Profits halved at bingo operator

The smoking ban and new gambling laws have created a few problems for bingo operators this year. Top Ten Holdings is amoungst those affected, it has 38 clubs across Wales, the Midlands and the North-West, saw pre-tax profits fall by more than half to £381,000 in the six months to September 30.

The company has also had new restrictions on gaming machines as well as an increased tax burden.

 

In October larger rival Rank, owner of the Mecca bingo chain warned of slumping revenues. Investec analyst Matthew Gerard expects Top Ten's full year pre-tax profits to be £500,000, compared to £2.8m previously "We are concerned trading could deteriorate further in colder weather." . Shares in the St Albans firm, which began the year at 87.5p, slipped 5% to a new record low of 38p today.

 

Top Ten chairman Sir Aubrey Brocklebank said, "Average customer spending levels and club admissions remain very unpredictable and it is difficult to discern any clear trends."  The company is riding out the double impact of the bans and new laws with a cost-cutting plan to reduce overheads. It has also sold five less profitable clubs to lower its debt. The benefits of the savings should be felt in the first half of the next financial year.

 

Top Ten called for an overhaul of the tax laws which bingo operators claim unfairly penalises the sector.

Bingo participation fees are subject to both 17.5% in VAT and 15% gross profits tax (GPT), although bookmakers are only subject to the GPT. Top Ten has joined other operators in lobbying the Treasury for a change in the rules.