Hilton Hit As Outsiders Fail To Come First

Hilton Group, the hotelier and owner of the Ladbrokes chain of bookmakers, warned this morning that profits had been hit by a sparsity of unlikely, long-odds winners.

In a trading statement, Hilton said group profits for the first four months of 2005 were 4 per cent down on last year thanks to "tough trading comparatives" at Ladbrokes.

Over the first nine months of 2004, Ladbrokes and other bookmaking groups reported bumper profits after a number of outside shots won major horse races and the 100-1 outsiders Greece emerged victorious from the Euro 2004 football tournament.

Sporting results have since returned to a more normal pattern, leading to a tail-off in earnings growth for most bookmakers.

Hilton said its eponymous hotel division had "continued to improve" over the first four months of the year, with the announced disposal of £300 million to 400 million of hotels "ongoing."

After offloading 11 hotels for £111 million in March, finance director Brian Wallace said the group was poised to sell off a further swathe of UK hotels this summer.

"We are now at an advanced stage of preparation to put a further package of UK hotels on the market in early July, with a view primarily to sale and manage or possibly outright sale," Mr Wallace said.

Looking ahead, Hilton said its hotels operation would continue to make progress over the remainder of 2005, with revenue per available room, the accepted measure of a hotel's performance, set for further improvement.

Meanwhile, the second half of the year should usher in "good" revenue growth and improved profit margins at the Betting and Gaming division following the "challenging" start to 2005, Hilton said.

For the Ladbrokes chain, total gross win for the first four months of the year was in line with last year, with higher turnover offset by a lower proportion of bets won.

Winnings at its UK betting shops fell 1 per cent due to "weak" margins from horseracing wagers, while the telephone betting contribution to group gross win fell 8 per cent over the first four months of the year.

By contrast, Ladbrokes' online operations reported a 23 per cent rise in gross win, Hilton said.

Chief executive David Michels said he was not concerned that archrival William Hill's purchase of casino group Stanley Leisure PlC's chain of betting shops had seen it leapfrog Ladbrokes as the UK's biggest chain.

Stanley's 624 betting offices have swollen the William Hill estate to some 2,237 outlets, compared to Ladbrokes' chain of around 1,900 bookmakers.