Analysts bet on poor score for Ladbroke
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Your support makes all the difference.ANALYSTS disappointed by interim results from Ladbroke Group - the Hilton hotels, Texas Homecare and betting-shop company - have cut profit projections sharply.
Pre-tax profits to 30 June rose from pounds 98.2m to pounds 103.2m, initially lifting the shares by 8p before analysts set about the numbers. The shares closed 3p firmer at 151p in a very buoyant market.
Analysts were concerned mainly by the hotel results. County NatWest sliced pounds 25m off its full-year projection to pounds 210m, including pounds 40m from property disposals. Barclays de Zoete Wedd lowered its sights from pounds 230m to pounds 220m and by pounds 25m to pounds 260m for 1993.
Neither broking house recommends that investors buy the shares, which they say are underpinned by only a 10 per cent yield. Ladbroke, which has lifted the interim payment from 4.7p to 4.92p, has virtually promised to hold the final dividend at 6.23p.
Analysis of Ladbroke's 156 hotels revealed 'disappointing figures', Lisa Gordon at County said. The City was also concerned about a forthcoming property revaluation at the year-end, which could affect 25 per cent of Ladbroke's investment portfolio.
As it is, property losses rose from pounds 12.6m to pounds 14.8m. The company capitalised pounds 3.1m interest on property developments, down from pounds 28.1m.
Overall, interest charges fell from pounds 58.3m to pounds 44.6m and the reduction accounted for all of the profits advance before tax.
After stripping out pounds 23.6m of profits from hotel disposals, the division's operating profits were pounds 44.4m, compared with pounds 52.6m in a period severely hampered by the Gulf war. Peter George, joint managing director, said: 'Hotels is still a tough market. Occupancy rates are not bad, but there is pressure on rate cards.'
The global trading picture of Ladbroke's 50,000 hotel rooms was mixed. Japan suffered a reversal of fortunes, Germany 'was good', and Australia and Canada were bitten by recession.
In betting, the downturn last year in the average wager to less than pounds 4 was arrested. Year-on-year the average bet has risen by 1 per cent to slightly more than pounds 4. However, profits from betting, which includes booking offices, Vernons Pools and US racetracks, fell from pounds 45m to pounds 36.1m.
Profits from the 229 Texas DIY sheds rose from pounds 23.7m to pounds 26.8m. Scottish stores performed stronger than most, and increases in sales volumes offset heavy competitive price discounting.
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