Growth was high on the agenda this summer at Allied Leisure, the bowling and fast-food company, as part of its plan to attract new investors. 'We have been caught up in the small-company problem,' explains finance director Martin Scott. 'We are not a glamour company but we generate an awful lot of cash. But our share price has been under pressure because shareholders don't favour smaller companies.' The response produced the biggest change in the company's history. When Allied took action in June, it was already a UK market leader in ten-pin bowling centres with its 29 Megabowl centres, and it was the franchisor of 37 Burger King outlets. Allied, based at Barrow-upon-Soar in Leicestershire, merged with the similarly sized European Leisure, which ran the 91 Riley's snooker clubs. The move raised Allied's capitalisation to about £75m. Two months later Allied grew again. Venture capitalist Duke Street Capital acquired First Leisure's family entertainment centres through its newly formed Moatdale company. Allied took an equity stake in Moatdale and provided the management team to run it. This effectively pushed Allied's value past £100m. Scott had expected a quiet summer looking for an expansion opportunity. 'It is rather like waiting for a London bus,' he says. 'You want one, then several come along together.' But he seems attracted to the fast lane. He started at Allied Domecq and went on to become the first FD of pub chain JD Wetherspoon. While he was there from 1989 to 1994, he played his part in the company's stock market flotation. He spent a year with a computer company before Allied Leisure approached him to join the board. He is talking of a healthy set of results, due tomorrow. He warns there have been exceptional costs this year from closing some accounting centres and making 50 people redundant, as part of the effort to cut £3m in annual costs. But analysts still predict £5m pre-tax profits against £4.4m last year. The next step is to merge the Megabowl business into Moatdale by November to create a family-entertainment enterprise, owned equally by Allied and Duke Street.
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