Payout up as First Leisure marches on

FIRST Leisure bounced back in the second half of 1991/92 to record its tenth successive year of profits growth. Shares rose 7p to 327p, underpinning the ten-pin bowling, discos, and resorts company's premium rating to the market and the leisure sector.

Pre-tax profits, down 4 per cent at the interim stage, finished the year to 31 October 2.3 per cent higher at pounds 31.1m. Trading since then has improved, although the company said its operating plan was still based on continuing recession.

Recession or not, analysts expect a further profits advance this year. Estimates start at pounds 34m pre- tax, giving projected earnings per share of 16.2p, and a price-earnings multiple of 20 against the sector average of 15.

Earnings per share for 1991/92 improved marginally from 15.67p to 15.83p, but the dividend total is rising 8 per cent to 6.14p.

John Conlan, chief executive, said last year's performance was reasonable, against the recessionary backdrop and the wet summer weather, which unsettled trading at the company's resort operations in Blackpool, Great Yarmouth and Eastbourne.

Trading profits from resorts held at pounds 12.3m, with the completion of the first phase of the upgrading of Blackpool Tower helping to counter the weather.

Returns from ten-pin bowling, predominantly based in the South and South-east, were aided by new openings, and rose 5 per cent to pounds 14.1m. 'We had to work harder to maintain previous levels. And while it is not immune to recession, it remains a good long-term business,' Mr Conlan said.

Bowling activities have been extended to the West. Bristol came on stream during the year, and a superbowl at Plymouth opened recently. Southampton will open soon.

Discos, however, lagged behind the other two divisions, not only because of the squeeze on consumer spending but because six of the larger venues were out of action for around 20 weeks at a time for refurbishment.

Earnings from dancing dipped from pounds 13.1m to pounds 12.5m, but the profit margin improved by more than 1 percentage point to 32.7 per cent, on turnover down from pounds 39.1m to pounds 38.2m.

'Wholesaling discounting on admission charges was of less importance, and spend per head held up. There were modest price increases, and the overall margin was at or marginally below where it was in the peak years,' added Mr Conlan.

Investment in all businesses was increased. Capital expenditure, funded entirely from cash flow, rose by pounds 5m to pounds 34m, and a similar amount, the company said, would be spent this year. Net borrowings remained static at pounds 33m, equal to 12 per cent of shareholders' funds.