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UK´s Stanley to Invest 100 Mln Stg in Casinos
2005-08-25
Britain´s Stanley Leisure Plc will spend 100 million pounds ($176 million) on its casinos and bid aggressively for new licenses, the company said on Monday as it posted a 4 percent fall in annual profit.
Britain´s biggest casino operator sold its UK betting shops in June to focus on a gaming industry where membership rules are being scrapped and operators are being allowed to install more gaming machines, with higher stakes and prize levels.
A new gaming law, passed in April, stopped well short of original plans to allow Las Vegas-style casinos across Britain, but still permitted 17 new venues, including a so-called regional supercasino.
"We will bid aggressively for the 17 new licenses...(and) bid aggressively for the regional casino wherever it is," Stanley Chief Executive Bob Wiper told.
The UK government has set up a body to assess local authority bids for the regional casino, which will be judged in part on their ability to regenerate the locality.
"Blackpool has to be a strong favorite in that regard," Wiper said on a conference call, adding he did not mind where the new supercasino was based and that London, Cardiff and Glasgow were also viewed as strong candidates.
Stanley posted a profit before tax and goodwill of 40.1 million pounds for the year to May 1, just below analysts' median forecast of 41.8 million.
A strong rise in casino profits was offset by a fall in betting shop earnings, which were hit by a string of unfavorable sporting results, particularly soccer.
"The new financial year has started satisfactorily across our casino estate," Stanley said in a statement, adding its retained international betting operations had had a quiet start.
5-YEAR PLAN
Stanley said it planned to spend more than 100 million pounds on its casino estate, expanding its existing 41 sites and applying for a further five licenses under old government rules.
Wiper said the five-year plan would increase floor space by about 60 percent and the firm would increase slot and electronic roulette machines from 930 to 1,925 within six months of new legislation coming into force.
Greg Feehely, an analyst at Altium Securities, welcomed the investment, but said Stanley's shares were already fairly valued after rising strongly on the sale of its UK betting shops and a subsequent pledge to return 325 million pounds to shareholders.
At 0945 GMT the shares, which have outperformed the UK leisure sector by about 20 percent this year, were down 0.3 percent at 538-1/2 pence.
Wiper did not expect the firm's London casinos to suffer from any drop in tourism following bomb attacks that killed 55 people in the city earlier this month.
"These are visitors -- high rollers -- who are coming to London usually to pick up their children from school and having a break at the same time. They would be traveling to London anyway," he said.
Wiper also declined to comment on media reports that Malaysian leisure group Genting, which holds large stakes in both Stanley Leisure and rival London Clubs International Plc, might seek to merge the two firms.
Stanley proposed a final dividend of 7.5 pence a share, taking the total for the year to 10.5p, up 11 percent.
