PGA European Tour delivers shock warning on profits

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The Independent Online
PGA European Tour, the quoted golf course operator which recently bought a 50 per cent stake in the Woburn Golf and Country Club, shocked its investors yesterday when it announced a profits warning, a new strategy and the departure of its managing director.

The company, which is the quoted vehicle of the sports promoter Mark McCormack, said that trading in the first half had been affected by the strength of sterling and "a variable performance from the group's individual operations".

It said that, based on current trading, it expected the results for the year, including exceptional costs would be "materially below market expectations". The company's broker had been forecasting profits of pounds 2.8m. PGA's shares closed 8.5p lower at 51.5p.

Sean Kelly, managing director, is leaving the group. He will be eligible for compensation of up to pounds 210,000. Richard Thompson, chairman of Caspian, the owner of Leeds United football club, will move up to become executive chairman from his non-executive position. Ken Schofield, executive director of the PGA Tour and Ian Todd, managing director IMG Europe, will join the board as non-executive directors.

The company said that, following a review of strategy, it has decided to revise its previous aim of acquiring up to 20 golf courses by the year 2000. Instead, it will focus on the acquisition and development of flagship golfing venues.