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Premium Bars starts to show its mettle

Created:
25 February 2008
Written by:
Nigel Bolitho

Premium Bars and Restaurants is the new name for Ultimate Leisure, which was rescued by a £25m cash-for-equity injection by the Reuben Brothers and Dawnay Day in March 2007. This money, plus extra bank facilities, covered the cost of refurbishing its tired late-night bars and nightclubs estate. It also financed the cash acquisitions of four Bel and the Dragon pub restaurants for £8.75m in June 2007 followed by the purchase of 13 Living Room Restaurants for £28m. The near doubling of turnover over the two half years is due primarily to these two additions. Food revenues amounted to £8.5m in the latest six months against just £700,000 in the comparable period - and are rising.

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Premium also has cash to acquire another chain of eateries and is steadily increasing the number of Living Room outlets. Two more leasehold properties should open by the end of June 2008 and at least one more in 2008-09. They cost around £1.2m to set up and annualised capital spending is expected to be around £5m with £1m spent on general maintenance and the rest on Living Room restaurants. Broker Peel Hunt forecasts 12-month sales up from £36.28m to £65.57m and profits of £1.30m against a 2006-07 loss of £2.59m.

PREMIUM BARS AND RESTAURANTS
ORD PRICE: 155p MARKET VALUE: £61.7m
TOUCH: 152-158p 12-MONTH HIGH: 241.5p LOW: 154.5p
DIVIDEND YIELD: nil PE RATIO: NA
NET ASSET VALUE: 165p NET DEBT: 56%

Half-year to 31 Dec Turnover (£m) Pre-tax profit (£000) Earnings per share (p) Net div per share (p)
2006 18.2 -132 -1.04 nil
2007 35.4 643 1.09 nil
% change +95 – – –

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