European Leisure is looking for further growth following the 30 per cent rise in pre-tax profit to £7 million sterling in the year ended June 30th, 1997. It is "committed to significantly expanding its market-leading position in American pool and snooker clubs, while growing its venue bar estate", according to the preliminary statement.
This growth will arise through acquisitions and developing its core businesses. However, as the industry is very fragmented, the acquisitions "will necessarily be on a piecemeal basis". Mr Patrick Hooper, finance director, told The Irish Times that the group plans to spend around £10.8 million on developments and acquisitions, the same level as last year.
Around half will be on acquisitions, he added. About 10 new outlets will be opened.
The biggest profit earner, Maygay, the amusement machine company, aims to maintain its position in the British market and increase its export business.
European Leisure has strengthened its financial position with a reduction in the gearing from 85 per cent to 50 per cent and this gives it a firmer base to expand. Following the resumption of dividend payments at the interim stage after six barren years, the group has now declared a final dividend of 3p, making a total of 4p. It is covered 4.6 times by available earnings. The latest results show a 16.2 per cent rise in sales from £76.7 million to £89.1 million. Group pre-tax margins improved from 7 per cent to 7.9 per cent. Fully diluted earnings per share grew from 18.4p to 19.2p.
Operating profits rose in two divisions - in sports bars and leisure, and in Maygay. They fell in bars and discotheques.
The sports bars and leisure division, which operates the Rileys American pool bars and snooker clubs, increased its operating profit by 15 per cent to £3 million.
The strategy, the group said, is to expand the division through acquisitions and development. The number of units was increased from 60 to 71 in the past year.
Maygay's operating profit rose by 70 per cent to £4.1 million.
Some of the units were successful but others performed below expectations due to strong competition.
Mr Hooper said Mr Ian Rock, group chief executive, will be taking a more direct interest in this division and that there should be a marginal improvement in the first half of this year.
The group's balance sheet, showing a rise in shareholders' funds from £62.9 million to £79 million, reflects the placing and rights issue which raised £11.4 million during the year. New bank financing, on improved terms, was put in place since the end of the year.
