inter alia,
exercise of the Georgica Option and admission of the Placing Shares to trading
on AIM by no later than 9.30 a.m. on 7 November 2003. An application has been
made for the Placing Shares to be admitted to trading on AIM and they are
expected to be admitted to trading on 29 October 2003. The Placing Shares will
rank pari passu in all respects with the existing issued Ordinary Shares. The
closing middle-market price of an Ordinary Share at the close of business on 23
October 2003 (the last business day prior to the release of this announcement)
was 79.5 pence.

Current trading and future prospects for the Enlarged Georgica Group

Georgica's trading continues to strengthen. Same outlet sales in the Cue Sports
business have increased by 2.5% in the year to date (12 October 2003). In July,
such sales rose by 3.9%, in August by 3.7%, in September by 8.2% (giving a rise
for the quarter of 5.2%) and in the first two weeks of October by 10.5%.
Refurbished units have performed very strongly, increasing same outlet sales by
10.0% in the year to date (12 October 2003) and the corresponding increase for
units trading in the new Rileys format was 18.0%.

Since our programme began, 32 outlets have been refurbished of which 11 are now
in the new Rileys format. A further 10 units (of which 8 will be new Rileys) are
expected to be refurbished by the end of 2003. A number of new sites are planned
for 2004.

Allied Leisure's same outlet Burger King sales have increased by 5.3% in the
year to date (12 October 2003) and by 5.0% in the quarter to 28 September 2003.
Corresponding increases for the leisure business were 0.5% and 2.9%
respectively. Georgica is confident that by the end of 2004 it will not be
necessary to provide further financial support to Allied Leisure. Until then
Georgica intends to provide it with only the most limited support.

In the six months to 29 June 2003, Megabowl's same outlet sales declined by
5.9%. In the quarter to 28 September 2003 same outlet sales for Megabowl
declined by 9.0%.

The Directors are highly confident about the longer term prospects for the
Enlarged Georgica Group.  The Board believes that the Acquisition has the
potential to transform the Georgica Group. Although Megabowl's more recent
financial performance has been disappointing, in the year to 1 July 2001
Megabowl achieved EBITDA of #16.4 million. The Directors have identified a
number of measures which they believe will improve the profitability of Megabowl
materially and return the business to levels of profitability achieved in the
past.

The Directors expect the reorganisation programme necessary to achieve these
benefits to take around two years to complete and wish to provide shareholders
with an illustration of the level of profitability they believe that Megabowl
will be capable of achieving at that point in time.

The following illustration of the future profitability of Megabowl has been
prepared using the accounting policies normally adopted by Georgica. It assumes
that there will be no unforeseen circumstances which have a material effect on
Megabowl and that Megabowl's underlying EBITDA is maintained at the level
achieved in the year to 29 June 2003 (when the business reported EBITDA of #11.7
million).  It also assumes that rents are increased by approximately #1.5
million annually.  Among the benefits that may be possible are the following:



                                                                                       Possible annual
                                                                                               benefit

                                                                                              #million
Performance improvement measure

Cost savings achieved by reducing purchasing costs as part of the Enlarged Georgica
Group, reducing marketing expenditure, aligning remuneration structures with those of             2.9
Georgica and eliminating certain overheads

Elimination of losses at certain Megabowl sites which are currently held on onerous
leases via improved trading, disposals or closures                                                1.8

Implementation of pricing policies consistent with those applied in Georgica                      1.0
                                                                                       
Reversal of recent negative performance trends in the Megabowl estate relative to
those of Georgica's own bowling estate                                                            1.0

Investment of #9.15 million in Megabowl (such capital expenditure to be funded from
cash generated by Megabowl or from its existing bank facilities) and generation of                2.0
returns similar to those achieved historically by Megabowl



Taking account of the above possibilities and assumptions, the Directors are
highly confident that in two years' time Megabowl will be capable of achieving a
run rate profitability equivalent to annual EBITDA of at least #16 million.

This projection is intended to provide an illustration of the running rate of
profitability that the Directors consider Megabowl to be capable of achieving at
a point in the future and is not intended to be interpreted as a forecast of
results for any future reporting period.

The Directors confirm that the projection of aggregate EBITDA for Megabowl has
been made after due and careful enquiry and that they consider the assumptions
on which it is made to be reasonable. WestLB, Georgica's nominated adviser, has
satisfied itself that the projection of aggregate EBITDA for Megabowl has been
made after due and careful enquiry by the Directors.

Working capital

The Directors are of the opinion, having made due and careful enquiry and taking
into account available banking facilities and the net proceeds of the Placing,
that the working capital available to the Company and the Enlarged Georgica
Group will be sufficient for their present requirements, that is for at least
the next 12 months from the date of the date of admission of the Placing Shares
to trading on AIM.



WestLB, authorised and regulated in the United Kingdom by the Financial Services
Authority, is acting exclusively for Georgica in relation to matters referred to
in this announcement and for no-one else and will not be responsible to anyone
other than Georgica for providing the protections afforded to its customers or
for providing advice in relation to the contents of this announcement or any
matters referred to herein.

Investec, authorised and regulated in the United Kingdom by the Financial
Services Authority, is acting exclusively for Georgica in relation to matters
referred to in this announcement and for no-one else and will not be responsible
to anyone other than Georgica for providing the protections afforded to its
customers or for providing advice in relation to the contents of this
announcement or any matters referred to herein.





Definitions

The following definitions apply throughout this announcement, unless the context
otherwise requires:

"Acquisition"                  the acquisition of Duke Street Capital's interest in Megabowl by Georgica;

"AIM"                          the Alternative Investment Market of the London Stock Exchange;

"Allied Leisure"               Allied Leisure Limited, formerly Allied Leisure Plc (registered number
                               1659715);

"Board" or "Directors"         the board of directors of Georgica;

"Duke Street Capital"          Duke Street Capital III Limited and/or Duke Street Capital IV Limited as the
                               context may require;

"EBITDA"                       earnings before interest, tax, depreciation, amortisation and exceptional
                               items;

"Enlarged Georgica Group"      the Georgica Group following completion of the Acquisition;

"Georgica" or the "Company"    Georgica PLC (registered number 4039562);

"Georgica Bowling"             Georgica Bowling Limited (registered number 4314072), a wholly-owned subsidiary
                               of Georgica;

"Georgica Group" or the        the Company and its subsidiary undertakings (as defined in the Companies Act
"Group"                        1985, as amended);

"Georgica Option"              Georgica Bowling's option to acquire the 50% of the Megabowl Shares and
                               Megabowl Loan Notes which it does not already own and acquire or repay a
                               Mezzanine Debt from Duke Street Capital to Megabowl pursuant to the Georgica
                               Option Agreement;

"Investec"                     Investec Bank (UK) Limited (registered number 489604);

"Joint Venture Agreement"      the agreement dated 18 November 1999 which sets out the terms on which Duke
                               Street Capital and Allied Leisure (a subsidiary of Georgica) agreed to invest
                               in Megabowl and governs the relationship between Duke Street Capital and Allied
                               Leisure (as supplemented and amended, inter alia, by an agreement between the
                               parties dated 14 February 2002);

"Megabowl"                     Megabowl Group Limited (registered number 3817300);

"Megabowl Loan Notes"          #173,156,496 discounted, subordinated unsecured loan notes 2007 issued equally
                               to Georgica and Duke Street Capital by Pondtrail Limited, a subsidiary of
                               Megabowl;

"Megabowl Shares"              3,083,334 ordinary shares of 10p each in the capital of Megabowl held equally
                               by Georgica and Duke Street Capital;

"Mezzanine Debt"               the principal amount of debt outstanding under the terms of a mezzanine
                               agreement dated 18 November 1999 as amended and restated by agreements dated 20
                               December 2000 and 20 December 2002 between, inter alia, Megabowl and Duke
                               Street Capital;

"Option Notice"                the option notice by which Georgica intends to exercise the Georgica Option;

"Ordinary Shares"              ordinary shares of 5 pence each in the share capital of Georgica;

"Placing"                      the conditional placing for cash with existing and new institutional investors
                               of the Placing Shares at the Placing Price;

"Placing Agreement"            the conditional agreement dated 24 October between the Company and Investec;

"Placing Price"                75pence per Placing Share;

"Placing Shares"               the 32.0 million Ordinary Shares to be issued pursuant to the Placing; and

"WestLB"                       WestLB Panmure Limited (registered number 2002991), nominated adviser to
                               Georgica.



End


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