31 January 2006 – Maggie Urry Financial Times
The Reuben brothers, the billionaire property investors, have increased their stake in Ultimate Leisure from 14.9 to 24.9 per cent.
It is understood that the increase came through the conversion of contracts for difference into shares. They are believed to hold CFDs over a further 5 per cent of Ultimate’s share capital. Ultimate’s shares were unchanged at 266p yesterday.
The increase in the stake follows Ultimate Leisure’s trading update nearly three weeks ago, when it warned that profit for the year to end June would be “substantially” below market expectations. However, it also said it intended to maintain its interim dividend and revealed that the group’s estate was worth about £80m, £14m more than it was valued at in the books.
Ultimate had been performing poorly and last summer a new management team was installed by unhappy shareholders.
After the trading statement, which warned that Christmas and New Year sales had been hit by “significant new competition”, analysts cut their pre-tax profit forecasts for MultiMate’s current year from more than £5m to about £1.6m, and for the year tot June 2007 from £7m to about £3m.
Ultimate, which floated on Aim in 1999, hit trouble early last year and issued profit warnings in April and July, while directors sold shares.
A shareholder revolt, led by Dawnay Day, removed most of the group’s directors, installing Mark Jones, formerly of the Yates group of bars, as executive chairman.