Big property write-down expected at Ladbroke

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The Independent Online
LADBROKE, the betting, Hilton hotels and property group, is expected to reveal a write-down in the value of its properties of pounds 100m to pounds 150m when it announces its results for 1992 on 4 March.

Profits will be cut and possibly wiped out by the write-down. Analysts expect Ladbroke to reveal profits of pounds 190m including pounds 40m from the disposal of hotels but before the property write-down.

This will be Ladbroke's first big reduction in the value of its property portfolio - valued at pounds 1bn at the end of 1991 - to be charged against profits. Previous write- downs - totalling pounds 189m in 1990 and 1991 - reduced the value of assets in the balance sheet but did not affect profits.

There will also be a further write-down in hotel values, charged directly to reserves in the balance sheet.

In 1991 there was a pounds 56.2m reduction in revaluation reserves, reflecting a reduction in the value of the company's hotels.

City analysts have been expecting Ladbroke to write down its properties following the fall in property values. Some other property companies have written down their portfolios by 15-20 per cent in each of the past two years.

Peter Hilliar of Barclays de Zoete Wedd, the stockbrokers, expects Ladbroke to announce pre-tax profits of pounds 190m after pounds 40m hotel profits but before a property write-down of pounds 100m. This compares with profits of pounds 210m last year.

Ron Littleboy of Nomura says the write-down might be as high as pounds 200m and warns that the company may launch a rights issue to raise cash. But sources close to the company dismiss the rights suggestion. Its last rights issue was in August 1991, when it raised pounds 464m.

In September Ladbroke said it intended to pay an unchanged final dividend of 6.23p a share.

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