Clubhaus results
Clubhaus plc has announced unaudited interim results for the six months ended 31 March 2002.
Key points:
Financial restructuring successfully completed in May
Core UK Country Club business performed satisfactorily with increase in membership sales in spite of uncertainty with restructuring
New UK membership sales from January through to March totalled over 4,400, an increase of over 15% from the start of the calendar year
Trading conditions remain tough in continental Europe
Chesfield Downs, standalone golf club, sold for £3.9m in February
Progress made on further non-core disposals before the end of the calendar year

Financials:
Turnover at £14.9m
Gross profit at £6.8m
Operating loss of £4.1m
Loss before tax of £9.6m
Basic loss per share of 9.3p

Results of restructuring:
pro-forma net assets of approximately £19.4m,
new 7 year facility with Barclays Bank
reduced debt burden of approximately £60m (approximately £110m before restructuring)
significant reduction in weighted average cost of debt

Charlie Parker, the Managing Director of Clubhaus, commented: “The performance and potential of the UK Country Club business has allowed the Group to come out of the restructuring process in a much improved position. Assuming the non-core asset disposals can be completed the financial position will be further improved and the true value of the core Country Club business can be realised.”

Robert Bourne, the Chairman, said:
Trading review and prospects
The restructuring process dominated the period under review. In terms of trading the UK Country Clubs performed satisfactorily despite the uncertainty that surrounded the restructuring. Head office overheads have been reduced and there have been encouraging membership sales and retention figures. Trading in continental Europe has again been disappointing and the disposal of these assets is a priority for the Group.

Asset values have been reviewed in terms of the market conditions, offers received for the disposal of the non-core assets and trading results. While the performance of certain clubs is not yet satisfactory, no provision for impairment is considered necessary at the half year. A valuation of the assets was performed in September 2001.

Restructuring
As shareholders will be aware the restructuring of the Company’s finances was completed on 17 May 2002, following the passing of all resolutions at the EGM held on 8 May 2002. The resolutions put to the EGM concerning the restructuring were passed with a majority vote in favour by ordinary shareholders representing approximately 99% of all shareholders who voted. The results covered in this review are for the six months period ended 31 March 2002 and include a pro forma balance sheet to highlight the effects of the restructuring on the Company’s reserves and net asset position.

The restructuring was a long and difficult process, which has provided the Company with an opportunity to move forward and fulfil its strategic objectives. The specific terms of the restructuring were detailed in the circular sent to shareholders on 12 April 2002. The main terms were the conversion of £45 million of bond liability and approximately £7.5 million of accrued interest into new ordinary shares at a conversion price of approximately 7 pence per new ordinary share. In addition the outstanding £7.6 million redeemable preference shares were redesignated as new ordinary shares at a conversion price of 10 pence per new ordinary share and the outstanding dividend of £380,000 was settled by the issue of new ordinary shares on the same conversion terms.

The Group, following the successful conclusion of the restructuring, has pro forma net assets of approximately £19.7 million, a new 7 year bank facility with Barclays Bank, a reduced debt burden in the shape of the remaining £15 million senior notes, and improved cash flows in terms of the greatly reduced interest costs attached to the senior notes. In addition the Company has embarked upon a programme of non-core asset disposals which, when completed, will further improve the gearing profile of the Company and the prospects for future growth and development.

The costs involved in the restructuring will eventually total approximately £3.1 million. Of this figure, approximately £1.4 million was either paid or committed at 31 March 2002 and therefore expensed, influencing the overall results for the period.

Board changes
On 3 May 2002 Baron Alexander Von Spoercken resigned from the board. As a consequence of the restructuring becoming effective, Mr Guy Buckley resigned from the board on 17 May 2002.

In addition Mr Rupert Horner resigned from his post of Finance Director on 8 May 2002, and I would like to thank him for his sterling efforts during the restructuring process.

In line with the statement I made in the circular sent to shareholders on 12 April 2002 I have great pleasure in announcing that Mr John Hume has agreed to become non-executive Chairman of Clubhaus with effect from today. Mr John Hume is a City based solicitor with 32 years of experience and a separate announcement will follow today. I will remain as a non-executive Director of the Company.

Strategy
The immediate strategy for the Group has two clear goals. Firstly, we intend to continue to focus on the UK Country Club business and to improve the returns from these clubs. Performance of these businesses has continued to encourage both in terms of membership sales and secondary spend whilst efforts to reduce overheads and improve margins have also been successful.

Secondly, the level of gearing and the under performance of the Group’s other assets has reinforced our determination to dispose of these assets. Whilst no sale contracts, except for Chesfield Downs, have yet been completed, we have made good progress towards our objective of realising substantial disposal proceeds before the end of the calendar year.

Staff
During what has been an enormously difficult time for our staff they have continued to perform with great spirit, enthusiasm and determination. It really is a great credit to all of them that the performance of the clubs has improved over the previous year despite the restructuring process and attendant publicity.

Conclusion
The performance and potential of the UK Country Club business has allowed the Group to come out of the restructuring process in a much improved position. Assuming the non-core asset disposals can be completed, the financial position will be further improved and the true value of the core business can be realised.

Robert Bourne, Chairman, 28 June 2002

Charlie Parker, the Managing Director, said:
Introduction
The period under review was dominated by the restructuring process. Efforts were focused primarily on saving the Group from insolvency. This objective was achieved with the support of the shareholders, the preference shareholder, the bondholders and the Group’s bankers. The continuing promise shown by the trading results of the UK Country Club business helped the objective to be reached and gives encouragement for the future. In addition, during these difficult times, the efforts of the staff, combined with the support of the Group’s suppliers and customers has helped provide a satisfactory outcome.

Financial Results
Membership subscriptions continued to increase during the period providing the Group with a monthly income stream of approximately £1.29 million, of which £1.11 million relates to the UK and £0.18 million relates to Europe. Sales of new memberships in the UK from January through to March totalled over 4,400, an increase of over 15% from the start of the calendar year. Overseas trading continued to disappoint from a cost perspective although overall membership subscriptions showed healthy increases. The Group’s central overhead has been rationalised with the full benefit of these savings accruing in future financial periods.

Due to the change in year end, the actual and comparative results are for the six months ended 31 March 2002 and 30 June 2001 respectively. The seasonality of the businesses would thus lead to variances between the two periods.

Exceptional items
The costs of the restructuring have been classified as exceptional and separately disclosed. Those costs incurred up to and committed as at 31 March 2002 total £1.4 million. In addition the pro forma balance sheet shows a further £1.7 million of costs, including an element that was contingent on the success of the restructuring. These costs will be split between exceptional costs and reserves at the end of the financial year in accordance with applicable accounting standards.

FRS 19 “Deferred Tax”As a result of a change in accounting standards, the board has adopted FRS 19 “Deferred Tax” in the period.

Borrowings
Following the restructuring, the Group’s indebtedness mainly consists of the new medium term loan provided by Barclays Bank of £41 million; four smaller bank facilities both in the UK and Europe totalling approximately £6.8 million; finance leases totalling approximately £1.6 million and the remaining bonds of £15.0 million.

Disposals
In line with the strategy of focusing on the core UK Country Club business, the Group disposed of Chesfield Downs golf club during the period for £3.9 million.

Since the balance sheet date good progress has been made on the disposal of further non-core assets. We are hopeful that a significant portion of the proceeds from these disposals will be received before the end of the calendar year.

Dividend
No interim dividend is proposed.

Annual General Meeting
The Company’s sixth Annual General Meeting will be held at 10.30am on 30 July 2002 at the offices of Ashurst Morris Crisp, Broadwalk House, 5 Appold Street, London, EC2A 2HA. A notice of the annual general meeting will be sent to holders of ordinary shares together with a copy of the interim results.

Conclusion
The quality of the UK business built up over the past few years has allowed the Group to emerge from the restructuring process with an opportunity to finally realise the value inherent in the Country Club concept and the performance of the assets. The commitment of all parties to achieving a solution saving the Group will hopefully be rewarded by its performance over the next few years. Much work remains to be done but there are encouraging signs for the future.

Charlie Parker, Managing Director, 28 June 2002