By Ian Neubauer

Publicly listed hotel conglomerate National Leisure and Gaming (NLG) cited the negative effects of new smoking laws on the gaming trade for a substantial downgrade to its profit forecast.

The company warned yesterday its earnings for the 2007-08 fiscal year would be 32 per cent lower than previous forecasts and 46 per cent lower than earnings for the previous financial year. NLG’s new pre-tax earning projections stand at $12.6 million — $6 million less than the figure forecasted in October last year.

Most of the state’s large hoteliers converted the gaming areas of their properties prior to the introduction of the smoking ban that came into effect in NSW on July 1 last year. But NLG, which owns 39 hotels and more than 1000 poker machines nationwide, was in the thrust of a major acquisition drive at this time.

NLG planned to complete conversions of its 31 NSW hotels by Christmas. But ballooning construction costs and an immediate capital shortage caused by a botched $26.5 million rights issue has forced the company to temporary stop work.  The 31 conversions are now scheduled for completion in June.

NLG shares fell 1.2 cents yesterday, closing at 8.5 cents. The price regained 6 cents by 2:00pm today but fell back to 8.5 cents when trading closed.

The Shout Team

The leading online news service for Australia's beer, wine, spirits and hospitality industries.

Leave a comment

Your email address will not be published. Required fields are marked *