Ultimate and Urbium prosper
Nightclubs and high-street bars have had a torrid time.
Customers are no longer scrambling for admission and those still around have cut back on spending, prompting a fierce price war. But amid the carnage a few have demonstrated that it is still possible to prosper. Although some chains have gone to the wall and others struggle, two groups in particular have continued their cheerful progress Ultimate Leisure and Urbium.
They have recently rolled out impressive profits and their shares, despite an uncertain stock market performance in the past few weeks, have enjoyed good runs. Yet the stock market attitude towards trendy drink chains remains sceptical. After all, it is still indignant after suffering three casualties. Old Monk, a smart pubs chain, and the Springwood nightclubs and venue bars group went belly up; SFI, known for its Litten Tree concept, merely staggers on, relying on its bankers for support and SFI shares remain suspended. Ultimate, operating mainly in the north-east and Ulster,produced interim profits of £4.2m against £3.3m and Urbium, famed for its Tiger Tiger outlets, made £3.5m against a reported £4.3m in the previous year.
On the surface, then, the groupsuffered a setback. But the earlier figure included a 17-week contribution from Chorion, an intellectual property businesstaking in such names as Noddy and Agatha Christie. The two operations went their separate ways in May 2002. There was, a year or so ago, some talk that Ultimate and Urbium would get together. But such speculation seems to have died. Certainly a merger would create a powerful force. Ultimate is the larger, with a stock market capitalisation of nearly £80m; Urbium is valued at £60m. For the full year, Ultimate should make around £8.7m with the Tiger Tiger group set for, perhaps, £5.5m this year.
Of course Urbium's big exposure to London makes forecasting difficult. It cannot be conducive to trading at its 16 West End outlets, to have the capital on terror alert following police warnings of likely atrocities. Chairman John Conlan, who used to run the First Leisure Corporation, is due to provide a trading update. Still, Urbium is in a confident mood. It has declared a maiden dividend; is doubling its presence to four outlets in the City of London (having acquired two from SFI) and is on the expansion trail in other parts of the country. Tiger Tiger which consists of nightclubs, bars, lounges and restaurants spread over several floors remains its flagship brand. It now has seven of them with the original, opened in London's Haymarket in 1998, achieving sales of £451,000 in a seven-day period in December.
Ultimate is also sitting pretty. It has plenty of ammunition to expand following a £20m cash-raising exercise last year. The two groups are already rivals. For example, Urbium has ventured into Ultimate's Newcastle-upon-Tyne heartland with a Tiger Tiger complex. As they expand, they will no doubt experience further confrontations.
