he purchase of the high profile site from United Leisure was completed for a nominal £1 (us$ 1.65) plus net liabilities totalling us$ 5.45 million. It brings the total number of Adult Gaming Centres (AGCs) in the Praesepe estate to 41 and provides the group with a flagship venue in central London.
Under the terms of the transaction Praesepe has acquired the entire issued share capital of United Leisure and its assets comprising the leasehold, 114 gaming machines and other operating plant and equipment. United Leisure generated revenue of us$ 2.98 million and EBITDA of us$ 0.5 million in the year ended 31 October 2008 compared to revenue of us$ 4.96 million and EBITDA of us$ 2.15 million in the year ended 31 October 2007.
Praesepe CEO, Nick Harding believes that the transaction represents an opportunity to purchase a high profile but underperforming asset and transform it into one of the leading slot gaming venues in the UK. He explained: “Revenues are currently running significantly below their 2006 level due to a number of reasons including the impact of the implementation of the 2005 Gambling Act, the ban on smoking, limited investment and management focus.
“We have identified clear opportunities to improve revenues and profits through hands-on management, operational improvements, increasing the floor space and introducing new gaming machines in partnership with the leading UK manufacturers. We expect the acquisition will be earnings enhancing in the current financial year. The industry is aware of our preference for establishing commercial partnerships with manufacturers and I want The Crystal Rooms to now be seen as the showcase for what is ‘state of the art’ in gaming machine equipment in the UK.
The Crystal Rooms will provide a flagship venue for Praesepe’s UK AGC estate. Leicester Square is one of Britain’s most visited tourist destinations with 91 million unique visitors each year. It also has the busiest pedestrian footway in Europe with some 250,000 people passing through it each day, a figure that is expected to increase following the planned redevelopment of Leicester Square, which should revitalise the area. The Crystal Rooms is located on the north side of the Square and ideally situated to benefit from tourist trade.
The acquisition is in line with Praesepe’s strategy to consolidate the Low Stake High Volume gaming market in the UK and Europe and to build a diversified group including gaming machines, bingo and sports book/pool betting operations.