“State of the Industry”Where have we come from? Where are we going to?

Workshop Session

Lead- Russell Gardner (PPA Exec Member)

Session Plan

PPA State of the Industry Report – Key Findings

Workshop Discussion Questions

Feedback and Conclusions

2010 SOI Study

39 playcentres contributed to 2010 study (up 10%)

65% participating sites opened within the last 5 years

Average visits per site 123,045 pa (door, parties & adults)

Employ average of 22 people per location (FT and PT)

Extrapolated PPA members have over 14million visits pa

The ‘average’ PPA site’ in 2009

Site size 11,660 sq ft (50% under 10,000)

No. of annual visits : 123,045 pa (Door 44k, Party 57k, Adults 42k)

Annual income £520k Employee costs as %age Net Revenue 25%F&B Gross Profit Margin 65-70%Net profit £34k

Key Headlines

F&B profitability increases in 2009 (67% vs 65% in 2008)

Party numbers and revenues appear to be in decline

69% of sites reporting breakeven or in profit for 2009

Growth of new sites slowed during 2008-10

Industry consolidation and group structures appearing

1)Has the market reached saturation point?

If so, what does this mean for PPA members?

Industry benchmarks changing

Year Admissions

Parties Catering

“Industry Benchmark”

33.3% 33.3% 33.3%

2007 39% 26% 35%

2008 41% 24% 35%

Decline in Party Revenues – why ?

Year Admissions

Parties Catering

“Industry Benchmark”

33.3% 33.3% 33.3%

2007 39% 26% 35%

2008 41% 24% 35%

2009 42% 20% 38%

2a) What is driving the reduction in parties and can this trend be reversed ?

2b) Are ‘do it’ yourself parties growing, if so, is this a positive or negative trend ?

Site Profitability

2009 Percentag

e

2008Percentag

e

A NET profit 54% 50%

Around break even 15% 11%

A NET loss 23% 22%

No Response 8% 17%

3a) Are your current profit levels acceptable ?

List your top 3 ways of improving profit margins ?

3b) 20% VAT opportunity or threat ?

Group Workout Session1) Has the market reached saturation point? If so, what does this mean for PPA members? 2a) What is driving the reduction in parties and can this trend be reversed ?

b) Are ‘do it’ yourself parties growing, if so, is this a positive or negative trend ?

3a) How can we improve current profit margins ? List your top 3 ways of improving profits b) Is forthcoming 20% VAT opportunity or threat ?

Quick Poll - Show of Hands In the next 5 years do you plan to :

Still be trading (relatively unchanged)Have expanded (acquisition or new sites)Exited the market completely

Do you think your local competition willRemain unchangedIncreased (playcentres or other)Decreased

Will you increase entry prices within next12 months ?

Yes, for children onlyYes, children and adultsYes, by introducing adult pricingNo

The SOTI report will be availablefrom the PPA shortly as well as notes and information from this

session

Thank-you