London Clubs says takeover 'not vital'

A successful takeover of Capital Corporation was not vital to the future of London Clubs, said Alan Goodenough, chief executive of the casinos company, yesterday.

Margaret Beckett, the President of the Board of Trade, is expected to give her verdict on the bid in three months' time, after reading the recommendation of the Monopolies and Mergers Commission, which should be complete by 7 July. Representatives from the two companies both gave evidence to the MMC on Monday.

The outcome of the bid fight, however, could be complicated if London Clubs is given the green light. This could then lead to counter-offers for Capital being launched by other rivals, such as Ladbroke, which could then trigger a further monopolies investigation.

And London Clubs would also certainly have to raise its bid terms if the Department of Trade and Industry gives it the go-ahead to relaunch its offer. Its shares rose 5.5p to 396.5p yesterday, which values its previous all-paper offer at 186p per Capital share. Capital gained 0.5p to 190.5p.

London Clubs yesterday reported a 6 per cent rise in profits to pounds 35.2m for the year to 30 March, after absorbing the costs of the bid, which have reached slightly more than pounds 1m to date. Turnover was up 7 per cent and operating profits by 9 per cent to pounds 37.5m, helped by strong trading in February and March which more than offset a lull in October and November.

Earnings per share before the bid costs rose 12 per cent to 16.8p and the final dividend of 5.63p makes 8.25p for the year, an increase of 6.5 per cent.

The strength of sterling and the underlying UK economy have little impact on the high-rollers who still account for 64 per cent of the group's profits, but the profit margin at the Ritz Casino fell to the mid-teens from its normal 20 per cent as luck favoured the punters.

The seven UK casinos still contributed over 95 per cent of profits but the overseas business is growing strongly.