UK Leisure Sector - Q3 2014

Click here to download the UK Leisure Sector - Q3 2014 PDF.

Summary

Q3 2014 has followed the previous six months of the year with increasing corporate activity from all segments of the UK leisure sector. Whilst the political parties may already be gearing up for the general election in May next year, any potential uncertainty which may arise from a change of Government does not appear to be lessening the appetite of investors in the UK leisure sector. 2014 is likely to deliver a vintage performance for corporate M & A activity.

Recently revised data from The Office for National Statistics confirmed that the UK economy grew 0.9% in Q2, with the economy surpassing its pre-recession peak in the third quarter of 2013, six months earlier than previously estimated. Whilst real term wage growth remains largely absent across the country, this has had the benefit of keeping inflation in check. The continued strength of Sterling, particularly against the Euro, has further increased overseas investor appetite for the leisure property sector, as foreign based buyers acquire iconic London leisure properties, demonstrated by the sale of the Gore and Pelham hotels to the Italy based family hotel group Starhotels.

Activity of this nature is well supported by improving, and in many cases, strong trading results from the UK's major leisure operators. Within Q3 Marstons reported a 4.1% rise in like-for-like sales in its destination and premium arm, whilst Fullers reported a 7.3% rise within its managed pubs and hotels division. Whitbread saw like-for-like growth of 9.2% at Premier Inn, and 7.3% at Costa. Travelodge also filed accounts during the period which showed the budget hotel chain moving back into profitability as turnover rose to £426 million. With improving economic and trading conditions and confidence from buyers and lenders, leading to more fluid lending, the level of transactional activity across the sector is likely to continue.

Contacts:

Graeme Bunn
Director
T. 020 7280 4740
E. graeme.bunn@fleurets.com

Martin Willis
Managing Director
T. 020 7280 4759
E. martin.willis@fleurets.com

Click here to download the UK Leisure Sector - Q3 2014 PDF.