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Last Updated: Thursday, 28 August, 2003, 09:41 GMT 10:41 UK
Betting boom supports Hilton
Interior of Ladbrokes betting shop
Old style Ladbrokes is out...
Hilton Group has reported better than expected profits for the first six months of the year, as a boom in betting at its Ladbrokes chain helped offset a weak market for hotels.

The UK group said pre-tax profits fell 15% to 110.5m ($174m) in the period to the end of June - a more modest fall than most analysts had expected.

The group said Ladbrokes was continuing to perform well thanks to steps to deregulate the UK's betting industry including the abolition of betting duty in 2001.

Profits from its hotels fell by 42.6% to 56.1m as the "already frayed confidence of travellers was undermined further by the Iraq war and Sars", Hilton said.

New look Ladbrokes
... the new look is wood floors, cafes and roulette machines
But Hilton added an earlier decision to refocus marketing on domestic and regional leisure had proved successful, helping to maintain hotel occupancy levels and offset a fall in corporate business.

Chief executive David Michels said: "I take the view that hotels will steadily recover but remain uncertain and cautious about the timing and pace of that process."

Deputy chief Brian Wallace added: "We've got encouraging signs in the UK and parts of the Americas while the Asia Pacific is bouncing back from Sars."

He also said that while American numbers remain low the group was hoping for more activity in continental Europe: "Germany is certainly tough and Holland and Sweden are difficult."

The betting division, which also encompasses Vernons pools, saw "much more positive news", Hilton said.

Betting surge

New fixed-odds terminals featuring a number of games including roulette were named as the driving force of recent growth at the group's 2,000 Ladbrokes betting shops.

Revamps, aimed at making the shops more "woman-friendly", may also have helped modestly, with turnover in the division jumping 81% to 3.2bn. Operating profits rose 33% to 101.8m.

But Hilton did warn future growth could depend on the outcome of a court case set for 2004.

Casino operators are trying to block the use of the gaming machines in betting shops claiming the terminals fall outside the remit of bookmakers.


SEE ALSO:
Sars takes toll on Hilton
16 May 03  |  Business
Travel slump drags Hilton down
29 Aug 02  |  Business
Holidaymakers 'overspend by 3bn'
27 Aug 03  |  Business


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