Leisure Media Issue 3 2009 - Leisure Opportunities

Clapham House Group, which owns Gourmet BurgerKitchen (above), hopes to take advantage of bargainsbers of closures, restaurants have not been hit by the smokingban, and clever use of price promotions has helped sustainthe larger chains. Consequently, there are those around whohope to take advantage of the present climate. Clapham HouseGroup, for example, which owns brands including GourmetBurger Kitchen and The Real Greek, has indicated that it hopesto capitalise on the weakness in the property market to snap uphigh quality sites that it might not otherwise have been able orwilling to secure. Having renegotiated its banking arrangements,which now run until 2012, the company has a £21.7m facility inplace. At its interim results a few months ago, Clapham Housesaid it was positioned “well” to “take advantage of a rapidly softeningUK property market as well as likely casualties in theindependent restaurant sector”. It’s also reportedly in talks tosell its Tootsies chain, which would raise further funds.Clapham House’s larger rival, The Restaurant Group, ownerof chains such as Frankie & Benny’s, also has cash availablefor acquisitions. It too is more likely to use its resourcesfor single site deals. It recently acquired the freeholds of twosites it was leasing from Punch Taverns. TRG’s chief executiveAndrew Page said: “The current climate in the pub marketwill yield some potentially lucrative opportunities to grow ourPub Restaurant business in the future and to date we have purchaseda couple of freeholds from Punch.”He suggested that patience is a virtue in this market andthat holding back for the time being may be sensible. “We’vedecided to ‘keep our powder dry’ in the expectation that overthe next couple of years we’ll have the opportunity to use ourresources to greater effect. Longer-term, we believe this businesshas the potential to grow significantly.”Aside from pubs and restaurants, anobvious area where companies are likelyto pursue deals is in online gaming,where the leading operators intend totry and consolidate the marketAnalysts suggest that such caution could pay off. Greg Feehely,leisure analyst at Altium Securities, a stockbroker, says: “Whenis the best time to buy if prices are still falling? Shouldn’t you bewaiting until the end of this year or early next year?”OTHER AREASAside from the pub and restaurant industry, the most obviousarea where companies have cash and are likely to pursedeals is in online gaming, where the leading operators, suchas PartyGaming and 888 Holdings, have both publicly statedtheir intention to try to consolidate the market. At the time ofwriting, both are known to be keen, for example, on acquiringCashcade, the owner of the popular Foxybingo.com web site.“The industry will see significant consolidation,” predicts NickBatram, leisure analyst at KBC Peel Hunt, a broker.The big two tour operators, Thomas Cook and Tui, are alsowell placed to take advantage of the recession by acquiringsmaller rivals. They have a habit of making bolt-on deals – Cooksnapped up Med Hotels earlier in the year – and this is onlylikely to continue. The recession has forced many travel-relatedcompanies out of business, and the industry’s giants look wellplaced to have their pick of the stragglers. ●Matthew Goodman is a business journalist at The Sunday TimesISSUE 3 2009 © cybertrek 2009Read Leisure Management online leisuremanagement.co.uk/digital 49