In the six months to 1 November, however, the luck was running with the bookies and he was able to report a 43 per cent improvement in profits to pounds 14.5m. Turnover from the chain of 480 betting shops increased by just 2 per cent to pounds 214m, with all the increase coming from the 11 shops acquired during the half year.
However, profits rose by 52 per cent from pounds 7.7m to pounds 11.7m, including a one-off profit of more than pounds 1.3m on takings of pounds 4m from World Cup soccer. This was helped by a better profits mix, which is company-speak for an increase in takings from numbers games, betting machines and betting on soccer where the structure of the bets favours the bookies much more than in the staple business of horse race betting.
Profits from the group's 24 casinos went up 18 per cent to pounds 5.6m, with a healthy increase in margins, but once again the increase in turnover was small and came from acquisitions. The weather can play a big part in the final quarter of the year when rain and frost can reduce the amount of racing.
Casino profits continue to benefit from the gradual deregulation of the industry. The rules currently allow six slot machines in each casino with a maximum jackpot of pounds 1,000, although 10 machines should be allowed by May or June this year. There are plans to allow up to 25 machines per casino with no maximum stake, and potential pay-outs of pounds 100,000.
Betting is not immune to recession, especially an increase in job insecurity, but it is less sensitive to a down-turn than manufacturing and Stanley Leisure certainly withstood the recession of 1991 with relative ease.
Stanley, which was outbid for the Coral chain of betting shops last year, has no intention of paying the pounds 1bn that Nomura is asking for the William Hill chain that formerly belonged to Brent International.
It is contemplating a number of potential acquisitions but Mr Steinberg also sees little point in trying to bring betting shops into the era of the Internet and spread betting. Instead it prefers to concentrate on refurbishing its shops and providing punters with the atmosphere of working-men's clubs.
Mike Kershaw, Stanley Leisure's chief executive, is retiring and will be replaced in April by Robert Wiper, currently chief executive of the coach division of National Express, it was announced yesterday.
Mr Wiper has no direct experience of the betting game, but his background, which also includes National Tyres and Pickfords Worldwide, gives him experience of customer-focussed industries, which is an essential element of Stanley Leisure's business, Mr Steinberg said yesterday.
Mr Steinberg remains "confident of a satisfactory outcome for the full year". Analysts yesterday edged their forecasts for the year to 30 April up by about pounds 1m to pounds 28.5 to 29m, and earnings per share of 17.8p to 18.5p. But the market was more circumspect and the shares shed 8p to 303.5p.Reuse content