A raft of leisure results kept the analysts at Shore Capital busy. While the political to-ing and fro-ing over supercasinos and gambling deregulation is put on hold until the outcome of the General Election, analyst Greg Johnson remains unimpressed with casino operator London Clubs International. Its recent profit warning for the year to March (2005) caused Shore to slash its pre-tax forecast from £12 million to zero. Moreover, Johnson warns the licences it was granted from four UK cities is dependent on deregulation, so no benefit can yet be added and the volatility in the high-end casino market will always remain. He retains his sell recommendation.

One gambling-related company Johnson is keen on is racecourse owner Arena Leisure. Representing 25 per cent of the UK fixture list and owning 47.5 per cent of At The Races, where it hopes to exploit racing media rights, Johnson reckons Arena’s 1,750 acres of land make it a significant asset play with opportunities in property development. He believes it may also benefit from potential changes in the racing industry including the distribution of funding and additional fixtures, which could be worth an extra £2 million of annual profit. He rates the company a buy.

Away from the betting arena, Johnson remains bullish on late-night bar and nightclub operator Ultimate Leisure. Noting the drop in the share price, which he senses is a result of directors selling their shareholding, Johnson suggests the weakness presents a good buying opportunity. He forecasts the company is on target to bring in pre-tax profits of £10.8 million this year and given the prospective p/e of 8.8, believes it is a buy.