Britain's Hilton Group said it had completed the sale of its hotel division on Thursday and was renaming itself Ladbrokes Plc — a pure gaming company using the Internet to exploit opportunities in Europe and Asia.
The group was laying out its plans alongside its annual results, following the sale of its Hilton International division to its U.S. namesake Hilton Hotels Corporation for $5.8 billion (3.3 billion pounds).
"Through e-gaming we reach into 200 countries around the world, and there's the intention to push that even faster," outgoing Deputy Chief Executive Brian Wallace told Reuters.
Hilton reported a 10 percent rise in year profit and said it would return up to $7.3 billion (4.2 billion pounds) to shareholders early in the second quarter following the hotel sale.
The Ladbrokes Plc name will be registered later on Thursday and Hilton Group Plc dropped.
Profit before tax rose 9.9 percent to 413.9 million pounds in 2005 and operating profit from online gaming nearly doubled to 41.4 million.
"When we said four years ago this business could make 50 million, people laughed," Wallace said of the online gaming division. "Well, we're a long way towards that."
Rosemary Thorne, the new group finance director, said Ladbrokes was in a number of discussions for ventures in Europe and Asia.
"But these are very small acorns and not all of them will grow into big trees," she added.
Frosty ground
Ladbrokes said its betting offices had suffered from the cancellation of 19 horse race meetings in January due to frost compared to five a year earlier. But its online gaming division continued to be successful and telephone betting was recovering.
"The weak results reflect a poor performance in the retail business, with like-for-like gross win down 2.3 percent," said Charles Wilson at Bridgewell Securities.
"These results support our view that growth outlook for land-based bookmaking is weak," he added.
Thorne said betting operations had suffered from costs associated with the acquisition of Jack Brown with over 140 betting shops last year.
"During 2006, we see things on a like-for-like basis flattening out slightly," she told Reuters.
Chris Bell, the chief executive of Ladbrokes, who takes control of the group, said it would soon review the policy of not taking online bets from the United States, where the legality of online gaming remains ambiguous.
Thorne said telephone betting was recovering from a bad year in which an operating loss of 100,000 pounds was made worse by 9.5 million pounds of net losses to big winners, known as "high rollers".
"I'm glad to say we've won that back again — all of it and more," she said.
Thorne said Ladbrokes would continue to expand its betting shops, but at a slower pace than recently.
"It'll now be small numbers of acquisitions, relocations and refurbishments," she said. "We believe there's room for probably another couple of hundred stores in the UK, but we'll take opportunities as and when they become available."
