City: Ladbroke short on luck

NOT SINCE the dark days of 1979, when Ladbroke Group was stripped of its casino licences, has investment confidence in Cyril Stein's hotels-to-betting-shops group been so low. A botched announcement over foreign income dividends (which had even the company's own brokers fuming), the departure of Hilton International's chief executive after a management row, and another flurry of brokers' sell circulars once again put the shares in free fall last week; they now yield well over double the average for the FT-SE 100. Rightly or wrongly, institutions are beginning to believe there must be something seriously wrong.

Mr Stein is due to retire as chairman and chief executive at the end of this month. As yet there is little sign of him doing so, and he's apparently still as active as ever. But even if he sticks to his word and goes, will it be enough to appease increasingly worried investors?

Peter George, heir apparent as chief executive, has been Mr Stein's runner for years. John Jackson, the intended chairman, is an accomplished and experienced enough operator, but he's also been on the Ladbroke board for more than a decade. If, as seems likely, Ladbroke needs a rights issue to pay off bondholders and restore its balance sheet, institutions are going to demand much more radical change.