Stanley hit by lucky punters

STANLEY LEISURE yesterday issued its second profits warning in a month blaming falling margins in the betting division as a six-month run of results continued to favour the punters.

Stanley, which is in the midst of a pounds 86.4m agreed deal to buy casino operator Capital Corporation, said pre-tax profits for the year ending 2 May 1999 would be "not less" than pounds 23m, compared with last year's pounds 23.9m

Last year Stanley took pounds 10m in the second half, of which pounds 2m was from the amusements sector. This year's forecasts show second-half figures are down to about pounds 3.5m, with the same pounds 2m holding steady from the amusements.

The low margins in the betting business are being attributed to a combination of bad luck and consistently wet weather, which has left punters well- placed to predict winners.

"A well-fancied horse won the Grand National and a favourite won the Lincoln. They probably lost a million more than they thought on the Grand National," an analyst said.

However, there are worries in the market that the sales mix in betting is changing away from the horses and towards football, which may lead to more consistently predictable results and lower margins for operators.

"A lot depends on whether this is a structural problem or just a six- month issue which will reverse as luck turns," said one analyst.

With the shares closing 5p lower at 246.5p, the stock is trading on a forward multiple of 18. Hold.