Cuerden slides to a loss as income dives

REVENUES continued to slide last year at Trevor Hemmings’ gaming group Cuerden Leisure.

Turnover at the Chorley-based business, which employs 436 staff, fell 23% in the year to March to £35.8m. The previous year sales slumped from £58m to £46m.

The group took an exceptional hit of £2m on onerous leases and slipped to a pre-tax loss of £2.3m from a profit of £4.5m last time.

According to the accounts the business, which has borrowings of £29m, breached a banking covenant and negotiations over new facilities were still ongoing in September when the figures were signed off.

A note in the accounts said: “Based on these discussions the directors are confident that, subject to the bank’s approval process, renewed facilities will be made available, the existing covenant breach will be waived and that the group will be supported on an ongoing basis.

“The directors have no reason to believe that a material uncertainty exists that may cast a doubt about the ability of the group to continue as a going concern or its ability to continue with the current banking arrangements.”

Cuerden, through its operating divisions Cuerden Leisure Arcades, Crown Direct and Deith Leisure sells and distributes fruit machines and other arcade games to holiday centres, caravan parks, bowling alleys and seaside piers. Until March 2008 it owned the Pontin’s holiday park business that fell into administration earlier in the month.

In their report the directors say the arcades business achieved year-on-year growth and good weather helped its piers division to profitability. But they said the distribution of gaming machines has been affected by uncertainty over the classification and taxation of the machines.

“The principal uncertainties associated with the group are the continuing effects arising from the changing legislative and tax frameworks for gaming machines in the UK, the general economy and changes in disposable income,” said the directors.

Cuerden’s ultimate parent company is Newby Manor Ltd, a company registered in Jersey and wholly owned by the family interests of Trevor Hemmings. Management at Cuerden could not be reached for comment.