Investment: Northern is worth a spin

THERE MAY be a slowdown in consumer spending, but Northern Leisure is still bullish. The nightclub operator is keeping up its opening programme.

The reason, it says, is that when you are in Northern's key target market of 18-25 year-olds, "you don't stay home on a Saturday night with Mummy."

This may be true, but during the summer months they didn't go to Northern's discos either. Like-for-like sales dipped alarmingly in June and remained in negative territory in July and August, albeit on a recovering trend.

Northern blames the slump on the strong pound which it says tempted more youngsters to save up for a foreign holiday.

Those that remained in Britain were still downing the Bacardi and Cokes at the same rate, and the average spend in Northern's 57 nightclubs actually rose from pounds 6.60 to pounds 7.26.

This doesn't sound much, but Northern targets this end of the market in provincial towns and says its low prices should stand it in good stead if things get tight.

Full-year profits were up an impressive 65 per cent to pounds 14.1m and should rise to pounds 20m this year. With 16 new clubs opened last year and with a good geographic spread, Northern looks a decent bet in the leisure sector.

The shares are down sharply from their near 300p peak in March, but rose 6p to 102p yesterday.

On a forward multiple of just nine they are worth a spin on the dance floor.