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Ultimate Leisure

November 2002

Investing in shares may lose you all or some of your money. Past performance is no indication of future performance. Some of the shares recommended here may be small company shares, which can be relatively illiquid and hard to trade and this makes such shares more risky than other investments.

At the AGM, Ultimate reported trading in the first three months has been strong. In response to the shocks in the leisure sector, where companies have experienced short term cash flow problems and breached their bank covenants (SFI, Old Monk), Ultimate pointed out that the majority of its 24 sites are freehold. This protects it from rent increases and it is therefore better placed to weather weaker trading patterns. Borrowings were £16.4m at the end of last year but interest and rental  costs were covered 4.6x by operating profit. In the first quarter to 30 September, cover was 4.1x, despite this being traditionally the second weakest quarter.   There are twokey growth components for most pub retailers - new space and ...

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With small companies there is an above average degree of risk compared to buying blue chips. Please be aware that we have not assessed the suitability of any of these investments for you. The newsletter simply states a personal view and diarises the editor’s investment decisions. Please speak to your stockbroker or other qualified individual to ascertain whether any of these companies mentioned would form useful additions to your own portfolios. Past performance is no indication of future success.

All material on this website is protected by copyright. You may use Information retrieved from the www.scsw.co.uk website for your own personal non-commercial use which means that you may not sell or copy this information to any third party without prior written consent. ISSN 1358-183X

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