Ladbrokes owner's profits held back by racing results

UK leisure group Hilton said today that a "challenging" start to the year at its betting and gaming business had held back profits.

Hilton, which owns the Ladbrokes betting firm, said group profits were 4% lower in the first four months of its financial year.

Ladbrokes has around 2,000 outlets in Ireland and the UK.

A good run of results at events such as the Cheltenham Festival and the Grand National boosted the retail arm last year. But weaker margins in horseracing this time round led to a 1% fall in gross win - the amount left behind by unsuccessful gamblers at its 2,000 shops.

Hilton said in a trading statement: "For betting and gaming, after a challenging start to the year, an expectation of improving margins should lead to good growth in the second half."

Trading at the hotels arm was continuing to recover. The company, which has 500 hotels worldwide, has been recovering from a downturn in the travel sector.

It is in the process of selling a string of hotels to raise between £300m (€435.9m) and £400m (€581m) and hopes to return a large part of the proceeds to shareholders.

During the period to April 30, most regions saw good growth in revenues per available room. Its central London hotels bucked the wider UK trend with an increase of 4.3%.

There was a strong contribution from fixed odds betting terminals with 7,522 installed by the end of April.

Gross win at the firm's eGaming division increased by 23%, although telephone betting gross win was 8% lower than last year.

As well as its hotel and bookmaking operations, Hilton also owns the Livingwell health club chain.

Net debt was reduced to £748m (€1bn) by the end of the period, against £1.04bn (€1.5bn) last time.

In its last financial year, Hilton reported a 41% hike in profits to £383.1m (€556.6m) despite adverse racing and football results at the end of the year. This included a 17% profits increase at the hotels arm.