Playgolf Share Discussion Threads

[niggle] 10/11/2005 08:34

Posistive news, lets hope this takes off.

[currypasty] 10/11/2005 07:41

RNS Number:9170T
Playgolf (Holdings) PLC
10 November 2005



Playgolf Holdings Plc ("Playgolf")

Update

Playgolf is delighted to announce that its new facility at Northwick Park
officially opened on Monday 7th November. This is a landmark moment for
Playgolf, as this facility is the first of what it is intended will be a number
of urban golf centres that will be built throughout the U.K. over the next few
years. Playgolf has already received planning permission for the next centre in
East Kilbride. Construction of this site is expected to commence in 2006.

The opening is six weeks later than had originally been anticipated, and this
short delay, together with a weaker than expected performance at Playgolf Metro
as stated in the interim statement on 28 September 2005 (measures are being
taken to address this issue), will effect the financial results for the year
ending December 2005. This may be mitigated by the sale of corporate membership
to Northwick Park.

[currypasty] 25/10/2005 12:26

Luke herrons 'whats hot' site... i would paste but they are keen on their copyright.

[ali_b] 25/10/2005 12:22

currypasty who was it that tipped it

[currypasty] 24/10/2005 14:16

just been tipped as a 'speculative buy'

[currypasty] 13/10/2005 16:32

price flat for a bit now, i hope the next leg up will be soon !

[the_analyst] 10/10/2005 12:02

Glad I found this thread...

Got 10,000 today. Am a golfer, living not so far from the Trafford Centre and use the driving range on a regular basis (at least twice a week). It is a real money spinner. Often find myyself waiting for a bay to become available due to the evening mayhem. Golf on telly brings our the buddying Tiger Woods in their droves.

A very popular complex and I can't see any reason why other centres in the UK won't be just as successful.

This will take time but I look to put them away for a couple of years to fully realise the potential. Any one in to golf should see this as an exciting opportunity.

Regards

T_A

[currypasty] 28/9/2005 07:52

RNS Number:8365R
Playgolf (Holdings) PLC
28 September 2005


PLAYGOLF (HOLDINGS) PLC

REPORT AND FINANCIAL STATEMENTS

FOR THE PERIOD ENDED 30 JUNE 2005


PLAYGOLF (HOLDINGS) PLC

CHIEF EXECUTIVE'S REVIEW

FOR THE PERIOD ENDED 30 JUNE 2005

The results for the 6 months to 30 June 2005 show a loss of #317,000. These
results are broadly in line with expectations. The Manchester range was
satisfactory as was the Heaton Park operation. The results from the Metro range
in Barnet Copthall were below what had been hoped for, but measures are being
taken to turn this situation around.

Away from those current operations, which to a certain extent reflect the past
rather than the future direction of Playgolf, the position is very positive. The
balance sheet is healthy with net assets of #6,372,000, which equates to 13.3p
per share. On 16 September 2005, Playgolf raised #400,500 through a placing,
which will further improve the liquidity position and allow Playgolf to continue
to explore other business opportunities.

The new operation at Northwick Park is on schedule for an October 2005 opening.
The project has received widespread critical acclaim and, from a financial
standing, will strengthen Playgolf substantially. We received planning
permission for our new site in East Kilbride and signed a lease agreement with
the council just after the half-year end. Due to the size and location of the
site, East Kilbride offers some interesting financial opportunities that could
have a major bearing on the future shape of Playgolf. The Directors have valued
the site at #6,000,000 although having been acquired after the period year end,
is included in the accounts as a post balance sheet event. Playgolf will
continue to look at a number of other sites for further development.

Overall the future looks very bright. There are still some improvements to be
made to our current operations, particularly in the field of advertising and
sponsorship, and these are being investigated. Moreover, Playgolf as a company
is evolving from a driving range builder and operator into a multisport product
provider, based on golf, in large metropolitan urban areas. The key is that this
model is flexible enough to be adapted to enhance the financial returns from
each particular individual site.

[currypasty] 27/9/2005 08:54

At list..


The following hold 3% or more of the issued share capital of the Company:

David Andrew Christopher Piggins 24.9%
Hugh Lionel Wakefield Fox 22.5%
William Francis Frewen 16.2%
Funds managed by Close Investment Limited 12.7%
Hoodless Brennan & Partners 6.4%
MGL Nominees Limited 5.6%
Christopher Meadows 3.4%



RNS Number:3046P
Playgolf (Holdings) PLC
26 July 2005


26/7
Chris Meadows, Operations Director of Playgolf (Holdings) plc (the "Company")
yesterday sold 1,647,081 Ordinary Shares in the Company ("Shares") at a price of
15.5p per Share The Shares were placed with institutional and other investors.
Mr Meadows has resigned as a director, for personal reasons, with effect from
the end of the year. The board would like to thank him for his contribution to
the Company and wish him well.


Looks like there is plenty of institutional support to me !


Up another penny today !

[mryesyes] 25/9/2005 12:51

Hmmmm I would say this turns on the directors and their intentions over floating.
If as I fear there is no long term commitment to the PLC, but that it is basically to them a "source of funds" there will be problems ahead.
Anyone know how many director shares exist after Meadows sellout?
If they do not invest but intend periodic inflows of money from PLG rather than waiting for profits then best bet is wait for another opportunity

[dr jekyll] 24/9/2005 09:33

Well I saw this in the IC and followed up by finding this thread only to discover that yet another thread with an interesting co. has been started by currypasty. I play golf and have read about the concept of creating "signature holes" which is to the uninitiated a hole replicated from a partic. famous course e.g. Augusta. See previous informative posts above. This is a terrific idea which should really catch on imo and will encourage people to play golf. Playing in an hour has advantages too because a big negative for normal golf if you wish to play 18 holes can be the time it takes to get round. Not everyone has 4-6 hours spare but they may well enjoy playing for a much shorter time, esp. less fit people e.g. some elderly players. There are many other poss. advantages of course re just the golf, not to mention the overall potential of the co. Very interesting.

Dr J

[currypasty] 16/9/2005 07:58

RNS Number:3540R
Playgolf (Holdings) PLC
16 September 2005


Playgolf Holdings Plc (the 'Company')

Placing of Shares

The Company is pleased to announce that it has placed 2,225,000 new ordinary
shares with institutional investors at a price of 18p, raising #400,500 before
expenses. The placing has been effected to satisfy institutional demand for the
Company's shares and the proceeds will be used to provide the Company with
further working capital, allowing it to develop its sites at Northwick Park and
East Kilbride and to develop new opportunities for the Company. Application has
been made for these shares to be admitted to trading on AIM on 19 September
2005.

[shadowchaser] 31/8/2005 20:05

PLG---
It's taken a month --but the rise has begun by the look of it -

-A sound well run firm !

-SC

[currypasty] 31/8/2005 15:59

come on baby , go, go ,go

[currypasty] 26/7/2005 17:12

RNS Number:3046P
Playgolf (Holdings) PLC
26 July 2005



Chris Meadows, Operations Director of Playgolf (Holdings) plc (the "Company")
yesterday sold 1,647,081 Ordinary Shares in the Company ("Shares") at a price of
15.5p per Share The Shares were placed with institutional and other investors.
Mr Meadows has resigned as a director, for personal reasons, with effect from
the end of the year. The board would like to thank him for his contribution to
the Company and wish him well

[affc21] 21/7/2005 20:38

So from the Daniel Stewart note (above):

Playgolf (PLG) is conservately forecast to make 2.5p EPS in 2006 and 4.3p EPS in 2007.
Which would put PLG on a PE ratio of 6.5 for 2006
and for the following year on a PE ratio of less than 4 for 2007,
based on the share price at 16.5p (21.07.05.).


Year Turnover EBITDA DS&C PBT* Tax DS&C EPS* DPS EV/EBITDA PER Yield
End (£000) (£000) (£000) (%) (p) (p) (x) (x) (%)
12/04A 2,358 -174 -534 3 -1.5 0 N/A N/A 0
12/05E 3,166 336 -371 0 -0.8 0 31.3 N/A 0
12/06E 5,997 1,944 1,193 0 2.5 0 4.3 6.0 0
12/07E 8,049 2,816 2,290 10 4.3 0 2.1 3.5 0

* pre goodwill amortisation and exceptional charges.

[shadowchaser] 21/7/2005 20:37

PLG --I like this stock.
I also like playing on the Heaton Park golf course although the absence of electric carts make it a physically wearing experience owning to the undulating terrain .
However,the splendid classical features, [or rather mock palladian follies!] and general 'stately home' atmosphere is quite charming .

The share price is due for a rise IMO.

-SC

[affc21] 21/7/2005 18:22

Continued from note above:

We believe that the assumptions above are fair given the analysis of the company's existing operations. For example, we estimate that the Northwick Park driving range will have a 35% usage, equating to 10.8m balls hit per annum. This is relative to the Trafford Park range in which +12m balls were hit in 2003, in an area where golf has a lower penetration of consumers than Greater London.
Crucially, the urban golf centres do not rely heavily on any one source of revenue and this diversity of income should ensure that the financial risks are diminished to comfortable levels for a new venture. We believe that the centres offer material upside for Playgolf and should benefit further if the company can successfully monetise the number of consumers using the facilities by cross-marketing into the retail and F&B outlets from the golf-related operations, and vice versa.
Figure 5: Breakdown of sales by source – Northwick Park Year 1 estimate 25%23%17%15%7%7%5%1%Golf courseRangeGolf schoolRental incomeBaseball cagesGolf practice areaCorporate eventsSponsorship/advertising Source: Company, Daniel Stewart
Forecasts
Our forecasts assume Northwick Park will open in October 2005, followed a year later with the opening of the site in East Kilbride (Q4 2006). We do not include any other potential openings, although we believe the company should be successful in securing the land and planning permission for at least one further operation prior to the end of our forecast period in December 2007.
With regards the East Kilbride model relative to Northwick Park, the revenues and profits are marginally lower (lower pricing in Scotland
against London, reduced rental income, fewer baseball cages etc). We also estimate that the costs of the development could be nearer £8m due to the additional football pitches (11 five-a-side pitches) and premium health club. Under these assumptions the cash payback would be c.4.8 years. However, Playgolf is planning to sell the football and health club assets prior to their actual build, and has stated this morning that it has commenced discussions regarding a sale. This should ensure that Playgolf is able to recoup the vast majority of its £8m potential outlay prior to any development work taking place. Clearly, the cash payback would therefore be equivalent to zero days.
Figure 6: Forecast figures for Playgolf (Y/E December)
£000
FY04A
FY05E
FY06E
FY07E
Turnover
Heaton Park
477
506
531
552
Trafford Park
968
1,137
1,273
1,375
Northwick Park
0
518
2,726
3,074
East Kilbride
0
0
382
1,908
Barnet Copthall
914
1,005
1,085
1,140
Total turnover
2,358
3,166
5,997
8,049
% change
Gross profit
1,493
2,425
4,781
6,437
% margin
63.3%
76.6%
79.7%
80.0%
Operating profit
-432
-136
1,420
2,323
Operating margin
-18.3%
-4.3%
23.7%
28.9%
EBITDA
-174
336
1,944
2,816
% margin
-7.4%
10.6%
32.4%
35.0%
Interest
-206
-236
-227
-33
Exceptionals
119
0
0
0
PBT (pre-exc's & goodwill)
-534
-371
1,193
2,290
Tax
16
0
0
-229
PAT
-518
-371
1,193
2,061
Fully diluted shares (m)
35
48
48
48
EPS (p)
-1.5
-0.8
2.5
4.3
Source: Company, Daniel Stewart
Conclusions
Playgolf is now moving into the key stage of its development as a leading UK golf facilities operator. Following a delay to the opening of the original site at Northwick Park, the company is on track to commence trading in September 2005. Furthermore, the company has successfully negotiated terms on a second site in East Kilbride. These ventures are forecast to deliver a material uplift in group revenues, driving profitability in FY06.
On our current forecasts the shares are significantly undervalued. Although there are considerable risks to our forecasts (on the upside as well as downside) given the lack of detailed knowledge as to the potential market size of consumers visiting the new sites (as well as potential monetisation of each visitor in terms of cross-selling into the many different facilities on offer), we believe that our forecasts are suitably conservative. We have established a number of assumptions based on the company's existing assets offering golf ranges, golf courses and F&B operations.
Our estimates indicate that Playgolf should turn PBT positive in FY06, delivering EPS of 2.5p. This equates to a P/E of just 6.0x, dropping to 3.5x in FY07. We believe that, even if one factors in an element of risk associated with our forecasts, this considerably undervalues the company. Furthermore, with minimal debt requirements for the ongoing project developments (the East Kilbride capital required should be recouped prior to any work taking place due to the pre-sale of the health club and football assets), the shares stand on a projected 4.3x EV/EBITDA to FY06.
It should also be noted that the current NAV of the company (FY04) is 14p/share, representing a price/book ratio of just 1.07. Although the realisation of this value may be difficult in the short term (the market for buyers of urban golf centres is unknown), we feel that this serves as a base to underpin the shares prior to the forecast shift to group profitability next year. Furthermore, the value of the assets should appreciate materially on opening of the sites as the current value does not factor in the upside from securing long leases (+100 years) on prime land that the company secured at zero cost.
Based on our forecasts, projections for the continued development of its golf, leisure and retail parks, plus the asset-backed nature of the operations, we have a Buy recommendation on Playgolf.
Sector
AIM: Leisure
UK operator of golf courses and driving ranges
Profit & Loss Forecast
Year To:
2004A
2005E
2006E
2007E
December
£000
£000
£000
£000
Turnover
2,358
3,166
5,997
8,049
Gross costs
-865
-741
-1,216
-1,612
Gross profit
1,493
2,424
4,781
6,437
Admin expenses
-1,925
-2,560
-3,361
-4,114
Operating profit
-432
-136
1,420
2,323
Operating profit margin
-18.3%
-4.3%
23.7%
28.9%
Interest
-206
-236
-227
-33
Exceptional
119
0
0
0
FRS 3 PBT
-519
-371
1,193
2,290
DS&C PBT
-534
-371
1,193
2,290
Tax
16
0
0
-229
Earnings attributable
-503
-371
1,193
2,061
Av. No of Shares - basic (m)
35
48
48
48
Av. No of Shares - diluted (m)
35
48
48
48
DS&C EPS (basic)
-1.4
-0.8
2.5
4.3
DS&C EPS (diluted)
-1.5
-0.8
2.5
4.3
EPS growth rate (%)
N/A
N/A
N/A
+73
DPS
0
0
0
0
Dividend cover
N/A
N/A
N/A
N/A
Cash Flow Forecast
Year To:
2004A
2005E
2006E
2007E
December
£000
£000
£000
£000
Operating Profit
-432
-136
1,420
2,323
Depreciation
155
471
524
493
Amortisation
103
0
0
0
EBITDA
-174
336
1,944
2,816
Exceptional
118
0
0
0
Working Capital
-284
12
18
30
Tax Paid
0
0
0
0
Gross Cash Flow
-458
348
1,962
2,846
Cash interest
-205
-236
-227
-33
Net Capex
-455
-7,500
-7,500
-500
Free cash flow
-1,118
-7,388
-5,765
2,313
Dividends paid
0
0
0
0
Net acquisitions & disposals
-1,965
0
8,000
0
Share issue/financing
4,094
7,500
0
0
Change in cash
1,011
112
2,235
2,313
Non-cash movements
-2,633
0
0
0
Opening cash (debt)
-1,806
-3,428
-3,316
-1,081
Closing cash (debt)
-3,428
-3,316
-1,081
1,232
Key Events
Jan 2004 – Acquired Golf Learning Centres
June 2004 – Acquired Work for Fun
June 2004 – Disposed of holding in Playgolf (Calverly)
July 2004 – Float on AIM, raising £1.99m (gross)
September 2004 – Commenced building of Northwick Park
June 2005 – Announced deal for East Kilbride site
Major shareholders
% of Ord. Share Capital
D Piggins
24.9%
H Fox
22.5%
W Frewen
16.2%
Close Asset Management
10.8%
McDonald Glencross
5.6%
C Meadows
3.4%
Singer & Friedlander
3.1%
Hoodless Brennan
3.1%
Total
89.6%
Source: Report &Accounts / UK-Wire / Argus Vickers
Growth Rates
Year To:
2004A
2005E
2006E
2007E
December
(%)
(%)
(%)
(%)
Sales
64
34
89
34
EBITDA
190
N/A
479
45
Operating profit
415
N/A
N/A
64
DS&C PBT
308
N/A
N/A
92
DPS
N/A
N/A
N/A
N/A
Movement on net assets
Year To:
2004A
2005E
2006E
2007E
December
£000
£000
£000
£000
Opening net assets
4,643
6,689
6,318
7,511
Retained Profit
-502
-371
1,193
2,061
Share Issue
2000
0
0
0
Other adjustments
548
0
0
0
Closing net assets
6,689
6,318
7,511
9,572
NAV per share (p)
14.0
13.2
15.6
19.9

[affc21] 21/7/2005 17:57

Brokers (part) note for Playgolf (PLG):

Daniel Stewart & Company

Morning brief
Playgolf
20 July 2005
PLG.L
15p
BUY
Playgolf is an innovative and experienced operator of golf-related operations across the UK. The company has established a platform of operations principally associated with golf ranges and courses. However, the real driver of future corporate growth has been Playgolf's development of an efficient operating and financing model surrounding its'urban golf centres', incorporating golf, retail and conference facilities. The first centre is due to open in October this year, with the second development, announced this morning, due to commence operations in Q4 2006. These centres are forecast to drive substantial growth in profitability and we estimate Playgolf will show its maiden PBT in FY06.
• Playgolf's shares have drifted since their IPO in June 2004. Although the investment community has been slow to reaffirm the attractive financial prospects behind this operation ahead of its imminent opening, the wider golfing and media communities have taken a keen interest in the project. Essentially, the 'golf-in-an-hour' concept is revolutionary and offers a brand new concept to existing golfers (a chance to play six exceptional golf holes) and those looking to take up the game (inexpensive opportunity to learn their skills in the range/school prior to playing).
• Crucially, the urban golf centres are not simply a creative new golf development, they also offer substantial returns on capital and we envisage cash payback on the Northwick Park site after a little more than three years. Furthermore, Playgolf securitised the future revenues from its retail, catering and conferencing partners in order to attain attractive rates on its debt funding.
• Playgolf stands at an exciting period of its development and is due to open the doors to consumers on its first golf centre on 1 October 2005. This should reaffirm the qualities of its operating and financial model. There has been a relatively long lead-time to profitability, but the company is forecast to drive growth from its new venture and deliver further upside from the completion of its Scottish site in 2006. Investors have had to wait patiently for the promised returns, but they are imminent and the shares offer highly attractive upside from current levels. Forecasting a new venture carries risks (on the upside as well as downside) but, at 6.0x projected earnings to FY06, we rate the shares as a Buy.
Daniel Stewart acts as Nominated Advisor and Broker to Playgolf
Market Data
Listing
AIM
Sector
Leisure
Market Cap
£7.2m
Enterprise Value
£10.6m
12-month high/low
19p/11p
Next results
Nov '05
Source:DS&C/Proquote
Company Statistics
Shares in Issue
48m
Dividend yield
N/A
Net debt
£3.4m
Interest cover
1.0x
Source:DS&C/Proquote
Share price performance
Source; Bigcharts.com
Analyst
James Hollins
020 7847 0386
[e-mail]
Year
Turnover
EBITDA
DS&C PBT*
Tax
DS&C EPS*
DPS
EV/EBITDA
PER
Yield
End
(£000)
(£000)
(£000)
(%)
(p)
(p)
(x)
(x)
(%)
12/04A
2,358
-174
-534
3
-1.5
0
N/A
N/A
0
12/05E
3,166
336
-371
0
-0.8
0
31.3
N/A
0
12/06E
5,997
1,944
1,193
0
2.5
0
4.3
6.0
0
12/07E
8,049
2,816
2,290
10
4.3
0
2.1
3.5
0
* pre goodwill amortisation and exceptional charges.
Source: Daniel Stewart & Co.
2004 results
Playgolf remains at a relatively immature stage of its development in terms of profitability. We do not envisage EBITDA breakeven until H2 2005, with annual positive PBT from FY06.
The FY04 results reflect this scenario and Playgolf reported an operating loss before interest and tax of £432k. Despite substantial revenue growth (+64% relative to FY03), due principally to the acquisition of the Barnet Copthall operations in January 2004, Playgolf saw an increase in losses before tax (pre-exceptionals and goodwill) from £131k to £534k. The minimal tax income (inflow of £16k) and share issue at the time of the IPO equate to annual loss per share of –1.5p.
Figure 1: Playgolf results
£000
2003
2004
% change
Turnover
1,436
2,358
+64.2
Gross profit
912
1,493
+63.7
Operating costs
-996
-1,922
+93.0
EBIT
-84
-432
+414.3
EBIT margin (%)
-5.8%
-18.3%
+12.5% pts
EBITDA
-60
-174
+190.0
Interest
-47
-206
+338.3
PBT (pre-exceptionals & goodwill)
-131
-534
+307.6
Tax
0
16
Tax rate (%)
0.0
3.0
Fully diluted shares (m)
34.9
EPS (pre-exceptionals & goodwill)
-1.5p
Source: Company, Daniel Stewart
It has been a busy year for Playgolf in terms of corporate activity. On top of the ongoing development of Northwick Park, plus the negotiation with several UK Local Council's (concluded successfully with South Lanarkshire, as announced today), Playgolf has also completed several transactions aimed at cleaning up the corporate structure and driving profitability;
Figure 2: Playgolf corporate activity FY04
Date
Transaction
Jan 2004
Acquired 100% of 'Golf Learning Centres' (Metro Golf) through intermediary company Playgolf (Barnet Copthall) for cash of £2m plus issue of 350,858 shares
June 2004
Acquired 100% of 'Work for Fun' via the issue of 1.67m shares. Created goodwill of £7.2k (Work for Fun owns 26% of Playgolf Trafford and 26% of Playgolf Northwick Park)
June 2004
Disposed of 50% holding in Playgolf (Calverly) to directors Piggins and Fox for £50k
July 2004
Issued 11.8m shares at 16.67p at AIM listing, raising £1.99m
July 2004
Acquired 10% minority interest in Playgolf Limited for 899.7k shares
Source: Company, Daniel Stewart
These activities have created a clearer organisational structure, focused primarily on the development of it golf and retail parks (Northwick Park and East Kilbride), also further enhancing its sales and margin within its other golf operations.
Figure 3: Playgolf divisional structure
Division
Operations
Northwick Park
Opening autumn 2005, will have a two-tier range (60 bays), a 6-hole golf course consisting of leading signature holes, a short-game academy, adventure golf, a substantial golf school, nine baseball cages (there are 350 baseball teams in London), retail facilities, a restaurant and conferencing.
Playgolf has a 99-year lease with the local authority that expires in 2101. The facilities are assumed to open 1 October, with c.30 staff (possibly higher at start).
East Kilbride
Planned opening Q4 2006, will have a two-tier range (60 bays), a 6-hole golf course consisting of leading signature holes, a short game academy, adventure golf, a substantial golf school, three baseball cages, retail facilities, a restaurant and conferencing. It will also have a premium health club and 11 five-a-side football pitches (these operations are due to be sold to a third party prior to development of the site)
Trafford Park
Was built in a JV with Peel Holdings (injecting £1.3m each) and have a 25+25 year lease.
Trafford consists of a two-tier range and opened December 2000. The lease is structured so that Playgolf should benefit from upside in asset value if the development is sold. The company is forecast to pay c.£250k p.a. of rent for the next 5 years, on condition of building an adventure golf area. It has a leading coaching facility, a JJB superstore, conferencing facilities and a sports bar/café.
Barnet Copthall
This was acquired from Metro Golf for £2.6m (£2.15m in cash and the remainder in shares) in January 2004. The operation has operated since 1997, and was run by Chris Meadows who now performs the same role for Playgolf. Barnet Copthall has a two-tier range (48 bays), a golf school, a 9-hole academy course, a pro-shop and a popular local Italian restaurant (Metro Piazza) on the site.
Heaton Park
Playgolf's nine-year contract with Manchester council commenced in 1996 (extended to 20-years in 1997), and the company has a revenue share arrangement with the council. There is an 18-hole course (£10-14 per round) and 18-hole par 3 (£4-6 per round), a teaching academy and a bar/restaurant. There are c.35k rounds played per annum.
Playgolf Holdings
Holding company that pays management fees, expenses, salaries, legal fees, audit fees etc.
Source: Company, Daniel Stewart
Strategy
Following a progressive expansion of the company's golf-related businesses, Playgolf is focusing on incremental sales and marketing growth within these divisions, but principally is looking to further develop its 'golf-in-an-hour' concept, combined with further golf, retail and F&B facilities.
Further Local Council sign-ups
Playgolf is searching across the UK to sign-up similar deals to that achieved with the Local Councils backing the Northwick Park and East Kilbride sites. The announcement this morning states that Playgolf is at 'well advanced' stages of discussions regarding a number of sites. Essentially, the company requires council approval to develop +40-acre sites (excluding the additional sports arenas which requires a larger site) on waste or under-utilised land that Playgolf will regenerate with attractive, green space. Furthermore, the councils benefit from rental income and provide a service to their residents that would have cost them time and money to develop. We believe that this attractive combination of benefits to the councils at zero cost and positive cash inflows should ensure that the number of potential sites for Playgolf is high. This should be further accentuated when Northwick Park is open and councillors can witness first-hand the creative use of space.
Financing strategy
With its Northwick Park and East Kilbride sites, Playgolf has established a highly cost effective method by which it can finance the golf, leisure and retail parks. The key element behind the company's efficient cash and working capital requirements is that it locates sites for which it does not have to pay for the land. As alluded to above, Playgolf takes its schemes to Local Councils and offers to make use of land for which the council would not have ordinarily received income. With this bargaining power, Playgolf ensures that it can secure use of the land for zero initial outlay.
In terms of financing the build work, management has acted commercially and effectively securitised the future revenues from the retail, F&B and conferencing rentals (Playgolf receive minimum base rentals and a revenue share). Under this scheme the banks loan Playgolf substantial capital that is covered by the sub-tenancies and equates to a level from which Playgolf has access to 100% of the development costs.
Costs and revenue model
We estimate that the costs associated with developing the entire Northwick Park site are c.£6.75m. However, the company estimates that the initial valuation of the land (plus planning permission) is c.£3m, thus creating an asset with a final valuation, on build completion, of c.£9.75m. This material uplift in NAV provides a base that underpins the attractiveness of the shares as an asset-value play as well as a growth company.
Clearly, as new sites are built, the operating margin should incrementally increase as central overheads are kept to a minimum. However, due to the disparate geographic location of the company's existing and forecast asset base, central overheads reflect only a small proportion of group costs.
Our financial projections for the company's golf and leisure parks are detailed below, utilising Northwick Park as an example. The figures work on a number of assumptions, many of which will not be finalised until the site is fully operational (demand for golf lessons etc). However, the model provides a clear presentation of the potential profitability and cash returns on each new investment. We estimate that the Northwick Park site will show a ROIC of 33.3% by year three (up from 29.5% in year two). Cash payback is estimated at 3.13 years (month two of year four).

[affc21] 21/7/2005 17:45

Daniel Stewart & Company

Broker Comment
20 July 2005

Playgolf Holdings
PLG.L 15.25p; £7.3m BUY
Playgolf Holdings has acquired a 100-acre multisport site at East Kilbride in South East Glasgow. A 125-year lease has been signed with South Lanarkshire Council and full planning permission has been received to build a driving range, a 6-hole golf course, retail and conference facilities and additionally a 250,000 square feet indoor sports arena. This will be one of the UK's biggest sports centres. The lease will be financed from a share of future revenue from the site. Playgolf has commenced discussions to sell the rights to the indoor sports arena to a third party. We believe this in it self will cover the estimated £8m cost of development.

[affc21] 21/7/2005 17:40

The Stockmarket Reporter

From UK-Analyst.com: July 20th 2005

Playgolf Holdings saw its shares improve 1p to 16.25p as the London and Manchester-based owner and operator of golfing facilities, said that it had acquired a new 100-acre multi-sport site at East Kilbride in South East Glasgow. The company said that a 125-year lease had been signed with South Lanarkshire Council and full planning permission has been received to build a driving range, a top quality 6-hole golf course together with retail and conference facilities, in addition to a 250,000 square foot indoor sports arena. Consideration for the lease comprises a share of future revenue from the site. The business will continue to be loss making over the next year but revenues should benefit from the opening of Northwick Park this October. Broker Daniel Stewart is forecasting a jump in turnover from 3.1 million pounds in the year to December 2005 to 5.9 million pounds in 2006 and rated the stock as a "buy" at 15p.

[currypasty] 20/7/2005 16:08

RNS Number:0796P
Playgolf (Holdings) PLC
20 July 2005


Playgolf Holdings plc

Playgolf Holdings plc ("Playgolf"), the owner and operator of golfing facilities
in London and Manchester, has acquired a new 100-acre multisport site at East
Kilbride in South East Glasgow. A 125-year lease has been signed with South
Lanarkshire Council and full planning permission has been received to build a
driving range, a top quality 6-hole golf course together with retail and
conference facilities and additionally a 250,000 square feet indoor sports
arena. This be one of the UK's biggest sports centres. Consideration for the
lease comprises a share of future revenue from the site. Playgolf has commenced
discussions to sell the rights to the indoor sports arena to a third party.

The acquisition of East Kilbride represents a new milestone for Playgolf.
Construction is due to begin in the next three months.

Playgolf regard East Kilbride as a natural extension of the award winning urban
golf centre model currently being built at Northwick Park in North West London
that has received such acclaim and is due to be opened on 1st October this year.

With the success of the London Olympic bid we believe that Playgolf is in a
unique position to fill the undoubted dearth of public multisport sites around
Britain and cater to the wave of sporting enthusiasm that will be generated as
2012 approaches. Playgolf is already in discussions about a number of future
sites and some of these discussions are well advanced. The medium term future
looks very positive as Playgolf develops its position as the major constructor,
in association with local government, of the kind of public sporting facilities
that are appropriate in Britain in the 21st century.

[mryesyes] 29/6/2005 18:29

A buy at 10-12p sure; now I'm no chartist but I don't think that chart is headed up right now is it?