Market Report: City refuses to bet on bookies despite delay in MPs’ review

Jamie Nimmo
Off course: Ladbrokes took a battering as traders lost faith in bookies: PA

The MPs’ betting review might have been pushed back a few months thanks to the General Election, but indications that the UK gambling market is having a tough time meant investors in the bookies didn’t hang around to learn the outcome.

Ladbrokes Coral was to blame for the sell-off after it revealed UK retail revenues, its main source of income, fell 2%, with stakes down 7% in the first 16 weeks of the year, even as overall revenues rose 5%.

The review into fixed-odds betting terminals — dubbed the “crack cocaine” of gambling — has been delayed by the election until the autumn.

Tougher regulations could cut the maximum bets on the addictive machines from £100 to as little as £2, which some analysts believe would hammer the bookies’ profits. Ladbrokes Coral, for instance, generates a third of its profits from FOBTs.

Shore Capital saw some promise in the hold-up and said today that although “the likely delay in the triennial review” was “frustrating” it would give bookies the time to reduce their exposure to the High Street and move operations online.

Investors weren’t so optimistic: shares fell 5.1p, or 4%, to 123.3p, and rival William Hill was down 5.5p, or 2%, to 290.9p.

Corporate results came thick and fast but it was a mixed bag for the blue-chips. Thankfully, Royal Dutch Shell and HSBC, the UK’s two biggest companies by market value, were on the winning side, with the oil giant up 50p at 2110.5p and the bank 20.1p higher at 665.3p.

Their improvements lifted the FTSE 100 by 24.17 points to 7258.70, but the index would have been flat were it not for the duo.

Insurer RSA, up 12p at 616p, joined them, after confirming a solid start to the year, with net written premiums of £1.71 billion, up 4% once currency movements are stripped out.

A 10.2p rise from G4S took its shares up to 324.7p as it plots a course for its return to the FTSE 100 after its ejection in 2015. A strong first-quarter sent its market value above £5 billion for the first time.

Trinity Mirror, off 1.25p at 112p, lost yesterday’s gains as the newspaper publisher said trading was in line with forecasts but still challenging.