Freeport Leisure
Freeport Leisure
Accounts for Year to June 1997
Responsible for importing the American idea of factory outlet malls into the UK, Freeport Leisure is a profitable enough business, even though its centres bear only a passing comparison with the American equivalent. The Hornsea Freeport and a similar development in Fleetwood both occupy rather bleak sites, and it is surely stretching a point for the report to describe the Fleetwood development in particular as having "echoes of Martha's Vineyard and Key West".
This quibble aside, the business has been moving well this past year with turnover up by 68 per cent reflecting a first time contribution from the third outlet (in Westwood, in the central belt of Scotland) and growth at the other two units. Profits were 60 per cent ahead. Visitor numbers were up by a like amount and tenant sales have been even more buoyant. Net assets per share at the group doubled to 191p and gearing ended the year at 14 per cent.
At the time of the accounts,Freeport was awaiting a ministerial decision on a "brownfield" site in Braintree in Essex, to allow a 280,000 sq. ft development. The decision to hold a public enquiry relating to the site in Rushden in Northamptonshire has resulted in this development being abandoned. There are thought, however, to be a substantial number of new opportunities available for this type of development in other parts of the country. In addition, a further 40,000 sq. ft of space is to be added at Hornsea following the granting of planning permission in September and the third phase of expansion at Fleetwood was handed over to tenants the same month. The Scottish centre is already 90 per cent let.
Cash flow last year was £1.8m but after paying £6.2m to acquire new sites there was a substantial outflow, met by bank borrowings and reductions in the cash balances available following the float. The low level of gearing suggests substantial further scope for acquisitions for the next couple of years or so. The shares have more than doubled in the past year (currently 229p), suggesting optimism over future prospects for this type of outlet.
