High-rollers on a winning streak put LCI in the red
A WINNING streak by high-rollers and disruption from refurbishments combined to push London Clubs International, the casino operator, into the red to the tune of £1.4 million.
The company said that Les Ambassadeurs, its plush London flasghip, had enjoyed strong trading in the first half of the year, but had suffered a sharp dip in the win percentage during December and January as high-rollers struck lucky.
It said that the win percentage had improved “significantly� in February and March — the final two months of its financial year — but this had been too late to offset the earlier performance.
Bill Timmins, LCI’s new chief executive, said he had been encouraged that, even during the period when the win percentage had fallen, the level of drop — the amount bet by punters — had been maintained at normal levels.
He said the refurbishments of The Sportsman and Fifty, its joint venture with Robert Earl, the Planet Hollywood entrepreneur, were now completed and both would be fully operational for the whole of the current financial year.
In the past “challenging� year, LCI had won four new casino licences, he said, the first of which will open in Manchester next summer. It had another two applications in the pipeline.
Mr Timmins said he was also planning to bid for all 17 licences planned under the new Gaming Act, including the single Las Vegas-style “regional� casino.
“We have put together a consortium to bid for the regional casino and have our partners in place,� he said.
The first deregulation comes into effect in October, when more slot machines are allowed in casinos and the so-called 24-hour rule that prevents punters from walking in off the street is abolished. Mr Timmins said that only Les Ambassadeurs and Fifty would retain membership policies, the rest moving to an open-door policy.
Analysts believe that the impact of the new Gaming Act and the addition of the new casinos could see LCI’s earnings before interest, tax, depreciation and amortisation (ebitda) double to £60 million in the next three to four years.
Nigel Parson, an analyst at Williams de Broë, said that the poor results had been well flagged by April’s profit warning. “There is a whiff of the ‘kitchen sink’ about these results. But the company has a new chief executive and things can only get better.�
In the year to March 27, pre-tax losses came in at £1.43 million compared with a profit last time of £2.52 million, while turnover fell from £163.4 million to £143.8 million. Excluding exceptionals, losses per share were 1.4p, against earnings of 3.7p last time. There is again no dividend.
Asked about the intentions of Genting, the Malaysian gaming group that has built a stake of almost 30 per cent, Mr Timmins said: “What their long-term goal is, I cannot say.�
The shares added 2½p to 110p.
FIFTY WAYS TO TEMPT GAMBLERS
Fifty, the new venture between LCI and Planet Hollywood’s Robert Earl, has brought a new dimension to London’s casino scene. It has two restaurants by Jean-Georges Vongerichten, the New York chef, a nightclub and a cocktail bar run by Salvatore Calabrese.
2005-07-12
