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Industry Report Card: European Leisure Operators Remain On The Defensive As Macroeconomic Indicators Improve Jan 11
Standard & Poors, Jan 2011
Abstract
Despite a return to economic growth in Western Europe, rated leisure companies in Europe, the Middle East, and Africa (EMEA) remain in predominantly defensive mode, managing businesses for cash, refinancing early, extending debt maturities, and generally maintaining strong discipline over costs, capital expenditures, and dividends. Furthermore, acquisition activity in the sector has been muted, although recent reports indicate that Ladbrokes PLC (BB/Stable/--) has held preliminary bid talks with 888 Holdings PLC (not rated). Meanwhile, several companies, including Gala Electric Casinos Ltd. (Gala; B/Negative/--), Merlin Entertainments Group Luxembourg S.-.r.l. (B/Stable/--), and TUI AG (B-/Stable/--) have benefited from major financial restructurings. In our view, the aggressive or highly leveraged financial profiles of many companies in the sector leave them still relatively exposed...
Companies mentioned in this report are: The Rank Group PLC,Accor S.A.,Ladbrokes PLC,Cirsa Gaming Corp. S.A.,Enterprise Inns PLC,InterContinental Hotels Group PLC,SAZKA a.s.,Codere S.A.,TUI AG,Carlson Wagonlit B.V.,Peermont Global (Proprietary) Ltd.,Merlin Entertainments S.a.r.l.,William Hill PLC,SNAI SpA,Gala Coral Group Ltd.
Standard and Poors RatingsXpress Credit Research provides in-depth coverage of international corporates, financial institutions, insurance companies, utilities, sovereigns and structured finance programs. RatingsXpress Credit Research lets users determine the credit rating of holdings and identify key factors underlying an issuer's creditworthiness, distinguishes the different risk exposures for new and existing deals, and provides an understanding of how their analysts interpret key regulatory, political and environmental events and their economic impact.
Research Type: Commentary
Criteria articles describe the thought process and methodology Standard & Poor's analysts use in determining ratings. These commentary pieces discuss both the quantitative (economic and financial) and qualitative (business analysis and caliber of management) aspects of the analysis, as well as legal issues.
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