An article that I read in Barrons in January raved about the growth of ice sports and the significant cash-flow and incredible returns in the ice rink business. Experts were quoted that rinks can have profit margins of more than 50%. It seem that there is a severe shortage of available ice in North America, with demand for ice outstripping supply. Peter Lynch described how Warren Buffett has made billions by investing in niche market companies. I found International Training Rinks (ITR-ASE) that is capitalizing on the ice shortage and filling the niche. I haven't found anyone else doing what this company is doing. Is anyone following this company? Has anyone else read the Barron's article?
Re Commercial Ice Rinks:This is an interesting topic that I have not read anything about. However, if ice rental is so lucrative, I wonder why municipal rinks and arenas are perpetual tax drains on their municipalities.Like all real estate ventures, the primary 3 concerns for this business would be location, location and location (in my untutored view, anyway.)Talk to Investor Relations at the company and let us know what you find out.
I haven't called Investor Realtions yet, but here is the latest news release (IR number at the end of text): International Training Rinks: Innovative Ice Rink Concept to Expand Into Quebec LANGLEY, BRITISH COLUMBIA--International Training Rinks Corp. (ITR - Alberta), a company involved in the construction, operation and franchising of innovative multi-purpose ice facilities, today announced it has signed a substantial ice rental contract with a Minor Hockey Association in Montreal, Quebec. The company has now begun site selection for the construction of a new "National Training Rink" facility. The facility will contain 2 sheets of ice and will be the company's first "state-of-the-art" facility reflecting the redesign and repackaging efforts of its new strategic alliance partner, StadiumConsultants International, Inc., designers of GM Place Stadium in Vancouver, B.C. and the new Air Canada Center in Toronto, Ontario. John Swan, President of ITR, stated, "We are extremely excited to be entering the Quebec market. This contract gives us a solid anchor tenant and will provide us with the ideal stream of traffic for our other products." North American interest in ice sports has been growing at a phenomenal pace and will be further fueled by the Olympic Games. The company continues to pursue other contracts with Minor Hockey Associations in central and western Canada. There are currently 7corporate and franchise National Training Rinks facilities operating in British Columbia and Ontario. John Swan, President of International Training Rinks Corp. -30- FOR FURTHER INFORMATION PLEASE CONTACT: International Training Rinks Corp. Investor Relations 1-888-605-8522 (Toll Free)
Hold on to your hat!!! This sounds to me that you are on the payrol of ITR. Seriously, this is Canada. We have countless number of municipal ice rinks, we have countless number of outdoor community ice rinks. Sure, we like to skate, but...., just like the other message said: why do municipalities / townships perpetually have to bail out all those facilities? I bet you this is because we love to skate, but we do not like to pay. Hell, our community has a difficult time to collect lousy $10 (yearly fee) so the community rink can be kept open. Oh, sure there are lot of skaters, every day, but non of them paid the fee (and they sure 'bitch' if ice is a little rough). There is also a sport club in the community (private), it's bleeding red, ... what more can I say? Have fun investing....
Oldliz,Regarding International Training Rinks (ASE-ITR), I called Investor Relations. They collaborated the info from the January Barron's article, that there is a growing demand for,and a critical shortage of ice facilities. There is a growing waiting lists for kids to get into minor hockey. ITR said that their facilities have a smaller ice surface than regular ice. The smaller ice makes it cheaper to build and operate than a full size rink. They also offer ongoing full instructional/ hockey programs as opposed to just renting out ice time. I think these points distinguish ITR from the municipal rinks.
... like I said before: Happy investing ....
From The Financial Post (Mar. 5/98) Re: Growth of Amateur HockeyAnother article about the growth of hockey. In the sports section of today's Financial Post there is an article about the shortage of goalies and companies that "rent' goalies. What is of importance to those of us who follow ITR is the 3rd paragraph mentioning Toronto has more than 200 rinks and "scores" of amateur hockey leagues. Recreational teams are paying $3000 to $5000 to organize a recreational team and pay about $300 an hour for ice time. Wow! Rinks are money makers! I spoke with Investor Relations this morning (1-888-605-8522). They also saw the article. They said how ITR has their own 3 on 3 hockey league and players can sign up without having to organize their own teams.
OK, let's calculate: $300.-/hr for ice time, multiply that by - I am guessing here, 12 rented hours per day, finally multiply that - I am guessing again, 200 days in the year. Let's see, this adds up to: (drum roll, please!!!) $720K. All we need now is some 'real estate' expert to figure out what expenses would be on the 'rinky-dinky-rink' ... back to you ...
Its disappointing to see your "guessing" and mathematical skills leave something to be desired. Maybe you've never played recreational ice hockey before. Due to the huge demand, the ice is often only available after midnight, if at all, for rentals. Let's be a little more realistic in our estimate of revenues from ice rentals. Using the numbers from the Jan. 98 Barron's article, the average rink is open 360 days, nearly 24 hours a day. For the purpose our our estimates, let's say an International Training Rink is open 360 days/yr with ice utilization of 18 hours/day, and use a more conservative $200/hr for ice time. (Showing calculations as 360 x 18 x $200 ). Let's see, this adds up to: (drum roll, please!!!) $ 1.296 million in revenue per ice sheet!!! Cha-ching !!! In general, ice time contributes 60% of a rink's revenue while concessions, shops, etc.. contribute about another 40%. This contribution would add another $518K to revenues. So, our 'rinky-dinky-rink' has estimated revenues of $1.8 million, with profit margins, according to Barron's, of more than 50%.
So, how come we don't have three 'rinky-dinky-rinks' on every street corner! ... just kidding, please forgive me. Let me expand on what I wrote before: The reason I said 12 hrs. per day is because I don't think that you can average more than 12 'productive' booking hours per day / seven days a week / 52 weeks per year. As to 200 days per year, well, it's the same story - I don't think that you will be able to stay open 365 days per year. I think there are lots of people who want to play hokey, but ... there are other things like ... rest of one's life! Finally, let me say this: So, I am wrong, very wrong, and your 'rinky-dinky-rink' does indeed is as good as you say it is, all you will have to do is 'stick around' (no pun intended!) for ... say, one year or so,... and you will do find three 'rinky-dinky-rinks' on each corner and, all of the sudden you will be booking, on the average, 12 hrs/day, 200 days/year - probably at something like $150.- /hr., but ... hey! what do I know! After all, as long as I made you think, that's all it takes. Happy investing!!! Keep us posted!
As a hockey player who has played on the small rinks (3 on 3 skaters)I can say that it is very fast, an excellent workout, a great skill developer, and a ton of fun. In my area people are signing up their kids to play hockey at birth due to long waiting lists. Access to ice is under a severe squeeze and rental costs are though the roof. Since an arguement that skill development on the smaller surfaces for kids is superior to the regular rinks and the fact that its so much fun I think that ITR's time has come. I sure hope they can hit a critical mass and own this huge market! The last announcements on rental contracts in Vancouver and Montreal should be the beginning of a strong growth curve. It just makes sense!
Best Of |
Favorites & Replies |
Start a New Board |
My Fool |