The future is still a lottery for Stanley; The Investment Column
Thursday 16 January 1997
Add in the prospect of a change of government, most likely to a party for which gaming reform is pretty low down its list of priorities, and the outlook is at best uncertain. The long-term picture, however, remains attractive.
Stanley's betting shops are a good example of the extent to which the industry has been prodded by the National Lottery into creating a better quality earnings stream. Thirty years ago the harsh winter of 1963 effectively shut down the country's betting shops because there was no racing. Now bookies take bets on four televised football matches a week, the Irish lottery and a new rival to the Nation Lottery called 49s. It is a much better balanced business and even within the 72 per cent of turnover represented by racing, all-weather tracks have made meetings more reliable.
Even diversification, however, cannot be expected to protect against a 25,000 to one long-shot like Frankie Dettori's clean sweep at Ascot last year. Stanley's pounds 2m hit on that day in effect wiped out profits at its new Gus Carter acquisition and pegged the pre-tax profits rise for the six months to October to 21 per cent.
Profits before tax moved ahead from pounds 6.2m to pounds 7.4m, pushing earnings per share from 3.76p to 4.51p. That meant Stanley was able to recommend a 20 per cent rise in the interim dividend. These were impressive figures but analysts still managed to find one or two niggling worries.
Analysts' biggest concern lay in evidence of margin pressure in both the bookies and casinos, where punters are said to be getting better at beating the house, by fair means and foul. Better training is expected to give staff a sharper eye and improve Stanley's return. There were also worries about a pretty anaemic 3 per cent rise in sales from the betting shop arm. The success of betting on the Irish lottery might have been expected to boost turnover by more than inflation.
Still, most brokers were talking about raising their forecasts yesterday and a full-year outcome of about pounds 23m now looks likely. That would put the shares, up 17.5p to 294p yesterday, on a prospective price-earnings ratio of 22. It is right the shares should trade at a premium to the market, to reflect the benefits of deregulation to come, but with so many question marks over the company as well that rating is high enough.
- 1 Malaysia Airlines MH17 crash: Pro-Russian rebel 'admits to shooting down plane'
- 2 Israel has discovered that it's no longer so easy to get away with murder in the age of social media
- 3 Israel-Gaza conflict: The myth of Hamas’s human shields
- 4 Amy Winehouse unpublished 2004 interview: ‘Ten years from now I’ll be 30, so I’ll maybe have one baby’
- 5 Dutch paedophile club to fight their ban at the European Court of Human Rights
Lana Del Rey: 'I have slept with a lot of guys in the industry'
Peaches Geldof cause of death: 'Heroin addict' socialite had taken fatal dose of drug, inquest concludes
Peaches Geldof inquest: Tragic final moments of socialite's life reveal she lied to husband about failed heroin tests
Israel-Gaza conflict: The myth of Hamas’s human shields
Malaysia Airlines MH17 crash: Was a Russian-made missile really parked in this quiet square?
Malaysia Airlines flight MH17 crash: 'Nine Britons, 23 Americans and 80 children' feared dead after Boeing passenger jet is 'shot down' near Ukraine-Russia border
Malaysia Airlines MH17 crash: Vladimir Putin is given 'one last chance' to end hostilities in Ukraine
The 'scroungers’ fight back: The welfare claimants battling to alter stereotypes
The truth about conspiracy theories is that some require considering
Malaysia Airlines MH17 crash: Ukrainian military jet was flying close to passenger plane before it was shot down, says Russian officer
Malaysia Airlines MH17 crash: Massive rise in sale of British arms to Russia
iJobs Money & Business
£350 - £400 per day: Orgtel: PMO Analyst - Banking - London - £350 -£400 per d...
£300 - £350 per day + competitive: Orgtel: Cost Reporting Manager - MI Packs -...
£35000 - £40000 Per Annum plus 23 days holiday and pension scheme: Clearwater ...
£475 - £525 per day: Orgtel: Test Lead, London, Investment Banking, Technical ...