Gaming group Wembley today said its efforts to emerge from the turbulence of an aborted takeover had been stymied by a weak US dollar.
In the UK, the group operates greyhound tracks at Belle Vue in Manchester, Perry Barr and Hall Green in Birmingham, Wimbledon, Oxford and Portsmouth.
UK operating profits were 43% higher than a year ago at £2m after the group closed loss-making Catford stadium.
Race meetings at Wimbledon were also cut to three after the decision to add an extra meet to the weekly race schedule failed to generate enough revenues to cover the additional costs.
Although attendances were down as a result of these actions and the impact of the Euro 2004 football championships, Wembley said catering spend per head was 5% ahead of a year ago.
Redevelopment of Perry Barr stadium has also begun and the new facilities, which include an improved restaurant enclosure and bar area, are expected to open in time for Christmas.
The group, which saw a £308.9m offer by US consortium BLB Investors collapse in July, said adverse currency swings had shaved £2.2m from its half-year results.
Higher profitability at its six greyhound tracks in the UK failed to make up the shortfall as pre-tax profits fell 5% to £17.6m.
Chairman Claes Hultman said the introduction of more lottery terminals had offset a lower share of lottery revenues in the US, where it generates more than 90% of profits through developments including a casino in Rhode Island.
He described the past 12 months as a “turbulent period”, with the disappointment of the failed takeover by BLB compounded by a legal row in the US.
But a dividend of 19.5p offered shareholders a degree of comfort after payments were suspended in March due to the bid situation.
Hultman said: “Wembley remains a well run, profitable and highly cash-generative business with a strong balance sheet and good growth prospects in both is US and UK businesses.”
BLB Investors cited political uncertainty surrounding Wembley’s US business as one of the reasons for its decision to withdraw its offer for the group in July.
Wembley countered this by saying it believed proposals for a casino in Rhode Island, which could rival its own Lincoln Park gaming business in the state, would be unlikely to have a significant impact for several years.
Costs racked up during the takeover situation totalled £6m, although these were more than offset by an exceptional gain on the sale of Catford dog track in south London.
Lincoln Park is also involved in an ongoing court case in which the division and two Wembley executives are facing a bribery lawsuit.
Wembley reiterated in its update today that it would vigorously defend itself against the allegations, which it said were without foundation.
References: EGi News 02/09/04
