William Hill became the second British bookmaker to issue a profit warning when it said yesterday that its second-half performance had been hit by a poor run of sporting results.
Britain's second-biggest betting shop chain followed its rival, Stanley Leisure, in warning that less favourable horse racing and soccer results had adversely affected it in the second half.
"This trend, which is consistent with normal variations in sporting results, continued to prevail in the closing weeks of the year," William Hill said.
As a result, it expects basic earnings per share for last year to be in the region of 36 pence, still 20 per cent ahead of the previous year but below market expectations of more than 38 pence.
Last week, shares in Stanley Leisure fell sharply after the group warned that first-half profits would only be broadly in line with the year-earlier period.
While it cited company specific factors relating to its gaming division, it also mentioned unfavourable sporting results within its betting division.
However, Paddy Power is not expected to follow its British rivals with a profit warning.
According to analysts, the Irish bookmaker has less exposure to soccer, the main problem for its British counterparts in the second half of last year, and remains on track to report 2004 results that are broadly in line with market expectations.
"We are not anticipating Paddy Power to release a similar trading statement and we expect it to report a set of financial year 2004 results that are broadly in line with market expectations," Goodbody Stockbrokers said yesterday. Paddy Power is due to release its 2004 results at the end of February and brokers are forecasting earnings per share of between 57 and 60 cents.
NCB noted that while the Irish bookmaker was unlikely to remain immune from the poor run of sporting results, it should continue to benefit from the rollout of its betting estate in Ireland and Britain. "The underlying fundamentals of the business remain unchanged, with future growth set to be driven by the online businesses and continued expansion of its betting shop franchise," NCB said.
