A syndicate of bank shareholders stands to make substantial financial gains from plans to place its European Leisure convertible redeemable preference shares. The banks effectively saved the group in 1993 by participating in a restructuring but since then European Leisure, has moved into the black.

The syndicate, headed by Barclays Bank, took up around 13 million of the preference shares at an effective price of 126p sterling. The plan now involves placing these shares which are convertible on a one for one basis, at near the market price. The placing price could be around 170p. The banks also own around 13 million ordinary shares, representing just under 50 per cent of the equity, which they got at effectively 60p per share. Some of the banks, for example, the Bank of Scotland, have already sold their ordinary shares, at a capital gain of around 100p per share.

The placing of the preference shares will reduce the banks' percentage holding to between 17 per cent and 18 per cent. If the banks were left with a residual holding of around 10 per cent, that would be the ideal position, said Mr Ian Rock, chief executive. This would imply a further sale of shares by the banks though a plan to raise further funds to finance expansion would also reduce the banks' percentage stake.

Results, announced yesterday, confirm the upward trend in profits. Profit before tax rose by 30 per cent from £4.1 million sterling to £5.4 million on a rise in sales from £68.2 million to £76.7 million in the year ended June 30th 1996. Earnings per share rose from 31.2p to 40.7p. The group, however, has not yet resumed dividend payments but says it continues to keep a dividend policy "under close review".

The group's balance sheet shows a positive profit and loss account of £37.2 million. However, there is still a negative off £31.2 million in other reserves. European Leisure enjoyed a strong performance from snooker and there was a substantial contribution from the new Riley's American Pool format. Maygay, the manufacturer of amusement machines was "significantly ahead" of the previous year. There was, however, a weak performance from its entertainments side.