Thursday morning business bulletin

Apr 24 2008 By Andrew Mernin

Bookmaker William Hill today said there had been no signs of a drop off in business, despite the tougher economic conditions.

The company’s gross win - the amount left by losing punters - increased by a "satisfactory" 5% in the 16 weeks to April 22.

Extended winter opening hours meant the win percentage for the company’s retail estate grew by 7%, with over-the-counter business ahead by 3%.

Sporting results were generally favourable for William Hill, with the Cheltenham Festival meeting expectations. The Grand National, which was won by joint-favourite Comply or Die, was disappointing for bookies, but the Aintree meeting overall provided a ``reasonable outcome".

The longer opening hours meant William Hill’s gross win from gaming machines jumped 16% in the period.

The company’s retail arm, which operates from more than 2,000 sites in the UK, has helped offset disappointing internet trading.

William Hill said: ``The group is focused on maintaining and developing its strong retail channel. At this stage of the year it has not seen any evidence of a slow down in consumer spending affecting its business."

A depressing trading update from Charles Church firm Persimmon caused shares across the housebuilding sector to go into reverse today.

Persimmon shares were 8% lower in the top flight - a fall of 50.5p to 599.5p - after warning that house market conditions were likely to deteriorate further. Revenues were down 24% this year with margins also under pressure.

The update reflected the mood of the London market, with the FTSE 100 Index down 42.6 points at 6041 in the first hour of trading.

Investors were also affected by guidance from Barclays that first quarter profits were below the level of last year. Chief executive John Varley sought to reassure over the company’s overall health, but shares fell 10.25p to 445.5p.

Royal Bank of Scotland also declined 10.5p to 334.5p and Halifax Bank of Scotland dipped 14p to 486p.

Retailers were under pressure, as downgrades from Pali International for Marks & Spencer and Next contributed to falls of 6p to 357.75p and 26p to 1090p respectively.

Banking group Barclays said today first quarter profits were down on last year after a sharp decline at its investment banking arm.

Chief executive John Varley said results from the group’s retail and commercial banking increased year on year during the first three months of 2008, but that its Barclays Capital arm was well down on last year’s strong showing.

In a statement released ahead of the group’s annual general meeting today, he said overall trading during January and February had been in line with 2007 but ``tougher" conditions in March dragged the quarter down.

Barclays has been tipped to follow rival Royal Bank of Scotland and raise new capital from investors to bolster its balance sheet amid the credit crunch.

Mr Varley made no explicit statements about the need for extra funding but said: ``We will remain active managers both of our balance sheet, and of our capital ratios."

He also alluded to the difficult times being faced by banks but said there was a need for a sense of perspective. ``It’s very important that risk management doesn’t become risk aversion," he said.

The pound at 9am was US$1.9812 compared to US$1.9785 at the previous close while the euro at 9am was £0.7998  compared to £0.8033 at the previous close.