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As a professional odds-man, Ladbrokes chief executive Chris Bell knows a thing or two about risk. He has spent five months weighing up the odds of buying 888, the internet casino and poker operator that saw its business model decimated by America's draconian ban on online gambling.
Tempting as it was to take out what was left of 888 for a knockdown £450m to bolster Ladbrokes's e-gaming operations, Bell concluded the risk/reward ratio was not in his favour.
His big concern was that the minute it got its hands on 888, it would be hit by a hail of US lawsuits.
So it is back to organic growth for now, which, as Ladbrokes's full-year results last month revealed, is getting trickier. Betting shop costs are rising, the online gambling market is getting more competitive and gone are the days when bookies could bank on big profits from fixed-odds betting terminals. Nor do casinos look such an obvious expansion route now.
But even so, Ladbrokes continues to throw off cash, is expanding abroad and will soon be able to tempt punters with adverts.
On forecast profits of £211m this year, the multiple is 16 times with a 3.7pc yield. With private equity companies regularly circling, the shares continue to be worth owning." |
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发表于 2007-6-15 07:27