Big payday for Hilton investors as Ladbrokes hits jackpot
Friday 25 February 2005
Ladbrokes, the bookmaker owned by the Hilton Group, unveiled record profits yesterday, up 28 per cent to £273m, as it continues to rake in money from internet gambling and virtual roulette machines.
The Hilton group also announced it was returning up to £400m to shareholders by selling as many as 18 hotels.
David Michels, chief executive of Hilton, said, "Hotel properties are fetching high prices at the moment. There are lots of venture capital groups that are interested in owning hotels. And our shareholders have been asking us about returning cash. It makes sense for us to do this."
The group has yet to be decide which hotels will be sold, but Mr Michels said any of the group's properties was open to offers.
Profits from Ladbrokes' internet operations rose 50 per cent over the year to £21.3m, and profits in its betting shops rose 24 per cent to £215m. Winnings on virtual roulette machines were up 41 per cent and Ladbrokes now takes £584 a week from each machine.
Chris Hill, managing director of Ladbrokes, urged Parliament to push ahead with the introduction of the Gambling Bill, which he said will bring better regulation of the betting industry.
"The laws as they stand are out of date and need to be modernised," he said. As a general election draws near, there have been fears that the Bill will fail.
The Hilton Group hopes to benefit from the Bill's casino proposals. It wants to win one of the eight new supercasino licences that the Gambling Bill will allow.
"We have put in a serious bid for Blackpool because we think we have two strong brands, Hilton and Ladbrokes, that could make the development work," he said. It is also looking at other sites for supercasinos in Birmingham and Brighton.
Pre-tax profits at the group rose 41 per cent to £383m.
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