Bottom Line: Stanley a good bet

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The Independent Online
A POUNDS 1 FLUTTER on Stanley Leisure three years ago would today be worth pounds 4, and the company is now offering investors odds on its future with a 3-for-17 rights issue at 275p a share. The pounds 21m being raised will be spent on its twin cash generators - betting shops and casinos.

Stanley is clearly close to winning one acquisition of a seven-strong chain of betting shops, and is in the final furlong on a couple of other deals.

The block-building approach to acquisitions makes sense in a market where small operators are losing touch with punters because of the better services on offer from front-runners like Stanley, Coral, William Hill and Ladbroke.

Interim results to 31 October, also released yesterday, show Stanley is managing its existing assets well. Taxable profits, including contributions from one extra casino and more than 30 betting shops, rose 52 per cent to pounds 5.4m.

The average amount wagered per slip in the bookies rose from pounds 3.40 to pounds 3.66. Casino users, whose numbers rose by 7 per cent to 2,000 a week, increased their average drop by pounds 4 to pounds 86 per visit.

Stanley, which has lifted the interim dividend 15 per cent to 1.75p, is virtually promising a 21 per cent hike in the total payout giving a gross yield of 2 per cent. Analysts expect profits of pounds 11m for the year, rating the shares on a p/e of 20.

Leonard Steinberg, chairman, is not taking up his entitlement on 30 per cent of the rights because of his charity commitments. Other investors, however, should increase their stakes.

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