LR index leisure stockwatch November 2006

Leisure Report, Dec, 2006

November was, on the whole, a better month for listed leisure firms, albeit from a dreadful comparative. 888, listed at the top of the index, deservedly clawed back some ground as continued speculation linked the firm with a buyout bid from Ladbrokes. While Ladbrokes is a firm favourite at this stage, and the synergies and cost savings make this a potentially excellent deal, many industry observers feel that a trump offer from one of the leading US gaming groups, probably Harrah's, could be on the cards. The prevailing feeling is that the US government has only clamped down on internet gaming temporarily, and will in fact look to regulate and tax the industry, within 18 months to two years. If this is indeed the case, it would make sense for any of the US operators to look to buy the established UK online firms, to gain access to both the technology, and just as importantly, the customer databases, on offer. That being as it may, 888 ended the month 40% better off in terms of share price, and this could be a sign that more bids could follow for its rivals.

Top Ten Holdings, the UK's third-largest bingo operator, took a large hit, with shares dropping 20% of their value, following the group's announcement that half-year profits had fallen sharply. The group, which is focused solely on bingo, acts as a barometer for the sector, where its larger rivals (such as Gala Coral and Rank) can make up bingo shortfalls in other areas of business. Top Tens shortfall could spell trouble ahead for bingo operators, coming ahead of next year's smoking ban.

Arena Leisure was one of the positive stories of the month. Two announcements from the group--that it was taking its catering operations in-house, and that its ATR vehicle had signed a great-looking distribution deal with a US broadcaster, helped lift sentiment. Shares in Arena ended the month almost 20% higher at 46.25p.

Deep Sea Leisure continued its recent trend of making small but appreciable gains, no doubt buoyed by news the company had scooped the Leisure Report Tourism, Attractions and Entertainments Operator of the Year award.

Elsewhere, Goals Soccer Centres continued its impressive run of late, adding 15% over the month to trade at 286p. Even news of an emerging competitor (see page 6) couldn't dampen investor spirits for the impressive five-a-side operator's shares.

Whitbread shares added 8%, and it will be crucial for chief executive Alan Parker to keep the shares heading north in the coming months, if a private equity takeover and asset strip is to be avoided.

Other notable improvers during November were Coffee Republic, which still has a long way to go to turn around its fortunes, although its new management team is already reporting distribution deals and making the right noises; and Northern Racing, which saw shares gain more than 14% to trade at 178p.

On the downside, ubet2win continued its recent slide, shedding 50%, World Gaming shares are now almost worthless, and Interactive Gaming lost a futher third of its market capitalisation. Let's hope for better fortunes in 2007.

Leisure Report LR Index leisure
stockwatch November 2006

                                               Market
                                                 cap
                                              ([pounds
Company                  Share     % up on    sterling]
                         price      month        m)

888 Holdings PLC        130.00p      38.89%      436.47
32Red PLC                75.00p     -15.97%       61.53
ADDLeisure                2.13p       1.86%        2.58
Arena Leisure            46.25p       17.4%      166.84
Betbrokers               12.00p           0       25.33
Betex Group              36.50p         -4%       49.95
BetInternet               5.75p       -1.0%       12.07
Caffe Nero              243.25p        1.4%      179.29
Coffee Republic           3.00p       17.6%       15.40
Deep-Sea Leisure         65.00p        3.2%       10.85
Empire Online            46.00p       -1.1%      134.68
Fairground Gaming        18.00P       50.0%        6.78
Fireone                  45.00p      -29.7%       22.50
Gaming Corporation        4.75p        0.0%       21.03
GamingKing                0.70p       37.3%        2.03
Georgica                129.00p       -3.0%      126.50
Goals Soccer Centres    286.00p       15.0%      119.79
Healthy Living Centre     0.20p        0.0%        1.24
IFX Group               180.00p        0.0%       57.86
IG Group                289.55p        9.3%      948.28
Interactive Gaming        3.94p      -19.1%        3.15
Ladbrokes PLC           399.50p       -1.8%        2.46
Leisure & Gaming          8.45p        0.0%        5.08
Luminar                 645.00p       10.2%      467.62
NETeller                141.50p       -2.6%      169.52
Northern Racing         178.00p       14.8%       48.80
PartyGaming              30.45p       11.7%     -191.22
Playgolf                  7.50p        0.0%        3.97
PowerleagueGroup         68.80p       -3.1%       56.28
Prezzo                   57.00p        2.2%      127.90
Rank                    245.82p        0.0%     1390.07
Stanley Leisure         859.50p        0.0%      600.76
Talarius                263.00p       16.9%      115.46
The Restaurant Group    243.27p        0.0%      463.26
Top Ten Holdings         83.00p      -20.2%       21.02
Ubet2win                  1.00p      -50.0%        1.60
365 Media Group          57.15p        0.0%       80.50
Whitbread               1485.00p       8.6%        3.24
William Hill            641.50p        0.2%        2.37
World Gaming              0.75p      -62.5%      694.22
Average                 180.47p       -1.5%      170.76

Company                  Year       Year          % off
                          high       low          high

888 Holdings PLC        225.00p     73.25p       42.22%
32Red PLC               177.00p     75.00p       57.63%
ADDLeisure                4.68p      1.50p       54.49%
Arena Leisure            47.00p     38.50p           2%
Betbrokers               15.00p     20.00p       20.00%
Betex Group              82.00p     36.50p       55.49%
BetInternet              13.00p      4.00p          56%
Caffe Nero              263.25p    183.08p           8%
Coffee Republic           4.45p      0.90p          33%
Deep-Sea Leisure         53.00p     72.00p         -23%
Empire Online           135.00p     43.00p          66%
Fairground Gaming       135.00p      8.00p          87%
Fireone                 469.00p     43.00p       90.41%
Gaming Corporation       14.38p      4.50p       66.97%
GamingKing                2.22p      0.40p          68%
Georgica                162.00p     89.00p          20%
Goals Soccer Centres    302.00p    132.50p           5%
Healthy Living Centre     1.25p      0.20p          84%
IFX Group               187.00p    105.62p           4%
IG Group                292.00p    155.25p           1%
Interactive Gaming        7.16p      2.25p          45%
Ladbrokes PLC           434.50p    371.26p           8%
Leisure & Gaming        168.00p      3.50p          95%
Luminar                 669.00p    461.00p           4%
NETeller                893.00p    128.00p          84%
Northern Racing         177.00p    127.00p          -1%
PartyGaming             158.00p     26.50p          81%
Playgolf                 19.00p      6.00p          61%
PowerleagueGroup         89.50p     59.00p          23%
Prezzo                   68.00p     49.00p          16%
Rank                    247.25p    188.00p           1%
Stanley Leisure         881.50p    583.00p           2%
Talarius                268.00p    120.00p           2%
The Restaurant Group    253.00p    149.50p           4%
Top Ten Holdings        134.00p     78.00p          38%
Ubet2win                  5.50p      0.35p          82%
365 Media Group          74.37p     45.95p          23%
Whitbread              1497.00p   1133.00p           1%
William Hill            681.00p    551.75p           6%
World Gaming            182.20p      0.75p         100%
Average                 243.36p    132.56p          38%