By Ian Neubauer
The financial outlook for National Leisure and Gaming (NLG) has gone from bad to worse after the pub operator announced its third earnings downgrade since February.
NLG this week revised its projected 2007-08 earnings to $6 million, down from a $9.9 million guidance in April and a $12.9 million guidance in February.
NLG attributed the downgrade to the rising cost of refinancing debt and losses in gaming revenues. This was attributed to ongoing delays in completing refurbishment projects that cater to new smoking laws.
Also copping blame are a number of external factors, including rising petrol prices, interest rates and the RTD tax hike, all of which have resulted in “a measurable contraction in household discretionary spending,” NLG said in a statement to the ASX.
In a separate dossier, NLG also said it was pleased to announce it had paid close to $1 million to IRIS Hotel Group in settlement of a legal dispute. NLG paid $928,132.80 to IRIS on May 30 over a conflict The Australian Financial Review said stemmed from NLG’s purchase of nine pub leaseholds in Sydney’s west.
NLG shares lost more than 70 per cent of their value over the past week, nosediving from 3.3 cents on May 28 to a 1 cent today.