Global Edition

Top Three Stories of 2006

11.00am 31st December 2006 - Corporate

The most read stories published on GBN in 2006 were the following.

Many club operators struggle to break even
Thursday, 19th October
Although there are outstanding results from many operators, almost half of the UK’s golf course companies report a struggle with profitability.

Almost half of the UK’s golf course companies are struggling to break even, whilst the other half are delivering outstanding returns, says a new study published by industry analysts Plimsoll Publishing Ltd.

The research has looked at the financial performance of each of the top 960 UK golf course operating companies and has analysed their latest profitability figures. It found a great discrepancy in the level of profitability and a worrying trend for the majority of the companies analysed. Just a few of the facts extracted from the analysis are.

David Pattison senior analyst at Plimsoll Publishing comments, “We are seeing from these numbers just how tricky the recent trading period has been for companies to return a profit and how many are really struggling. Yet at the same time over half of companies assessed seem untouched by recent cost increases and competitive pricing. They have been able to record fantastic results.”
David’s view is supported by facts from the analysis.

Over half of the 960 companies make 7.9% margins on average. The owners at these winning companies are averaging a 6.1% return on their investment. Sixteen highly profitably companies identified in the analysis are enjoying their fourth consecutive year of profit growth.

David Pattison continues, “Losing money might not be a complete disaster for your company, but it is likely to cause long term damage as your investment is constrained and your ability to retain staff becomes compromised. These companies may well find that they will not be able to keep pace with those companies who have the profits behind them to finance investment.”

The full 1,235 paged analysis contains a detailed analysis of each of the 960 companies. It is aimed at anyone with a commercial interest in the UK’s leading golf operators companies, whether these are customers, suppliers, or competitors.

Copies of the analysis are available for £350 from Plimsoll Publishing Ltd by email to or by visiting

Readers of Golf Business can receive a 5% discount when ordering online by entering the code PR01 at the checkout.
Plimsoll Publishing

Club Company sale heads for the finish
Friday 16th June
After a whirlwind bidding process the company which runs 11 UK golf courses, most with a country club formula, is expected to sell for just under £100 million.

It is less than three weeks since news broke in ‘The Times’ that The Club Company, the golf course operator formerly known as Clubhaus, had appointed Close Brothers as adviser to a possible £100 million sale, just two years after being taken private in a £56.5 million deal. The company was said to have already received a number of unsolicited approaches.

The Club Company is a private company owned by Legal and General Ventures and the executive management. It claims to have developed a unique club concept in England combining a traditional golf environment with superb modern health and fitness facilities for the whole family in a ‘country club environment’.

The Club Company currently owns 11 clubs in England of which 9 have been developed into Country Clubs, including Nizels in Kent, Mentmore in Buckinghamshire, Castle Royle in Berkshire, and The Tytherington in Cheshire.

To many golf industry observers the suggested £100 million price tag seemed somewhat inflated. The whole golf business in the UK has just come out of a longer winter season than normal and now gone into head-to-head competition with the attractions of the World Cup. On top of that there are water restrictions in some parts of the country – the market could best be described as ‘challenging’ to say the least.

Despite all this The Club Company is believed to have attracted at least two bids well in excess of £90 million and one bidder has now entered a period of ‘due diligence’. An announcement about the future owner of the group is expected soon.

The Club Company

A cross section of golf owners and operators
Friday 3rd November
The GCA Business of Golf Conference attracted representatives from the length and breadth of Europe and from commercial golf operations both large and small. They heard experts explain ways of increasing revenue and driving down costs. In open session many delegates expressed frustration with the lack of communication, co-ordination and forward thinking in promoting the game in the UK.

The Golf Consultants Association’s Business of Golf Conference is a shop window for the unique range of services offered by its members. The Association ( provides clients with expertise in such disciplines as corporate finance; development and investment appraisal; environmental management; market research; marketing and public relations; operational management; and property and real estate development.

The theme of this year’s gathering at The Celtic Manor Resort was ‘Profit from Golf’ and it attracted representatives from the length (Estonia to Cyprus) and breadth (Ireland to Slovakia) of Europe.

Naturally the majority of delegates came from the UK but, again, the range was impressive: from the owners of single courses to the operators of multiple facilities; from municipal pay and play to destination golf clubs and golf hotels and resorts, and from hands-on owner/managers to the directors and senior staff of companies running professional golf management contracts.

By way of providing a case study in high end golf development, the conference opened with Tom Sheehy, Cape Verde Development and Keith Haslam, operations director of PGA Golf Developments, describing how one of the world’s largest golf resort developments came about, and how it is taking shape. The role of master planning of golf resorts to optimise cash flow and profitability was described by Russell Bragg from Premier Resorts.

Financial advice came in presentations on both days. Norman Jackson and Gordon Miller, from Sunningdale Corporate Finance, described ways of avoiding mistakes when raising finance for new businesses. They encouraged their audience by demonstrating that they have actually succeeded in raising finance for a number of golf and leisure related clients, both conventional operations and also indoor golf centres.

Ian Henderson from Golf Finance explained that the financing of golf operations has come a long way from the days of hire purchase. Flexible funding is now readily available. This takes account not only of the life of the asset but also the individual requirements of the customer. Also, not only is finance available for golf course machinery, it can also be used for clubhouse improvements, new irrigation systems, additional land purchases and course extensions.

There were many presentations which concentrated on how profits can be improved – either by driving down costs or increasing revenues. David Rhodes, of Rhodes Consulting, encouraged many delegates by telling them that it is quite possible that they are spending too much, rather than too little, on water and their golf course consumables. Alan Prickett from Ransomes Jacobsen described ways of making the most of budgets for golf course machinery and maintenance while Ian Bulleid, Impetus Golf & Leisure, talked about the cost of poor service and how to avoid this problem.

Increasing revenue by yield management was the theme of Paul Heeney from Online Tee Times, who explained how the Internet has started a “tee time booking revolution” which is now a financial reality for many golf clubs. Gill Wilson, owner of Rye Hill Golf Club in Oxfordshire, explained her methods of “Open Golf” to increase participation. This means sweeping away many of golf’s prevailing attitudes to dress, which are perceived as being absurdly stuffy, unnecessary and dated.

Rye Hill’s Executive Membership package not only suits most people better than a conventional annual membership scheme but also provides management with improved systems control and marketing opportunities. The innovative ‘golf park’ facility for very young children not only introduces youngsters to the game of golf but also creates an awareness of environmental issues, IT and other skills. Gill explained that this package will become available to other operators early next year.

This emphasis on profit reinforced the presentation from Mark Smith for owners who wished to plan their ‘exit strategies’. He left delegates in no doubt that it matters little how much their courses had cost to develop nor how scenic their location; the only relevant factor in establishing value is the EBITDA (Earnings before interest, taxes, depreciation and amortization) that their business had achieved in the last two or three years.

Summing up the conference Mike Shields, Chairman of the Golf Consultants Association, said “The feedback we received from delegates was unanimously positive. I thought it was an inspiring and provocative Conference, both in terms of the presentations and the contributions from the floor.

“In those open sessions we detected a considerable degree of unrest from the industry’s commercial sector at the lack of communication, co-ordination and forward thinking in promoting the game in the UK, despite the commendable world-wide leadership provided by the R&A.

“The GCA Conference is now established as one of the industry’s less formal, more debate-driven events, which we know delegates find highly stimulating. The networking opportunities at the GCA Conference are outstanding. Next year we once again hope to provide a vehicle for debate between all involved in managing, developing, promoting and leading our beautiful game.”

Golf Consultants Association

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