Lucky punters are bad news for Stanley Leisure

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The Independent Online

High rollers on a winning streak - the curse of any casino owner - coupled with a £3m backlog of gambling debts yesterday forced Stanley Leisure to issue a profit warning.

High rollers on a winning streak - the curse of any casino owner - coupled with a £3m backlog of gambling debts yesterday forced Stanley Leisure to issue a profit warning.

The company, which owns the upmarket Crockfords casino in London's Mayfair, warned that unless it manages to call in the debts before it reports its preliminary results in July, its profits will miss City forecasts.

Shares in the group fell 7p to 460p on the news, which overshadowed a strong performance from its string of betting shops. Analysts said the share price fall was cushioned by the prospect of gaming deregulation, which has helped the group's stock to almost double in the past 12 months.

The company said Crockfords' run of bad luck, which saw it only break even during the first half, had continued. Worse still, its losing streak extended to one of its three other London casinos - the Colony Club - it added. Both had a low "win margin" during the second half, which means that its customers got luckier than its croupiers.

Analysts, who had expected the group to report pre-tax profits of £45m, knocked up to 14 per cent off their forecasts. Goldman Sachs cut its profit forecast to £39.7m from £45.3m.

However, the company said it could end up beating the £41.3m it achieved last year "depending upon the level of debt recovery over the next two months". Bob Wiper, the chief executive, was confident that the debts would eventually be paid because otherwise the debtors would be blacklisted from other casinos.

Greg Feehely, an analyst at Altium Securities, said: "A lot of people have had a lot of luck at Stanley's casinos this year." He expects Stanley's London casino estate, including the Palm Beach which it acquired from London Clubs last year, will make less than £10m profits this year, against £20m last year - a "supernormal" year.

Stanley Leisure said the performance of its provincial casino estate had been held back by increased competition from rivals, who have sharpened their game ahead of the pending deregulation.

Although some of the more stringent rules governing the gaming sector have been eased, such as allowing alcohol and live entertainment inside casinos, additional capacity has soaked up any additional demand.

The group's new 70,000 sq ft Star City casino complex in Birmingham continued to make a loss, it said.

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