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New theme at Flextech: Indoor parks could yield pounds 25m

FLEXTECH, the ambitious cable and satellite television group, is making a surprise diversification into indoor theme parks for children, in a move it says could generate profits of up to pounds 25m a year.

The first park is expected to open in the Lakeside shopping centre in Thurrock, Essex, early next year. There are plans for another nine in other out-of-town shopping sites throughout the UK.

Heads of agreement have already been signed with paper and media group Bonnier for more parks in Scandinavia, as part of a plan to build up to 50 parks throughout Europe by the end of the decade.

Created and co-owned by the former Muppets' producer Mark Grenside, the planned 'Action Station' in Thurrock is a 16,500 sq ft of half a dozen adventure playgrounds. With attractions like a three-floor industrial climbing maze called Trash Can Alley, all the centres will be located in hard-to-let corners of out-of-town shopping centres.

Flextech believes they will attract at least 300,000 children a year, each paying between pounds 3 and pounds 5 a go, excluding additional turnover from food and merchandising.

Flextech sees the move as integral to the branding of its TV business. Its Children's Channel satellite station will be heavily promoted at the sites.

While in corporate terms the investment is small - pounds 1m will be sunk into the construction at Thurrock with operating costs of pounds 1.5m thereafter, it could be an expensive gamble.

But Mr Grenside and Flextech dismiss sceptics by pointing to the success of the similar Discovery Zones in the US. A partial flotation this year by owners Blockbuster put their value at dollars 1bn ( pounds 660m).

'If we can make pounds 500,000 a year profit on each, that's pounds 25m a year,' said Mr Grenside.