Ladbrokes profit falls on fewer big bets, by Matthew Scuffham
LONDON, Aug 7 (Reuters) - Britain's biggest bookmaker Ladbrokes reported lower first half profits on Thursday with fewer high-stake gamblers and unfavourable results at major sporting events.
Pretax profit before non-trading items fell to 134 million pounds ($262.1 million) in the six months to June 30 from 159 million the year before, matching the consensus forecast in a poll of nine analysts.
Profit from high rollers fell 33 percent while Ladbrokes also suffered in June from favourites winning at Royal Ascot and Euro 2008.
However, the company reported strong current trading. Gross win -- total bets minus payouts -- in the period from July 1 to Aug 5 was up 11 percent, including 6 percent growth in UK retail.
Chief Executive Chris Bell said the business had shown "resilience against a challenging economic backdrop".
"We see no sign of any downturn so you could argue the business certainly remains as resilient as it has been in the past as a minimum," Bell said.
Bookmakers are widely regarded as being less vulnerable than other retailers to a recession given the habitual nature of gamblers and because it is a "low ticket" industry, with an average bet of less than 10 pounds.
Ladbrokes said it remains on track to meet its full year expectations. Forecasts for underlying pretax profit range between 185 and 225 million pounds, with the consensus standing at 206 million.
Shares in Ladbrokes, which have outperformed the FTSE All Share Travel and Leisure index .FTASX5750 by 2 percent since the start of the year, were up 1.1 percent at 253-1/4 pence at 0940 GMT.
Dresdner Kleinwort reiterated its 'buy' recommendation and 380 pence price target, saying current trading was ahead of its expectations.
Numis analyst Richard Carter, who has an 'add' recommendation and 292 pence target price on the stock, raised his 2008 pretax profit forecast by 14 percent to 214.7 million.
However, he cut his 2009 forecast by 11 percent to 185.6 million to reflect the weakening economic outlook.
Ladbrokes is paying an interim dividend of 5.1 pence, up 5.2 percent.
Excluding high rollers -- gamblers who place five-figure sums on individual bets -- gross win increased by 13 percent to 583.3 million. UK retail gross win rose by 6.5 percent to 394.3 million.
Operating profit from high rollers declined to 40 million pounds over the period, from 60 million the previous year.
Bell said high roller activity -- notoriously volatile and hard to predict -- is currently "very low". He did not think the drop in activity was reflective of the declining economic environment.
"These are high net worth individuals. I don't think the recession will be affecting them at all," he said. (Reporting by Matthew Scuffham; Editing by Elaine Hardcastle)
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