National Lottery rocks Littlewoods profits
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Your support makes all the difference.The National Lottery hit profits at the pools and retail group Littlewoods, which yesterday warned that the company had yet to feel the full effect of Britain's favourite gambling pastime.
Annual profits at Littlewoods fell from pounds 116m to pounds 97.3m, capping a controversial year in which the UK's largest private company was embroiled in boardroom turmoil and takeover speculation.
Littlewoods, two years into a five-year restructuring plan, dampened suggestions that more executives were about to leave the company, saying that it was now performing strongly.
Although plans to introduce a mid-week National Lottery would hit the company, other business would see a trading improvement, Littlewoods said. "With a bit of luck, the good should outweigh the bad," said Bill Huntley, chief executive. "I would like to think that 1995 is the point from which we grow."
The National Lottery knocked 26.8 per cent off Littlewoods' pools sales, which totalled pounds 623m in 1995. Operating profits slipped to pounds 23.7m from pounds 26.3m. Mr Huntley said that Littlewoods, owned by the secretive Moores family, had settled its differences and was confident that the existing management could carry the company forward.
Littlewoods' Home Shopping mail-order business increased its market share and sales but was hit by a sharp rise in bad debts. Operating profits at the division slipped to pounds 60.7m from pounds 73.9m. The company's Index catalogue business saw operating losses almost static at pounds 7.3m against pounds 7m in 1994, although sales rose 9.5 per cent.
Littlewoods said it now has 20,000 outlets for its scratchcards and weekly turnover of around pounds 1m, which the company admitted was small compared with the National Lottery scratchcard operation. But Mr Huntley said the operation was "profitable".
Littlewoods' current year-on-year retail trading was four per cent up in the period since the company's year end, with sales at Index up 20 per cent.
The results included a pounds 32.2m charge, which will offset the cost in part of Littlewoods' negotiating out of some of its concessions contracts.
The company dropped its tobacco concessions last year and some of its current concessions with retail group Iceland will be dropped this year. The extra space would be used by Littlewoods to expand its Berkertex own- label clothing brand.
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