Ladbrokes owner Hilton reports profits dip in hotel business

Leisure group Hilton sounded a confident note about its future today despite first-half profits at its hotels in the UK and Ireland falling by more than a fifth.

Hilton, which owns the Ladbrokes betting firm, said forward bookings for 2006 looked more positive after the division saw profits slip 22.6% to £30.1m (€44.2m) in the six months to June 30.

It added that the arm was showing signs of improvement despite the “short-term impact” of the July London bombings.

Overall, underlying group pre-tax profits increased to £191.3m (€282.4m) from £192.1m (€282m) last time, as a tough first half for Ladbrokes was offset by a better performance from its worldwide hotel chain.

Hilton said: “The outlook for the group remains strong with Ladbrokes and Hilton both enjoying steady growth.”

The hotels division increased operating profits by 10.7% to £72.6m (€106.6m) after “healthy” growth in revenues per available room in all areas of the world, apart from the UK and Ireland.

High levels of occupancy in London were offset by more difficult trading elsewhere in the UK, with difficulties in the leisure and conference business – particularly at the Birmingham Metropole.

Five major hotels owned by the group showed a decline in revenues per available room, hitting profits.

Within the wider hotels division, encouraging signs seen last year in both corporate and leisure continued into the first half. The improvement included a 43.4% hike in profits in the Americas to £10.9m (€16m).

The company, which has around 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 (€440.5m) and £400m (€587.3m) and hopes to return a large part of the proceeds to shareholders.

Ladbrokes saw operating profits fall by 6% to £143.6m (€210.8m) after it suffered from unfavourable results at major sporting events including Aintree and Epsom, as well as tough comparatives from last year’s European Football Championships.

The firm recently upped the stakes in the battle for the title of the UK’s biggest bookmaker when it announced it was buying 141 family-run betting shops.

The £76m (€111.6m) deal for the Welsh chain Jack Brown came after rival William Hill seized top spot with the purchase of 624 shops from Stanley Leisure. Ladbrokes now has 2,266 shops in the UK and Ireland, as well as outlets in Belgium.