First Leisure plays games with Sega: Uninterrupted profit record maintained

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FIRST Leisure has formed a joint venture with Sega to test the UK market for family high-tech games centres. It is also moving into the health and fitness market by buying 75 per cent of ISL, owner of the Berkshire Racquets and Health Club, for an initial pounds 5.3m.

A trial centre, Sega World, will be housed in the Reading Super Bowl which First Leisure is due to open soon. John Conlan, chief executive, said: 'If successful, we would seek to develop this concept as an ancillary activity elsewhere in bowling.'

Sidelines such as American pool have provided a useful fillip for takings at the company's ten-pin bowling centres, which are showing a fall in attendances and pricing pressures.

First Leisure's results for the year to 31 October showed a decline in sports division profits from pounds 14.1m to pounds 13.7m on turnover of pounds 32.1m ( pounds 30.2m). Two more bowling centres were opened in Plymouth and Southampton.

Total group profits maintained their uninterrupted record of growth - but only just - at 2.3 per cent to pounds 31.8m. The final dividend has been lifted 6.4 per cent to 4.53p. Resorts operations - fronted by Blackpool and its famous tower which celebrates its centenary this year - recorded a 5 per cent fall to pounds 11.7m. Blackpool was the main culprit after adverse publicity over beach pollution and the poor summer weather.

However, Mr Conlan said: 'Resorts outside Blackpool have done well, and the numbers visiting Blackpool did recover at the end of the season.'

The company's most successful division was dancing, which saw attendances at its discos match the peak days in the Eighties at 6.2 million. Profits from dancing rose 15 per cent to pounds 14.5m.

Mr Conlan added: 'We haven't increased prices in this division. We have traded margin for volume.

'As the recession has gone on we have seen a smarter customer, looking for value for money and not afraid to ask for it any more.'

The seven bingo clubs acquired last summer contributed pounds 900,000 of profits, and the joint venture in theatres with Cameron Mackintosh doubled its contribution from a low base to pounds 400,000.

First Leisure says it will use the Berkshire Health Club, which has full membership of 4,700 each paying about pounds 650 a year, as a base to expand into the largely under-exploited UK market.

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