About Leisure Connection

LC Reports     LC's PR and Lobbying   Links to Further Reports

Leisure Connection was formed from the merger of Relaxion and Circa, both of which began as management buy outs of UK local authority leisure services over a decade ago. For more on the origins of Circa and Relaxion see http://www.psiru.org/companydetails.asp?Companyid=960 and http://www.psiru.org/companydetails.asp?Companyid=3016. 

The web site for Leisure Connection is http://www.leisureconnection.co.uk/ .

LC is now owned by Danoptra Limited - see  http://www.kunick.com/. Danoptra is the name adopted by the management of Kunick after they took the business private, leaving the Stock Exchange in June 2002. Information about people involved in Danoptra and LC.

LC brands include Harpers Fitness, Aqua Action Swim School, Venue Connect, Party Animals, Camp Energy and Planet Action.

Danoptra is in turn linked to Electra Partners Europe, a venture capital company - see  Electra Page  and  http://www.electraeurope.com/english/index_who.asp for more further information. City Equities report on Kunick and Electra, from February 2002

Leisure Connection Contact Details  see http://www.leisureconnection.co.uk/section12.html  

LC's Public Relations & Lobbying 

As of at least January 2008 what some might consider a poisoned chalice, conducting PR for LC, was bravely taken up by Mortimer Chadwick Gray Public Relations. Tel. 0113 268 5000.  Contacts Rebecca Douglas or Christine Mortimer - Rebecca.douglas@mcgpr.co.uk   christine.mortimer@mcgpr.co.uk    

Does this mean far fewer journalists will be frustrated by "no one was available for comment", when the story  involves complaints about LC rather than hype? An example of hype from LC's website, author unknown, and dated 24.1.08 includes:

"Customer Service will remain top of the agenda for Leisure Connection and we will remain providing a high quality of service for customers within a public access environment." http://www.leisureconnection.co.uk/news/7/275/leisure-connection-commit-to-invest-26million-into-local-leisure.html  

And presumably the above remains a great example of copywriting? Another piece of puff from a different web page with the same date is:

"So it should be no surprise that Leisure Connection's chief executive Graham Farrant will be one of the judges at the 2008 prestigious MJ Awards, (the awards of the leading local authority magazine The MJ) which will take place in June." So it should be no surprise that Leisure Connection's chief executive Graham Farrant will be one of the judges at the 2008 prestigious MJ Awards, (the awards of the leading local authority magazine The MJ) which will take place in June." http://www.leisureconnection.co.uk/news/7/279/leisure-connection-sponsor-local-authority-awards.htm l 

Hold that front page! 

No, stop. It's hardly surprising LC is invited to judge an award that it sponsors. And who says the MJ (formerly the Municipal Journal) is the leading local authority magazine?  One alternative is the Local Government Chronicle which claims to be "the market leading publication for managers working in local government, with an ABC audited circulation of 8,658 .... 4,004 more paid subscriptions than the nearest competitor." http://www.ri6.co.uk/ri5/nva/LocalGovChronicle/circulation.html 

In 2005 CDC Public Affairs listed  "Leisure Connection plc" as one of their clients at www.cdcpublicaffairs.com/clients.html . CDC claimed to "offer a personalised public affairs service where we help our clients every step of the way. Whether dealing with ministers, commissioners, protesters, councillors or local residents, our team works with you. Our broad-based staff covers the political spectrum and has experience of operating at every level of Government in the United Kingdom and Brussels." As of 2008, the CDC website appears to have disappeared.

LC  Reports

A review of strategic operations implemented by the board last summer led to the proposal made by chief executive Colin Daniels on behalf of the Independent Directors and the board of Danoptra, a company set up specifically for the purpose of acquiring Kunick.

'The board considered the issues which were having an adverse impact on the group and restricting its ability to deliver improved shareholder value,' said Clive Clague, Kunick chairman. 'The Independent Directors believe these issues are unlikely to change in the foreseeable future and therefore the proposal provides the best available opportunity for shareholders to realise their investments.'

The deal is being funded by Electra Partners Europe, a European manager of private equity, and Royal Bank of Scotland Leveraged Finance.

'This offer will enable the businesses to move forward without the constraints and difficulties provided by the current capital structure and publicly listed status of the company,' commented Robert Clarke, director of Electra.

from Richard Wray, The Guardian, 29 January 2002

Kunick, the fitness clubs and pub slot machines company, yesterday said it has received a takeover approach from a management buyout team led by its current chief executive. The bid, backed by private equity firm Electra Partners Europe, would value the company at just under £40m, or 17.5p per share.

Kunick's shares collapsed in 2000 after the company warned twice on profits and its chief executive, Russell Smith, quit the business. His replacement, Colin Daniels, has undertaken a large restructuring, selling off non-core businesses. He is now leading the management buyout team.

Yesterday Kunick said its independent directors were still examining the offer. "The board asked management to evaluate the possibility of taking the business private in order to deliver value for shareholders, while finding the appropriate capital structure to fund long-term development of the business," the company said... 

January 2002  http://www.kunick.com/january2002/investorsinformation/financialreports/reports99/page6D.html 

LEISURE FACILITIES MANAGEMENT

The leisure facilities management business has been further strengthened by the late summer acquisition of Circa, for £9.9 million. This business has been merged with the Group’s existing activity, Relaxion, to form a new company, Leisure Connection, which is by far the UK’s leading local authority health and fitness company. It has a 25% market share of privately managed facilities, managing 107 leisure facilities including 70 Harpers Fitness Centres. This is now the second largest chain of fitness centres in the UK, public or private, by number of centres. The combined business will have an annual income of more than £55 million, which represents around 20 million customer visits per year...

Over 40% of Leisure Connection’s revenue is derived from contract management fees and direct debit memberships. The average future contract length is over 5 years. Leisure Connection’s combined health and fitness membership now stands at around 70,000 members. 

Turnover in this business increased by 19% to £38 million (1998: £32 million), while profits were up 8% to £2.4 million (1998: £2.2 million). This increase only includes a small contribution from the Circa acquisition which was made shortly before the year end. In addition, the business has also absorbed the financial impact of the European Working Time Directive at an annual cost of £0.2 million. As anticipated, in the financial year there was a lull in the awarding of new local authority contracts during the period when Compulsory Competitive Tendering was being replaced by the new ‘Best Value’ initiative, although Relaxion still won the contract to manage 3 centres for the London Borough of Brent from May 1999. Since then Leisure Connection has won 3 new leisure facilities management contracts, including Milton Keynes which started on 1st December 1999, and one new franchise contract, all of which will become operational in Financial Year 2000...

OUTLOOK LEISURE FACILITIES MANAGEMENT
The Group’s strategy is to achieve a greater share of the £2 billion local authority sector market, through further investment in Leisure Connection. Currently 80% of this market, representing 1,700 leisure facilities, is still under local authority management. Leisure Connection is well placed to achieve this, because of its strong roots in public sector facilities management.

The Board believes that the benefits of public-private sector partnerships in the operation of leisure services, with consequent efficiency gains and capital investment through commercial arrangements, have been clearly demonstrated through the success of Relaxion and Circa. Leisure Connection continues to encourage councils to review the private sector’s potential role in improving the performance of their leisure services under the Government’s ‘Best Value’ initiative...

Russell Smith - Chief Executive 

17-Mar-03 Fitness industry's most profitable companies 

From http://www.leisureopportunities.co.uk/newsdetail.cfm?codeID=4079 

Business Ratio has revealed the most profitable companies in the fitness industry. The Fitness and Leisure Industry report examined the financial performance of 68 leading companies and produced a ranking table in terms of pre-tax profit margins for the financial year 2001/2. All companies featured have a minimum turnover of £1m. 

The average pre-tax profit margin for the sector was 14.7 per cent. Leisure Connection has a pre tax profit margin of 31.6 per cent, Pacific Health & Fitness (27.6 per cent), Warwickshire Racquets & Heath Club (27.5 per cent), David Lloyd Leisure (21.9 per cent), Bannatyne Fitness (21.6 per cent), Fitness First Holdings (21.3 per cent)...

From http://www.leisureopportunities.co.uk/newsdetail.cfm?codeID=4471

Former Cannons managing director, Martin Oliver, has taken up his new position as chief executive of Leisure Connection. Oliver, who was with Cannons from 1999 to 2002, joined Leisure Connection on 22 April. His appointment follows the recent appointment of Craig Morgan as operations director...

October 2003 From http://www.electraeurope.com/admin/Publisher/EPETransactions/uploads/Danoptra%20TU.pdf 

Electra Partners Europe has backed the £30 million acquisition of the UK based amusement machine interests of The RankGroup Plc ("RLMS") through its existing investment in Danoptra, which arose from the £118 million public to private of Kunick plc led by Electra Partners Europe in 2002. 

Danoptra comprises a leisure management business Leisure Connection and a separate amusement machines
division. RLMS will be combined with Danoptra's existing machine operating business, Gamestec Leisure Limited ("Gamestec").The transaction, which is subject to certain regulatory clearances, is expected to close by the year end. The Electra European Fund has a £50 million investment in Danoptra and will be providing a
further £16 million to enable the transaction to be completed. The balance of the funding will come from existing Danoptra resources and new debt facilities. After the acquisition the Electra European Fund will hold just over 80% of the equity in Danoptra...

The transaction is consistent with the original investment strategy for Danoptra, which included the flexibility to look at opportunities which the business would not have been able to pursue as a public company, and
contemplated potential acquisitions in the amusement machines sector.

Links To Further Reports

10.12.00 Kunick PLC Preliminary Results for the Year Ended 30th September 1999 http://moneyextra.uk-wire.com/cgi-bin/articles/199912130701433709C.html 

22.9.00  Kunick PLC  Trading Update and Appointment of New Chief Executive http://moneyextra.uk-wire.com/cgi-bin/articles/200009220800073597R.html 

23.03.02 Kunick PLC Interim Results for the Six Months Ended 31 March 2002 http://moneyextra.uk-wire.com/cgi-bin/articles/20020523070000P4156.html 

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