Queensborough in the black after 13 years

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The Independent Online
Queensborough Holdings, the leisure group in effect controlled by Kevin Leech, the biotechnology multi-millionaire, yesterday moved to damp expectations that it was ready to bid for a restaurant chain as it announced its first dividend and profit for 13 years.

Speculation about a possible acquisition grew in February after the group appointed Michael Guthrie, the man behind the Brightreasons restaurant group, with a brief to build up a new "leisure dining" leg for the business.

But in the wake of the sale by Whitbread, Brightreasons' new owner, of its Pizza Piazza chain to management for pounds 11.25m last month, Queensborough was yesterday suggesting that prices had got a little out of hand.

Philip Mason, who joined the group as chief executive in 1995 from Marina Developments, said they had been looking at other groups, but the price- earnings multiples had been too high.

"We are not prepared to pay heady price-earnings ratios. Anything around the 17 to 18 mark."

Mr Guthrie's brief is to add organic growth to Queensborough's existing mature businesses of caravan parks and day visitor attractions, building up its own brand and its own p/e, according to Mr Mason.

They were looking at the Italian food sector in a town centre format, with the typical restaurant size around 150 covers.

The model was Pizza Express, where the typical spend is pounds 10 a head, rather than Pizzaland, where it is more like pounds 6.

His comments came as Queensborough announced that pre-tax profits of pounds 3.59m replaced losses of pounds 996,000 in the year to January, thought to be the first time since the company went public in 1984 that it had been in the black.

A maiden dividend of 0.3p is being paid from earnings per share of 2.95p.

The results came after a year in which the group has transformed itself through over pounds 45m of acquisitions.

As well as 13 caravan parks in the UK, which have turned it into the country's third-largest operator, the group now owns six day visitor attractions, including Cheddar Gorge and the Needles, and two caravan parks in France.

Mr Mason said that after an increase in values in the UK, prices of parks were now much more attractive across the Channel, where the yields are similar.

Queensborough is expected to announce within the next week that it is buying another park in France from receivers.

Caravans chipped in operating profits of pounds 2.6m last year, mostly from acquisitions during the year.

The visitor attractions added pounds 1.75m, including pounds 1m from Pleasurewood Hills, near Lowestoft, picked up a year ago, while the Hotel Burstin in Folkestone chipped in a maiden pounds 1.3m.

Gearing of 80 per cent is expected to fall to 66 per cent by the year- end. Four directors increased their shareholdings in the group yesterday, with Mr Leech lifting his stake from 29.4 to 29.9 per cent.

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