Dealers take a flutter on the bookies

THE staggering total of 135 profits warnings in the last three months tells its own story. Trying to find winners in these markets would test the wisdom of Solomon and the nerves of George Soros. Undaunted, some dealers think it worth saddling up for a ride on some quoted bookmakers. 'However hard things get, people can still find a few pounds for a flutter on a race or a football match,' said one trader.

Power Leisure, the Irish chain that trades as Paddy Power and has been cantering into the UK to open shops and online trading, is known to be very happy with business. At 229p, the shares are off their peak, but have come up from 163p.

Online bookie Sportingbet.com is also finding the going firm, issuing an encouraging trading statement despite widespread postponement of sporting fixtures after 11 September. Chief executive Nigel Payne said: 'When people have no money, they treat themselves to a bet. When they are flush, they also have the money to do it.' But concerns over overseas expansion left Sportingbet 5 1/2p easier at 94p.

The bookies are benefiting from the recent abolition of the old betting tax. Some analysts believe Stanley Leisure, 2 1/2p off at 277 1/2p, and Ladbroke owner Hilton, 5 3/4p lower at 179 3/4p could see a sharp uplift in business, although Hilton may be suffering from lower occupancy in its hotels.

London shares ended sharply lower, the blue-chip FTSE 100 closing 102.7 down at 5085.9. There was evidence of a move towards defensive sectors such as utilities, with International Power climbing 10p at 224p and Centrica firming 4p at 220p.

Hopes of any late rally faded as Wall Street plunged straight into the red. Economic figures this week are expected to show the US firmly in recession. The dollar fell, too.

Bob the Builder is certainly hammering home the profits for media group HIT Entertainment. Last year's earnings, before exceptionals, soared 53% to £7.9m. Chairman Peter Orton is paying £13.8m for the rights to Pingu, a penguin character popular with pre-school children. Bob is now a massive hit in the US, prompting analysts to lift next year's forecasts to around £20m on more-than-doubled turnover of £100m. But broker Old Mutual claimed the current multiple of 35 looks too pricey and a sum-of-the-parts valuation of 295p is more realistic. After a recent strong run, HIT finished 30p off at 316p.

B&Q group Kingfisher fell 12p to 335p on reports of a possible board shake-up. New chairman-designate Francis Mackay is thought to be keen to see the back of chief executive Sir Geoff Mulcahy. He will then engineer the £2bn buyout of French DIY business Castorama.

Analysts remain cautious of retailers ahead of Christmas. Mothercare eased 12p at 210p, Marks & Spencer 9p at 294 1/4p and Harvey Nichols 7p at 147 1/2p.

Housebuilder Wilson Connolly rose 5 1/2p at 146 1/2p following Friday's sharp fall on a profits warning and board shake-up. The strategic review ordered by chairman Allan Leighton could lead to a bid, say dealers.

Avon Rubber bounced 14 1/2p higher at 135p on its bid approach. One report is that venture capitalists have been kicking the tyres at Avon, which makes engine hosings for Ford and General Motors.

Advertising group WPP, 13p off at 615p, extended its bid for rival Tempus, 2 1/2p easier at 525p, until 5 November pending its appeal against a Takeover Panel ruling last week that it stand by the 555p-a-share offer.