Clubhaus brings golf back to life: The Investment Column

Golf has been a graveyard in the past - for wealthy dreamers, companies and the banks that backed them. No surprise then that, despite enormous demand for the game and the relatively unprofessional management of most courses, there are only a handful of quoted companies seriously involved in the business. The appointment of David Lloyd to Clubhaus's board yesterday marks it as the most interesting of the bunch. Maiden figures since floating at the beginning of the year, showing profits of pounds 728,000 from turnover of pounds 3.15m, point to a company making the transition from asset-based development punt to measurable, earnings-based investment opportunity.

The background ought to be extremely auspicious. The number of registered golfers in the UK has grown sharply in the early 1990s, but despite the increased interest in the game, a yawning gap exists between cheap and not very cheerful municipal pay-and-play courses and the snooty, members- only clubs. Clubhaus's chief executive, Robert Bourne, likens the state of British golf to that of the American game maybe 30 years ago.

What the game desperately needs is an injection of professional leisure industry management to bring it up to date. That would include making clubs more family-friendly, combining courses with attractive fitness facilities (hence the David Lloyd appointment) and pushing non-golf spending such as food and drink. Only then will golf courses become viable financial enterprises.

Clubhaus is further down this path than anyone else and is on track to building a network of 12 to 15 UK courses to complement the three it has set up in France and Germany. Picking courses up from the receiver in a number of cases, at a fraction of their replacement cost, it has paved the way for a satisfactory return on capital.

It is very early days to judge whether Clubhaus has read the market correctly or whether it has the management depth to capitalise on the opportunity. If it has, though, it seems very unlikely that the likes of Whitbread and Rank would not snap the company up.The shares rose 7p to 74.5p yesterday, about where they floated. Interesting.