Football pools group targets new punters

Zetters, the football pools operator, yesterday reported a 26 per cent fall in full-year profits as it continued to suffer from the impact of the National Lottery.

Zetters, the football pools operator, yesterday reported a 26 per cent fall in full-year profits as it continued to suffer from the impact of the National Lottery.

But Anthony Wollenberg, Zetter's chairman, said the company would reinvent itself as an online "lifestyle" betting operator to become less vulnerable to the tough trading conditions in the pools sector.

Zetters' pre-tax profit fell to £1.14m in the year ended 31 March from £1.54m the previous year, while turnover dropped 34 per cent to £10.4m. The figures included an exceptional gain of slightly more than £1m from the disposal of the group's bingo hall interests last July. Zetters will not pay a dividend, but will instead reinvest its earnings to develop the business.

Mr Wollenberg, who was part of a consortium which bought the Zetters family controlling stake in January, emphasised that the figures released yesterday related to the period before the new management was installed. He said: "We didn't invest in this company on the strength of its pools business. We have plans to move into altogether different areas." Mr Wollenberg's team, which was backed by Undervalued Assets Trust, an Edinburgh-based investment company, and Durlacher, the corporate finance group, paid £3.6m, or 135p a share for the 38 per cent holding, valuing the company at £9.7m. Zetters shares yesterday ended down 7.5p at 182.5p.

Mr Wollenberg, who co-founded City Index, the spread betting firm, said the strategy for Zetters would include developing "innovative lifestyle products" and gave the example of weather derivatives which would allow people to hedge against rain at Wimbledon. He declined to expand further but confirmed that the group's development could include making acquisitions, adding that Zetters was monitoring the performance of internet companies on the stock exchange and had a war chest of £7m. Mr Wollenberg also hinted that the group could establish an offshore operation, following the lead of fellow bookmakers such as Victor Chandler, Ladbrokes and William Hill.

Zetters has already dipped its feet into the crowded internet betting market by announcing a joint venture with 365, the online services company, to offer an interactive sports pools website during the Euro 2000 football championship. A full Web gaming service is expected to be launched at the end of summer in time for the start of the new football season.

The decline in the traditional pools market was highlighted earlier this week when Littlewoods disposed of its leisure division for £161m.