Bottom Line: Stanley a good bet

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The Independent Online
FOR example, at Stanley Leisure, the bookie and casino operator, happy days are quite definitely here again.

After four years of stagnation, profits for the year to 1 May took off. Pre-tax profits jumped by 50 per cent to pounds 12.4m on a 21 per cent gain in turnover to pounds 265m.

Stanley was helped by acquisitions - but growth in underlying profits was still 20 per cent.

Last year the average bet in high street offices grew 4 per cent to pounds 3.77 and punters spent 20 per cent more in the casinos. Footfall improved and the increase in profits from both sides of the business was consequently strong.

Stanley's shares, up 14p to 333p, have outperformed the stock market by 40 per cent in the past year. They are also trading comfortably above the 275p at which it held a pounds 21m rights issue in March, a move that strengthened Stanley's balance sheet and set the company up for more acquisitions.

The bookie and casino industry is dominated by a few big names such as Ladbroke, William Hill and Stakis. However, there is a long tail of small, single and double location operators where Stanley can find ample opportunity for expansion.

Despite the dividend rising by 25 per cent to 5.25p, the gross yield is less than 2 per cent. Earnings per share - up 44 per cent at 18p last year, could be 20p this time putting the shares on a prospective multiple of 17 times.

Stanley deserves the premium rating. It is a good bet.

(Graph omitted)

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