Activities

Ultimate Leisure is a late-night bar and nightclub operator whose venues are located predominantly in the North East of England and Ireland.

The company’s philosophy is to open stylish and imaginative drinking venues in freehold properties that achieve a target return on capital of 25%.

Its key brands are Chase (a lounge bar concept), the rodeo-themed Coyote Wild and the beach-themed Blubambu. A fourth core brand – Prohibition – was acquired from Living Ventures in late 2005 and will spearhead the group's bid to become a national player..

The group also operates a number of individually-named bars, many of them large-capacity venues, along with three hotels that also house bars and nighclubs.

Timeline

• June 1997: The company starts trading with the acquisition of five bars in the centre of Newcastle upon Tyne, along with the Waterside hotel and a Quayside property which becomes its first Chase-branded lounge bar. It subsequently buys the Rex hotel and three large venue bars in Whitley Bay, Tyne and Wear.
• July 1999: The group raises £6m to fund growth after floating on the Alternative Stock Market.
• November 1999: Ultimate buys four bars in Newcastle from Allied Leisure, followed by another three outlets in Sunderland the following month.
• 2000: The group opens the £1m Sports Bar Café in Newcastle in March, followed by the 1,000-capacity Sea nightclub on Newcastle’s Quayside in August.
• July 2001: After buying a number of sites in and around the North East in the early part of the year, the group acquires a student venue in Durham and snaps up the Gresham hotel in Newcastle for £1.1m
• September-October 2001: The group moves outside its North Eastern heartland with the acquisition of venues in Nottingham and Rotherham. Ultimate opens its first Beach nightclub in Sunderland, which can hold 1,300 people.
• January 2002: The group arranges a £13m debt refinancing packaging with Bank of Scotland.
• 2002: In September Ultimate opens its first beach-themed Blubambu club in Bigg Market, Newcastle, which is the first in the city with a 2am licence. In October, the first  rodeo-themed Coyote Wild bar  opens in South Shields.
• April 2003: The Bambu Beach becomes Ultimate’s first outlet in Belfast. 
• August 2003: Ultimate buys three freehold venues in Belfast from businessman Bill Wolsley for £4m in its biggest deal to date.
• October 2003: The group raises £20m through the placement of 6.9 million shares at £3 per share.
• September 2004: Ultimate buys its first venue in the Irish Republic, in Cork, which becomes a Blubambu. 
• August 2005:  The group shakes up its board a month before revealing a pre-tax loss of £95,000. Five board directors resign including chief executive Bob Senior and chairman Allan Rankin. Ultimate drafts in new chairman Mark Jones (the former chief executive at Yates) and business development director Colin Rowlinson to review its strategy and revive its fortunes.
• November 2005: Ultimate makes takeover approaches to vodka bar operator Inventive Leisure but loses out to Alchemy Partners’s bid in December.
• December 2005: Ultimate buys the three Prohibition bars in Manchester, Leeds and Liverpool from Living Ventures for £2.75m. In a separate deal, it acquires its first Scottish outlet, the 1,500-capacity Destiny nightclub in Glasgow, for conversion into a Blubambu.
• April 2006: The group announces plans to become a national player through the roll-out of the food-led, female-friendly Prohibition brand.

Financial snapshot

Full Year

Turnover: £36.4m (2004: £35.7m)
Pre-tax profit: -£95,000* (2004: £8.9m)
* after exceptional items of £8.5m relating to impairment of fixed assets

Half Year

Turnover: £17.5m (2004: £19.6m)
Pre-tax profit: £1.6m (£4.9m)

Financial year end: 30 June 2005
Half-year end: 31 December 2005

Operating data

Number of venues: more than 30
Number of employees: more than 1,250

Key brands
Coyote Wild (rodeo-themed bars): 3, in South Shields, Mansfield, Derby
Chase (lounge bars): 4, in Newcastle, Sunderland, Durham, South Shields
Blubambu (beach-themed bars): 4, in Newcastle, Rotherham, Cork, Derby (with two more (the former Beach Club in Sunderland and Destiny bar in Glasgow) in the pipeline)
Prohibition: 3, in Leeds, Liverpool, Manchester, Nottingham

Newcastle clubs: Luckies, Yel, Kiss, Bar M, City Vaults, POP Music Bar, Jimmyz, Sea, The Lodge
Other clubs: Barbacca (Belfast), Bambu Beach Club (Belfast), Halo (Leeds), Klute (Durham), Quilted Llama (Nottingham, Leeds),

Ultimate Hotels: 3, with on-site nightclubs and bars
Rex Hotel, Whitley Bay (70 bedrooms). Bars: Deep, Time, and Jimmyz
Gresham Hotel, Newcastle (11 bedrooms). Bars: Barbacca
Waterside Hotel, Newcastle (36 bedrooms). Bars: Jimmyz

Strategy

"These disappointing results reflect the historic lack of investment in the core business and the tough trading environment.  Our expectations for the year remain unchanged since we updated the market in January this year.  We continue to take a cautious approach to the second half following the very difficult trading over the important Christmas and New Year period.

'The new management team has instigated a capital investment programme across the business and is also addressing the cost base. Whilst realising the benefits from these initiatives will inevitably take time, we remain convinced that they will put us on a significantly stronger competitive footing and enable us to deliver value to shareholders in the future."

Source: interim results statement, 28 February 2006

Key directors

Chairman: Mark Jones
Finance director and company secretary: Craig Bell
Business development director: Colin Rowlinson

Contact

29 Mosley Street
Newcastle upon Tyne
Tyne and Wear
NE1 1DF

Tel: 0191 261 8800
Fax: 0191 221 2282

E-mail: ultimate.leisure@virgin.net
Website: http://www.ultimateleisure.com

Commentary

The year to June 2004 represented Ultimate’s fifth consecutive year of record results. But profit warnings in October 2004 and April 2005 were followed by the revelation that the group had made a loss of £95,000 for the year to June 2005 following exceptional costs of £8.5m.

A new board was installed to shore up the group’s fortunes and new chairman Mark Jones blamed the decline on stiff competition in some areas allied with an historic lack of investment in the sites over the previous three years.  “Some of our assets have become tired and no longer resonate with our customers,” he explained six weeks after taking control.

The recovery strategy included boosting the refurbishment budget for the year from £3m to £5m and introducing food to the core Chase, Blubambu and Coyote Wild bars – a strategy Jones warned would impact results for the year to June 2006. It has pinned its ambitions to become a national player on the Prohibition brand it acquired from Living Ventures in late 2005.

On a more positive note, the group revealed in January 2006 that a recent revaluation of its assets valued the estate at £80m, £14m above the previous valuation.

The company’s recent problems have made it a potential takeover target for Regent Inns, according to industry sources.