By Andrew Starke

National Leisure and Gaming (NLG) has announced better than expected results for the year to June 30, with takeaway liquor and gaming boosting the bottom line across its portfolio of 36 leasehold hotels in Queensland and New South Wales.

The pub owner declared a profit of $387,000, with total revenue down slightly from last year at $192 million.

However the situation is a massive improvement on last year when auditors Pitcher Partners raised questions about NLG’s ability to continue as a going concern.

The group was thrown a financial lifeline by its primary creditor, the Bank of New Zealand Australia (BNZA) last year, when it was given an additional 12 months to repay off $200 million in debt that was due at the end of the 2007-08 fiscal year.

This debt facility has now been extended to July 2011 providing NLG does not breach its debt covenants.

Two pubs – Magnums at Airlie Beach and The Blue Pacific Hotel at Bridie Island – were sold to Australian Leisure and Hospitality (ALH) for $12.5 million in June to help service this debt. Finnians Irish Tavern in Port Macquarie was also sold.

NLG CEO Andrew Jolliffe told The Australian Financial Review that spending over the bar had dropped over the past 12 months, forcing NLG to get tough on expenses.

“We created an online expense model whereby no material expense could be taken up at the venue level without an approval by the area manager,” he said.

As one of the larger industry players, NLG has also been closely monitoring income to ensure it didn’t skew towards one particular revenue stream.

Revenue from retail sales rose markedly from $26 million last year to $49.7, while gaming revenue climbed by ten percent to $90.1 million.

NLG will push ahead with renovations to at least seven of its NSW venues in the coming months.

NLG shares were at 2.3 cents at midday (Sep 2) today, up from 2 cents seven days ago.

The Shout Team

The leading online news service for Australia's beer, wine, spirits and hospitality industries.

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