LR Index leisure stockwatch August 2008

Leisure Report, Sept, 2008

From last month's 'Stop all the clocks' stock market misery, what a welcome relief to instead cry 'stop the press!'--but it's true, August has seen an overall improvement in the monthly average, several stocks making significant gains, and some welcome relief for beleaguered investors and chief executives alike.

While it's important to point out that bouncebacks are only to be expected from the recent low points, it's notable that there is good news beind many of the more impressive performances, suggesting that this mini-rally is more than a few canny institutional investors adding to their portfolios when leisure shares are at their nadir. That a low point may have been reached is indicated by the steady performance of Rank Group's shares, holding at last month's levels despite cautious words from the group's chief executive when updating the markets.

But nor are these recent upsurges the results of thin trading volumes or buyback programmes. True, sector analysts have remained pretty bullish about prospects, but institutions require more than a positive research note on the morning when interim results are announced to start flashing the cash, don't they?

The overall average improvement is all the more impressive when factoring in the 100% fall in the value of TurfTrax, which has entered administration, and a 50% fall in penny share Playgolf, a decent company which has somewhat lost its way of late.

Of the standout positive results, GamingKing's huge surge can easily be attributed to its reverse takeover of Orb Holdings. Not a massive deal, by any means, but a canny one that really should prve beneficial to both parties.

JJB Sports posted another of the month's best performances, although one analyst suggested to me that this had more to do with the start of the new football season (when sales of replica kits are at their peak) than with the continuing excellence of its fitness division.

The market remains a long way from last year's peaks, a a glimpse at the final column indicates, but with the promise of M&A activity to come in the online gaming sector, which should buoy prices, perhaps this month's bounce really can be attributed to more than just the 'Beijing boom'.