Tour Courses Increase Profits

PGA European Tour Courses have made a profit before tax of £1,207,000 for the first six months of the current financial year compared with £1,061,000 during the comparable period in 1999.

Turnover rose to £4,123,000 from £3,692,000 as the number of rounds of golf played on the company's courses increased to 141,000 from 122,000, generating an extra £261,000 in green fee income to a total of £2,634,000.

The net debt at 30 June 2000 was reduced to £2,282,000, and chairman Neil Coles said the company was well placed to expand.

Coles added: "The board is exploring the next phase of development, which would involve creatively working the existing portfolio of properties as well as searching for opportunities that are consistent with our strategy to add to it.

"At the beginning of May the 72-hole complex at Fleesensee was opened and at the beginning of June the new Marquess course at Woburn was unveiled.

"The operation at Woburn is undergoing a period of change. From a membership base of approximately 1,000 over two courses, numbers will gradually be increased to 1,500 following the opening of the third course, the Marquess."

W S Atkins have been engaged to advise on the development potential and investment opportunities for peripheral land around the facilities while pres.co are advising the company on how to exploit their on-line communications.

Continuing his assessment of the business, Coles continued: "There has been a significant improvement in the condition of Quinta do Lago resulting from the capital expenditure programme last year, particularly the installation of the new irrigation system. Demand for tee-times continues to increase and the facility was trading ahead of budget at the half year.

Some course improvements have been made since the half year and it is planned to renew the irrigation system on the Ria Formosa course late next year at a cost of approximately £500,000. The facility is scheduled to host the Algarve Portuguese Open in April next year.

"The planned improvements to the Kings course at Kungsangen were completed for the Scandinavian Masters, which returned there at the beginning of August. The enthusiasm for golf amongst the Scandinavians was shown by the attendance of some 85,000 in spite of poor weather during the week. Founder membership sales continue to be strong and there has been a significant increase in the number of corporate and society golf days compared with the same period last year.

"The profile of PGA Golf de Catalunya was enhanced by the hosting of the Sarazen World Open last year and the Peugeot Spanish Open in April this year. The numbers of casual visitors and groups visiting the course were ahead of budget in the first half of the year. Strong demand for tee-times since opening has brought forward the next phase of development." The site has outline planning consent for a second 18 holes, a hotel and 400 residential units while improvements to access are expected to cost around £250,000.

Coles went on: "An able team of people has been recruited to run Fleesensee Golf and Sports The whole resort opened at the end of April and trading has started well. All the partners are encouraged by the level of business that has already been generated and the current focus for the golf and tennis operation is to attract more of the hotel guests to use the facilities. Last month, the facility successfully hosted the TUI Golf Championship, a European Tour Seniors event.

"We stated in the last annual report that the company was holding discussions with a number of parties. These discussions were terminated when the company was made aware that its major shareholders were considering various restructuring proposals which may or may not lead to an offer being made by some or all of these shareholders.

"The board, having taken advice from Lehman Brothers, has been wholly supportive of the discussions amongst the major shareholders, which should provide the best basis for realising value for all shareholders. To date, however, no formal proposals have been received by the Company from any of its major shareholders.

"Pending resolution of these discussions, the Takeover Panel has advised the company that it must remain in an offer period."

Coles also announced that Roger Devlin, a director of Hilton International, has been appointed as a non-executive director.