PSIRU Company Details

Company Name: Circa

Home country: UK

Circa Leisure Plc,

Cottis House, Locks Hill, Bradley Way,

Rochford, ESSEX SS4 1BQ

European Works:

Directors

Nigel Golding ; Peter Johnson; Arthur Cooke

Last Updated: 31/03/1997

PSIRU Capsule
COMPANY HISTORY Set up in January 1988, Circa Leisure was the first management buy-out of local authority leisure services. It followed Rochford DC's decision to allow staff from its Leisure Directorate to ‘buy out’ its management functions. Rochford was one of the first local authorities to embrace privatisation of local government services. Circa was initially given a one-year contract to 31.3.89, on the understanding that during the year the council would re-tender, this time competitively. Circa eventually won the contract for the management of leisure facilities and their catering functions. Its Director, Peter Johnson, is keen to promote MBOs, claiming that, “our hope is that more LA leisure managers will explore the possibility of a Buy-Out and we would welcome the chance of helping them make this a reality. As in our case, the quality of staff already exists but they need the freedom to manage”. In April 1989 the company acquired ‘Circa Catering’, the company that had been formed at the same time as Circa Leisure to operate catering contracts, and owned by its employees. In April 1990 Citygrove Plc acquired 50% of the company for £300,000, plus a deferred consideration of up to £2m, dependent on the company making pre-tax profits of £1.57m by November 1995. Johnson said the takeover was necessary if the company was to grow significantly and take advantage of CCT. Citygrove were specialists in building leisure developments and then passing on the management to another company, which under this arrangement will be Circa Leisure. However, later that year, Citygrove went into liquidation, and Circa Leisure managed to extricate themselves and carry on as a separate business again. OWNERSHIP Out of £500,000 shares authorised, £50,100 have been allotted and fully paid. These shares are divided up as follows: 37,575 x £1.00 “A” shares, 12,525 x £1.00 “B” shares Its ultimate parent company is currently ‘Circa Group Limited’ P Johnson, the chairman and chief executive is the"controlling prty", since he has a controlling interest in Circa Group. PRINCIPAL ACTIVITIES Management service for leisure facilities within both the public and private sectors. MAJOR SUBSIDIARIES The company owns 100% of ‘Circa Catering Limited’. This subsidiary is registered as ‘dormant’. The share capital value of this subsidiary is £100. FINANCIAL At 31/3/95, the company continued its year on year increases in both its turnover and profits. After all costs had been deducted, retained profits of £293,193 were carried over into the company’s accumulated profit/loss account. At 31/3/95, this totalled £535,189. The company was also solvent. In the year to 31/3/96 sales increasesd but profits fell. This appears to be due to larger operating expenses. There were increases in raw materials and consuables, and in "other provisions". PAY & CONDITIONS When transferred from Rochford's employment, staff lost job security and were expected to work longer hours. They were trained by Circa, who “outlined clearly how benefits to staff would increase in proportion to the amount of profit the company made.” The workforce was made up of: 1995 1996 Operational and Administration 293 - a fall of 26% from 1994 341 Coaching and Casual 466 - an increase of 179% from 1994 529 The average wage was a mere £4,304 ( 1995 - £3,933). This is most likely due to the increase in casual workers employed since 1994. CONTRACTS (See Printout for Full List of Contracts) 1. Rochford D.C. - 5 years - April 1989 Management of one leisure centre, one sports centre, one community hall, two functions facilities plus responsibility for special events like theRochford Regatta. Circa undertook to invest £150,000 to improve facilities 2. Castle Point D.C. - 5 years - April 1989 Operating bars in four leisure facilities 3. Maldon D.C. - 10 years - 1989 Management of sports centre and proposed leisure pool (construction began January 1990). 4. Derby - July 1992 - £1.250,000 Within a short time of signing the contract Circa approached the council for and additional £50,000 to pay for a computerised booking system. The council declined.

PSIRU Capsule

COMPANY HISTORY

Set up in January 1988, Circa Leisure was the first management buy-out of local authority leisure services. It followed Rochford DC's decision to allow staff from its Leisure Directorate to ‘buy out’ its management functions. Rochford was one of the first local authorities to embrace privatisation of local government services.

Circa was initially given a one-year contract to 31.3.89, on the understanding that during the year the council would re-tender, this time competitively. Circa eventually won the contract for the management of leisure facilities and their catering functions. Its Director, Peter Johnson, is keen to promote MBOs, claiming that, “our hope is that more LA leisure managers will explore the possibility of a Buy-Out and we would welcome the chance of helping them make this a reality. As in our case, the quality of staff already exists but they need the freedom to manage”.

In April 1989 the company acquired ‘Circa Catering’, the company that had been formed at the same time as Circa Leisure to operate catering contracts, and owned by its employees. In April 1990 Citygrove Plc acquired 50% of the company for £300,000, plus a deferred consideration of up to £2m, dependent on the company making pre-tax profits of £1.57m by November 1995.

Johnson said the takeover was necessary if the company was to grow significantly and take advantage of CCT. Citygrove were specialists in building leisure developments and then passing on the management to another company, which under this arrangement will be Circa Leisure. However, later that year, Citygrove went into liquidation, and Circa Leisure managed to extricate themselves and carry on as a separate business again.

OWNERSHIP

Out of £500,000 shares authorised, £50,100 have been allotted and fully paid. These shares are divided up as follows:
37,575 x £1.00 “A” shares, 12,525 x £1.00 “B” shares

Its ultimate parent company is currently ‘Circa Group Limited’ P Johnson, the chairman and chief executive is the"controlling prty", since he has a controlling interest in Circa Group.

PRINCIPAL ACTIVITIES

Management service for leisure facilities within both the public and private sectors.

MAJOR SUBSIDIARIES

The company owns 100% of ‘Circa Catering Limited’. This subsidiary is registered as ‘dormant’. The share capital value of this subsidiary is £100.

FINANCIAL

At 31/3/95, the company continued its year on year increases in both its turnover and profits. After all costs had been deducted, retained profits of £293,193 were carried over into the company’s accumulated profit/loss account. At 31/3/95, this totalled £535,189. The company was also solvent.

In the year to 31/3/96 sales increasesd but profits fell. This appears to be due to larger operating expenses. There were increases in raw materials and consuables, and in "other provisions".

PAY & CONDITIONS

When transferred from Rochford's employment, staff lost job security and were expected to work longer hours. They were trained by Circa, who “outlined clearly how benefits to staff would increase in proportion to the amount of profit the company made.”

The workforce was made up of:

1995 1996

Operational and Administration 293 - a fall of 26% from 1994 341
Coaching and Casual 466 - an increase of 179% from 1994 529

The average wage was a mere £4,304 ( 1995 - £3,933). This is most likely due to the increase in casual workers employed since 1994.

CONTRACTS (See Printout for Full List of Contracts)

1. Rochford D.C. - 5 years - April 1989

Management of one leisure centre, one sports centre, one community hall, two functions facilities plus responsibility for special events like theRochford Regatta. Circa undertook to invest £150,000 to improve facilities

2. Castle Point D.C. - 5 years - April 1989

Operating bars in four leisure facilities

3. Maldon D.C. - 10 years - 1989

Management of sports centre and proposed leisure pool (construction began January 1990).

4. Derby - July 1992 - £1.250,000

Within a short time of signing the contract Circa approached the council for and additional £50,000 to pay for a computerised booking system. The council declined.

	PUBLIC SERVICES INTERNATIONAL RESEARCH UNIT @ Business School,

Company Name: Circa

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