Ladbroke, the betting to Hilton hotels group, warned yesterday that competition from the National Lottery would lead to a shortfall in group profits this year. The shares plunged 22p to 132p after the group said there had been a "substantial" third- quarter fall in profits from the betting and gaming division, which includes the UK's biggest bookmaking chain.
Peter George, chief executive, said: "The National Lottery has had a far greater impact on our betting businesses than was anticipated. We have responded by making some 500 people redundant in Vernons and Ladbroke Racing."
Three hundred of the job losses were announced earlier this year, with a further 150 cut at Vernons, the pools business, last week. Analysts said they now expected the betting and gaming division to make only marginal profits in the second half ending in December. Mark Finnie at NatWest Markets said: "People had expected bad news, but they didn't expect the devastation they have seen today." He has slashed his profits forecast for this year from pounds 145m to pounds 120m, some pounds 8.5m below last year's underlying figure.
Shares in other companies with gambling interests suffered yesterday. Rank Organisation, operator of the largest bingo chain, fell 19p to 408p. Bass, owner of the Coral betting chain, slipped 4.5p to 674.5p.
Ladbroke said turnover in Vernons was down 27 per cent in the first nine months of the year. The problems with the Lottery had been exacerbated by this year's hot, dry weather, which had led to smaller fields at races, with resulting poorer returns for bookies, and higher costs due to the start of Sunday meetings this year. There had also been a downturn in credit betting, dominated by big spending overseas clients.
Profits at Hilton International, the hotels operation, were ahead of last year in the third quarter, although the rate of growth had slowed from the first half, Ladbroke said.
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