LR Index leisure stockwatch November 2008

Leisure Report, Dec, 2008

A quick glance at the table below will confirm what you already know, it's been another month of heavy falls for leisure sector stocks. Still, rather than go on about that, let's have a look at some breaking news instead.

As Leisure Report went to press, and it's the final issue for me as editor, Top Ten Holdings published its year-end results.

Operating profits declined to 0.07m [pounds sterling] (2007: 1.4m [pounds sterling]). Pre-tax losses were 1.36m [pounds sterling](2007: 0.38m [pounds sterling] profit) after taking into account exceptional items which comprised closed site and reorganisation costs. Net asset value was 9.3m [pounds sterling] (2007: 23.7m [pounds sterling]). The firm said: "Whilst it is disappointing to report a loss the group has managed to make a positive cash contribution from operating activities. The results reflect some but not all of the cost cutting measures instigated last year. Spend per head is running slightly higher than last year but the number of visits has reduced as customers are making fewer visits per week due to their own cash constraints

"Whilst the group has an active capital expenditure programme, in the current economic climate we have done very little beyond normal repairs and renewals. As previously reported we have made VAT refund claims totalling c. 8m [pounds sterling] which splits into that claimed in respect of Fruit Machine income and Bingo income totalling 2.6m [pounds sterling] and 5.4m [pounds sterling] respectively.

"As a result of the Conde Nast case the period over which we can claim has been extended and further claims have been made for prior periods for an additional 5.2m [pounds sterling].

"Rank won its Tribunal claim in respect of interval bingo income but HMRC has appealed this and the case is due to be heard in the High Court in the first half of 2009.

"We have continued to withhold payment of VAT on interval and main stage bingo income and at 28 September there was a contingent liability for VAT of 2.1m [pounds sterling]."

Top Ten is a well-run company that before the smoking ban was trading nicely. I fervently hope it sees out these troubled times, as do you all.