Ultimate Leisure Share Discussion Threads

[nghomi] 05/5/2005 18:05

Looks like that all of last few trades are buys. Hence, we will be heading north from now on. I will add a few more tomorrow...

[stevemarkus] 04/5/2005 12:49

I would think it more likely that URM would do so - ULG are not in the same market as JDW (nightclubs as opposed to pubs) - unless of course JDW wanted to diversify a little.

[nghomi] 03/5/2005 22:00

I think Market Makers are playing big games on ULG to say the least. Looking at JDW share price, it was up 3% today with PER of 17.5!!! ULG PER is now less than 9. Even compared with URM, ULG is under priced by 15% to 20%. With £53m assets, I would not get surprised if JDW or URM will make a bid for ULG. Does anybody see any reason that such a proposal would not be possible?

[wonder boy] 29/4/2005 14:36

well managed little company. looks fairly priced today but i expect it will continue to drift down in current markets. will keep this on the radar screen and hopefully pick some up sub 200p.

[koetser] 29/4/2005 14:36

Bad news comes in threes still one more to come in my count ...

[nghomi] 29/4/2005 13:37

I have topped up 2000 at 245p this morning. I am holding these for long term and I see today's drop as an excellent buying opportunity. The good news is that the "bad news" is out now and it can only go higher from here. If not, I am happy with ~3% yeild and long term growth prospects.

[whipround] 29/4/2005 12:45

Didn't think the update was too bad maybe a buying opportunity - marketmakers are b*stards.

[jeffian] 29/4/2005 11:05

Mystery solved, eh?! Well it goes to prove the old saying "Do as they do, not as they say" so far as Director sharedealings are concerned. Maybe the market authorities will be having a discussion with them about the remarkably prescient timing of their sales.

Regards, Ian

[phillis] 29/4/2005 08:08

Right on Nghomi!As I indicated on the other thread when management and Fidelity were exiting in late March, it was time to do the same.

[nghomi] 29/4/2005 07:50

Now we know why directors were selling!! I am expecting a sharp drop in share prices now. =====================================================================

Ultimate Leisure Group PLC
28 April 2005


Ultimate Leisure Group plc
28 April 2005

Trading Update

In the AGM statement of 22 October 2004 the Board of Directors of Ultimate
Leisure commented on the extremely competitive trading environment and in the
interim announcement of 24 February 2005 noted the lack of development
opportunities which met the criteria of the Ultimate Leisure business model.

This continuing competitive trading environment has resulted in the Directors
applying additional caution with regard to site selection and, as such, since
the interim announcement only one large leasehold site has been identified and
is nearing completion. It was originally anticipated that this site would be
trading from March 2005 but delays have meant this site is now expected to open
in December 2005.

Unfortunately there has also been further slippage in the development programme
of the other sites that were due to open during the second half of the financial
year, namely Blubambu (Cork), Chase (South Shields) and Jimmyz (Newcastle
Quayside). This, along with the impact of the increasingly competitive trading
environment, means that the Group will not meet market expectations for the year
to 30 June 2005.

At the interim announcement the group also noted the ever changing legislative
environment. In recent weeks it has become clear that certain sections of the
police, government and media have an agenda to attempt to force fast track
change of a drinking culture established over generations.

This agenda intensified earlier this year with a directive issued by the Home
Office to all police forces reminding them of existing powers granted to them
through the 2001 Criminal Justice and Police Act. We believe that these powers,
although welcome in principle, are being used arbitrarily and applied
inconsistently across certain licensing areas. This is creating uncertainty and
confusion for the trade as a whole and as a company we are being forced to
exercise even greater caution in terms of site selection and general trading.

Although this is believed to be positive for the Group in the long term, the
Directors believe that this will have a negative short term impact on the high
street bar and nightclub sector as customers become cautious about visiting city
centres.

With the reduced income from the delays in the new site openings, fully expensed
pre-opening costs, and taking into account recent trading, the Board expects
profit before tax for the full year to be slightly ahead of last years figure.

The development led business model of the Group means that achieving market
forecasts is dependant on the Group making several site acquisitions each year.
Notwithstanding the above the board remain confident that with the full year
effect of current year additions, and assuming that trading continues at current
levels, the Group will achieve significant growth during the year to 30 June
2006.

[nghomi] 26/4/2005 07:31

ULG chart is looking dreadfull at the moment. It looks that we are heading to 260p now. The problem is that nobody is buying ULG due to obvious reason that almost all directors have sold substantial part of their holdings. It is the decision time for holders whether to hold or sell now. We are approaching May after all!

[jeffian] 20/4/2005 12:16

0800,

Are you trying to tell us something you know about current trading, or are you just guessing/making it up? The last update on trading from the company itself said that the new bar in Cork was due to open in April 2005, that the new Leeds 'Halo' bar had opened and is trading in line with expectations and that the investment of £4m in the City Vaults and other Newcastle venues is "fully justified by the returns....and we are pleased with early trading from this site". The 'outlook' said: "the Group is in a position to continue to significantly grow the business both in the UK and Ireland and we remain confident of delivering our sixth successive set of record results."

Even if trading has taken a dive at individual outlets, it seems unlikely that Group profit as a whole will be significantly damaged in the light of the additional capacity coming onstream at Cork and Leeds. Most (all?) of the company's properties are freehold and gearing is low, so they are not crucified by the high fixed overheads of the rented bar chains and net assets (mostly freehold property) underpin the share price to the tune of 220p/share.

It still leaves the mystery of why so many Directors felt the need to sell their shares, but I have seen nothing in the public domain to support 0800's post above. If you can justify that statement, 0800, share your source with us!

Regards, Ian

[0800] 20/4/2005 11:32

May be a fairly simple answer to this..........the Rankin family have control of two companies, Ultimate and Metnor, both on aim. They seem to have concentrated their efforts over the past couple of years or so on Ultimate, and Metnor has suffered, over the past 6 months their efforts have focused on Metnor, which has improved over that time, also introduced a new strategy.
Trading may not be as well as some believe, with some bars in Newcastle and Durham now downtrading, not surprised that some have now bailed out

[whipround] 15/4/2005 12:50

Please see my note 359 for reasons why directors are selling and my supposition on the return to normal once elctioneering has passed. Govt trying to stop binge drinking which is how pubs make their money.

[jeffian] 14/4/2005 23:25

No I wasn't suggesting the price would hit 145-187. That was the range in which the share options were granted and the price they paid for shares which they immediately sold for £3+. My point was in relation to your comment that 'fair value' was 360p even without growth because, if the Directors agreed with you, why would they forego a further 20% gain? When I was in this position, the trick was to 'swallow the tail' (i.e. sell only enough option shares to take up the balance without actually having to put your hand in your pocket!) but this lot have mainly taken the money and run. That does not signify huge confidence on their part in the short-medium term share price IMHO.

Regards, Ian

[nghomi] 14/4/2005 21:56

jeffian,
Looking into the directors dealing in the last couple of months, I agree with you that something is fishy, as it appears that all of them are selling! In fact, Senior's today purchase is a fraction of what he sold last month.

Are you suggesting that directors think that the share price will hit 145-187p, hence they decided to cash before it goes under water? It could only be possible if ULG makes a loss in the second half of this financial year in my opinion. I will be surprised if it is the case, as they should make a profit warning as it has a material effect on the share price The fact that a director sells 100,000 shares indicates that ULG is not about to make a profit warning in the coming days. Otherwise the director would have been in "closing period" and he could not sell. On the other hand, the question of why all of directors have been selling remains a mystery.

[nghomi] 14/4/2005 12:29

I don't know ULG directors perosnally :-) but I know that some people view options as a bonus to their salaries. They will cash options as soon as it is a sizable bonus regardless how the company is doing! I know examples that share prices has more than three fold after a director excercised his options. Admittedly, it was in the dot com era :-).

[jeffian] 14/4/2005 11:33

I don't disagree with you, nghomi, but if the Directors were of the same view, why immediately dump shares acquired at only 145-187 via options? What's your take on it?

Regards, Ian

[nghomi] 14/4/2005 11:17

jeffian,
At historic PER around ~10 and historic div yield of 2.2%, ULG is not rated as growth company. I don't know what is your price target. With the excellent track record of ULG growth story, in my opinion, 360p is only a fair price if the company do not grow profit for the next couple of years.

[jeffian] 14/4/2005 10:46

Peart,

No panic, but you understate what has actually happened ("A director of the Company has sold a relatively small no of shares"). Actually, within the past few weeks, 5 Directors (Wynn, Senior, Atkinson, Bell & Elliott) have sold either all, or a substantial proportion of, their shareholdings. It must mean something.

Regards, Ian

[whipround] 14/4/2005 10:15

J Rankin sold at Christmas I seem to recall, seems to be panic regarding govt crackdown on binge drinking, should all return to normal after election frenzy and soundbites on getting tough on binge drinking and the causes of binge drinking.

[peart] 14/4/2005 09:55

A couple of Directors buying some more shares - Its just a bit of personal buying and selling going on that is all - the panic creates a sale on the stock - Fascinating to watch - imv!

[nghomi] 14/4/2005 09:35

Peart,
I agree that we are witnessing a dip here and it is bound to bounce back fairly quickly.

Shares Magazine (Page 28) has an article about Leisure and hotel sector. It has a "buy" recommendation for ULG on basis of Management skill and low gearing.

[peart] 14/4/2005 08:29

Just imho - sorry for 3 repeats - my little girl wanted to help!