Buckingham Bingo Close Another Club

Thursday, 15 April 2010 12:04

One of the largest independent operators has closed doors on anothers of its bingo clubs as part of its restructuring plan.

The company commneted that the club at the Parrs Wood Centre in the Didsbury area of Manchester was closed as a result of underperformance: “The closure follows a combination of three factors that questioned the club’s economic future and which have had a severe affect on other licensed bingo clubs throughout the UK.

“The impact of the smoking ban, which has reduced the numbers of people attending bingo clubs, has been aggravated by the ongoing recession and a government tax increase on bingo through the gross profit tax.

“Buckingham Bingo is responding to this by consolidating and restructuring the company to secure a longer-term future for the rest of our clubs and better equip us to move forward from what has been a difficult economic period for most businesses.”

The club which only opened in 2000 employed 27 staff who were offered work at the other clubs within the Greater Manchester area. Three staff accepted the offer and the remaining 24 employees opted for redundancy.

The company boasts over 1.7m attendances each year, and was founded in 1970 by Panico Panayi. The business was then by the family to Alchemy Partners, a Venture Capital group in 2005 for around £100 million. The deal was done at a similar time to Beacon Entertainments being sold by the Thomas Family for around £90 million. Many within the industry felt that both companies were significantly over valued.

Factors such as the no smoking ban, changes to machines and tax laws have had a major impact on the industry and both of these companies are worth around half of what was paid for them.

The most recent set of accounts for Buckingham's parent company, Full House Holdings covering the year to March 2008 showed pre-tax losses of £88.7m (which was mainly a result of the purchase one off charges) and the statement within the report also had a warning over the firm's status as a going concern. Revenues for the period were down to £33m from previously reported £44m.

It was reported that while Alchemy Partners had purchased the company they had taken on significant borrowing from Barclays in relation to the purchase. With the credit crisis and property prices predicted to fall sharply Barclays asked Alchemy Partners to reduce some of the debt. Having overpaid for the company and declining revenues it was clear the Buckingham Bingo was worth significantly less than what was paid for it. Alchemy wrote off the investment rather than injecting further funds and as a result Barclays took control of the company.

Andy Cunningham, the Group CHief Executive commented: “Our consolidating and restructuring has included an ongoing review of underperforming clubs, renegotiating onerous leases and equipping Buckingham Bingo for what has been a much better start to this financial year.

“Our 2009 figures are down, but we are no different to any other similar operator in this leisure sector.

“We do, however, have some very large and profitable clubs and our online bingo performs very well.

“While adverse weather affected business in January, it was encouraging in February and March.”

Buckingham now has a total of 11 sites, three of which are in the Manchester area (Middleton, Old Trafford and Walkden)and employees around 350 people.