First Leisure buys Snowdome

JOHN SHEPHERD

The diversified First Leisure group has added another string to its bow by buying the Snowdome, Europe's first large real-snow indoor ski- slope at Tam- worth near Birmingham.

John Conlan, chief executive, said the company planned to build larger versions of the Snowdome, and had, in effect, blocked the path for competitors by buying the UK and Irish rights to the secret snow-producing and refrigeration process developed in Australia.

The Snowdome, which is profitable, has a 150m slope with a snow depth of 16cm. Talks are being held with an unnamed tour operator to offer holidaymakers an all-in package of learning to ski in the UK before taking to the slopes in Europe.

This acquisition fits into First Leisure strategy of concentrating on mass market, and lowprice leisure operations - other interests include ten-pin bowling, discos, bingo, amusement arcades, and health and fitness clubs. The typical cost for using the dome is pounds 10 to pounds 14 for a two-hour session. Customers can also learn to snowboard. First Leisure is not disclosing the price of the acquisition. Analysts said, however, that the company would have had to pay at least pounds 6m. News of the deal accompanied a trading update, which generally showed the leisure market is still price-sensitive and the pace of the climb out of recession remains slow.

Despite that confirmation, analysts were encouraged and underscored forecasts of a rise in taxable profits from pounds 36m to pounds 39m for the latest financial year, which ended on Tuesday.

Attendances are continuing to increase in several businesses, although the hot summer impacted adversely at operations in Blackpool - the company's main resort area. "We don't make money from people digging holes in the sand," Mr Conlan said. Spending on the lottery is still affecting bingo clubs.

The growth in attendances is still not quick enough to give the company confidence to raise prices by anything more than inflation. There are signs, however, that consumers are willing to spend more on drinks and food when they go out.