Ladbroke buys three casinos for pounds 50m: Gaming Board will investigate background of directors before giving leisure group a licence
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Your support makes all the difference.LADBROKE Group has paid pounds 50m for three London casinos, 15 years after being banned from the business by the Gaming Board and before it has been granted permission to operate them.
The casinos - Maxims, Chesters and the Golden Horseshoe - are being bought from City Clubs, part of Trevor Hemming's leisure empire.
'These are good businesses to be in. They are important in terms of credibility. And the purchase puts an unfortunate episode behind us,' said Peter George, chief executive of Ladbroke.
It could be a year before the UK authorities decide whether to grant Ladbroke a continuance licence to run the casinos. Ladbroke has retained the clubs' existing management. The Gaming Board will investigate backgrounds of directors, and may request personal declarations from shareholders.
Tom Kavanagh, secretary of the Gaming Board, said checks could cover Cyril Stein, who headed the company when it lost its licences in 1979 over allegations of malpractice in its attempts to win business. Mr Stein remains a shareholder.
Ladbroke, which announced a drop in half-year taxable profits from pounds 62.5m to pounds 57.3m, is confident of being found fit and proper to run the casinos.
The US, where growth in gaming is booming, is a target for further purchases. Ladbroke has on and off-racetrack betting operations there but no licences to run casinos or slot machines.
Hotels performed better in the UK and US, although Europe and Japan remained difficult. Trading profits were pounds 44.6m, down from pounds 47.3m. Betting and gaming improved from pounds 42.9m to pounds 49.2m, helped by deregulation in UK betting shops and a rise in the average value of each bet. The Texas DIY retail business returned to profit, making pounds 2.1m against an pounds 8.8m loss.
Leisure analysts were sceptical about the casino plans and disappointed by the half-year results. Peter Hillier at BZW, the investment bank, has downgraded his full-year operating profit forecast by pounds 10m to pounds 130m. Another said that Ladbroke's results were 'a nightmare' to evaluate, mainly because of accounting adjustments.
Pre-tax figures for the latest half included a net pounds 6m exception credit, mainly resulting from an pounds 8.3m deposit received for the termination of its contract to run the Hong Kong Hilton.
Further analysis looks set to be complicated by the FRS5 accounting standard covering sale and leaseback on some hotels and properties. This could increase borrowings by pounds 140m to pounds 210m and add between pounds 10m and pounds 12m to operating profits.
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