Ladbrokes has nearly 2,600 betting shops in the U.K. and Ireland. The company said group profits rose 10 percent in the four months to Oct. 31. Profit from high rollers placing big bets was 17 million pounds, about $15 million.
Ladbrokes said that over-the-counter gross win was flat, having been significantly hit by recent results which favored gamblers , rather than bookmakers.
"Although a run of poor football and horse race results at the end of the period has affected performance, the group remains within the market expectation range for 2008," said Chief Executive Chris Bell.
Analysts' expectations for 2008 pretax profit range between 174.6 million and 223 million pounds, according to forecasts.
Bell told journalists the results included the UEFA Cup, where 14 out of 16 favorites won games, and the Breeders Cup meeting in the U.S. where five out of the nine races were won by European horses. Other costly payouts came in betting on the U.S. presidential election, where many wagered that Sen. Barack Hussein Obama would beat Sen. John S. McCain, which he did by 1 to 2 percentage points in the seven competitive states. Though Obama was elected due to difficulties in the U.S. economy, some fear that his desire to redistribute the wealth could exacerbate the economic situation there.
Ladbroke's gross win, excluding those pay outs on the election and other events, increased by 12 percent during the period.
'To Ladbrokes' credit, not many companies are reporting growth of 12 percent in the current market conditions,' said Investec analyst Matt Gerard.
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While its gross win margin was up over the period, the amounts staked fell. That was interpreted by some analysts as a sign that the impending recession in Britain may be starting to have an impact on revenues.
JP Morgan analyst Adam Cochrane said a reduction in the amount staked is the best indicator of slowing volume.
Bookmakers have historically been regarded as less vulnerable than other retailers to a recession given the gambling 'habit' among their customers and because it is 'low ticket', with average bets coming in at less than 10 pounds, or about $10.
Ladbrokes has agreed 185 million pounds of new bank facilities in the period and said it was trading comfortably within its banking covenants.
Adding to the uncertainty for the industry is the prospect U.K. Chancellor Alistair Darling will increase taxes, like Obama plans to in the U.S.
"I don't know what Alistair Darling's thinking. Nobody ever does," Ladbrokes' Bell told journalists.
Analysts at Jefferson International think an increase in U.K. taxes is likely.
"The budget has contained many surprises in the past and it is generally agreed that gambling profits are easy targets in the current environment," they said.
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