The Investment Column: Game on at London Clubs

London Clubs International, the London casino operator, is deservedly starting to attract admirers after having completed two full years on the stock market. Floated at 200p in 1994, the shares have outperformed the rest of the market by 113 per cent following yesterday's 4p rise to 527p.

The cause of this latest strength was evidence of another cracking year for the group. Pre-tax profits jumped 13 per cent to pounds 33.3m in the 12 months to 24 March and, as the record shows, concerns about the volatility of the group's earnings have proved wide of the mark. The dependence on the two upmarket casinos, the Ritz and Les Ambassadeurs, where the big rollers tend to hang out, has been cut from 85 per cent to 65 per cent over the past two years. The reduction was all the more impressive given that both turned in another strong result last year.

By the same token, the middle and down-market operations have taken up the slack, with the Palm Beach in particular continuing the turnaround identified at the half-way. But there are many reasons to believe the story has a way to go yet.

For a start, last October's purchase of the London Park Tower Casino for an initial pounds 16m is likely to chip in pounds 2.5m in its first full year with the group. Then there is the contract to run Lebanon's first casino for 20 years, which LCI won just after the Park Tower deal. The potential there is substantial, given that the group involved will have a 30-year monopoly in the country. The Casino du Liban, which will open in the autumn with 64 tables, well over double the number of London's biggest, is expected to generate pounds 2m of fees for LCI.

Even more substantial is likely to be the impact of the proposed liberalisation of UK gaming laws. The hope that the limit on slot machines will be raised from six per club to two or three per table could add up to pounds 5m to the bottom line, although the benefits could be a while off yet.

Valid doubts remain about LCI. The renewal of the lease on the Ritz casino beyond 1998 has yet to be agreed; Capital Corporation's Colony Club due to open tomorrow in Mayfair will hit custom and Beirut is still hardly a businessman's dream. But with the industry consolidating, LCI's 48 per cent share of the London market has obvious attractions to a bidder. In the meantime, profits of pounds 37m this year would put the shares on a prospective multiple of under 16. A firm hold.

Start your day with The Independent, sign up for daily news emails
Life and Style
Steve Shaw shows Kate how to get wet behind the ears and how to align her neck
healthSteven Shaw - the 'Buddha of Breaststroke' - applies Alexander Technique to the watery sport
Arts and Entertainment
The sight of a bucking bronco in the shape of a pink penis was too much for Hollywood actor and gay rights supporter Martin Sheen, prompting him to boycott a scene in the TV series Grace and Frankie
footballShirt then goes on sale on Gumtree
Terry Sue-Patt as Benny in the BBC children’s soap ‘Grange Hill’
voicesGrace Dent on Grange Hill and Terry Sue-Patt
Arts and Entertainment
Performers drink tea at the Glastonbury festival in 2010
Arts and Entertainment
Twin Peaks stars Joan Chen, Michael Ontkean, Kyle Maclachlan and Piper Laurie
tvName confirmed for third series
Cameron Jerome
footballCanaries beat Boro to gain promotion to the Premier League
Arts and Entertainment
ebookA unique anthology of reporting and analysis of a crucial period of history
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Guru Careers: Software Developer / C# Developer

£40-50K: Guru Careers: We are seeking an experienced Software / C# Developer w...

Neil Pavier: Management Accountant

£45,000 - £55,000: Neil Pavier: Are you looking for your next opportunity for ...

Sheridan Maine: Commercial Accountant

£45,000 - £55,000: Sheridan Maine: Are you a newly qualified ACA/ACCA/ACMA qua...

Laura Norton: Project Accountant

£50,000 - £60,000: Laura Norton: Are you looking for an opportunity within a w...

Day In a Page

Abuse - and the hell that came afterwards

Abuse - and the hell that follows

James Rhodes on the extraordinary legal battle to publish his memoir
Why we need a 'tranquility map' of England, according to campaigners

It's oh so quiet!

The case for a 'tranquility map' of England
'Timeless fashion': It may be a paradox, but the industry loves it

'Timeless fashion'

It may be a paradox, but the industry loves it
If the West needs a bridge to the 'moderates' inside Isis, maybe we could have done with Osama bin Laden staying alive after all

Could have done with Osama bin Laden staying alive?

Robert Fisk on the Fountainheads of World Evil in 2011 - and 2015
New exhibition celebrates the evolution of swimwear

Evolution of swimwear

From bathing dresses in the twenties to modern bikinis
Sun, sex and an anthropological study: One British academic's summer of hell in Magaluf

Sun, sex and an anthropological study

One academic’s summer of hell in Magaluf
From Shakespeare to Rising Damp... to Vicious

Frances de la Tour's 50-year triumph

'Rising Damp' brought De la Tour such recognition that she could be forgiven if she'd never been able to move on. But at 70, she continues to flourish - and to beguile
'That Whitsun, I was late getting away...'

Ian McMillan on the Whitsun Weddings

This weekend is Whitsun, and while the festival may no longer resonate, Larkin's best-loved poem, lives on - along with the train journey at the heart of it
Kathryn Williams explores the works and influences of Sylvia Plath in a new light

Songs from the bell jar

Kathryn Williams explores the works and influences of Sylvia Plath
How one man's day in high heels showed him that Cannes must change its 'no flats' policy

One man's day in high heels

...showed him that Cannes must change its 'flats' policy
Is a quiet crusade to reform executive pay bearing fruit?

Is a quiet crusade to reform executive pay bearing fruit?

Dominic Rossi of Fidelity says his pressure on business to control rewards is working. But why aren’t other fund managers helping?
The King David Hotel gives precious work to Palestinians - unless peace talks are on

King David Hotel: Palestinians not included

The King David is special to Jerusalem. Nick Kochan checked in and discovered it has some special arrangements, too
More people moving from Australia to New Zealand than in the other direction for first time in 24 years

End of the Aussie brain drain

More people moving from Australia to New Zealand than in the other direction for first time in 24 years
Meditation is touted as a cure for mental instability but can it actually be bad for you?

Can meditation be bad for you?

Researching a mass murder, Dr Miguel Farias discovered that, far from bringing inner peace, meditation can leave devotees in pieces
Eurovision 2015: Australians will be cheering on their first-ever entrant this Saturday

Australia's first-ever Eurovision entrant

Australia, a nation of kitsch-worshippers, has always loved the Eurovision Song Contest. Maggie Alderson says it'll fit in fine