FTSE in-depth: Gala boss tipped to cut his losses

By Geoff Foster for MailOnline
Updated: 03:34 EDT, 10 March 2011

It's the Cheltenham racing festival next week, when several thousand horse-racing fanatics from Ireland journey across the Irish Sea to make up part of the 210,000 strong crowd.

Foster: On the two-year anniversary of the trough of the financial crisis, the Footsie pulled up lame.

The four-day highlight of the jump-racing calendar will see more than £600m wagered on 27 races and more than 200,000 pints of Guinness consumed by the excited racegoers. All of the major gaming companies will hope that every favourite falls at the first and outsiders win every race.

For Gala Coral, the meeting comes at a time when rumours are rife that Carl Leaver, its new chief executive, could be about to dismount following persistent boardroom rows about the group's future direction.

Former Marks & Spencer director Leaver was appointed chief executive of Europe's biggest gaming company in November, replacing Neil Goulden.

The group completed a lengthy refinancing which saw its private equity owners wiped out, losing £670m, and control passed to the company's debt holders, led by American firm Apollo Management.

Gala, which operates more than 1600 licensed betting shops in the UK, is currently bidding for the Tote, the state-owned bookmaker which was put up for sale last Autumn and was expected to fetch about £200m.

Sources have suggested that a break-up of Gala Coral could occur soon after a decision is made on the bid.

Meanwhile, Leaver is believed to be at constant loggerheads with members of the board.

The prospect of a lucrative week's racing did little for quoted bookmakers. Ladbrokes, which could take as much as £30m if results go its way, eased 0.80p to 135.10p and William Hill 0.10p to 188.60p.

Marking the two-year anniversary of the trough of the financial crisis, the Footsie pulled up lame. It closed 37.46 points lower at 5,937.3 with the situation not helped by several constituent companies trading without entitlement to latest dividend payments.

For example, tobacco giant Bats lost 70.50p to 2436.50p ex the 81p dividend. Wall Street slipped 24 points in early trading.

Insurance giant Prudential stood head and shoulders above the rest of the Footsie with a gain of 35.00p to 749.00p following forecastbeating 2010 figures including a bumper 23.85p a share dividend pay-out.

The newly-merged British Airways and Iberia group, International Airlines, flew 4.00p higher to 232.60p in sympathy with record figures announced by Hong Kong carrier Cathay Pacific.

Broadcasting giant ITV,up 0.95p to 91.00p is to make a return to London's blue-chip share index along with energy services supplier John Wood Group, down 11.50p at 655.00p, as part of the latest FTSE 100 reshuffle.

Fund manager Hargreaves Lansdown will also join ITV on the way up, marking its inaugural appearance in the premier shares league. The shares jumped 21.00p to 635.00p as Citigroup upgraded to buy from hold and raised its target price to 685p from 600p.

Chemicals maker Yule Catto lost 18.70p to 209.00p after warning that high raw material prices are being made worse by the unrest in the Middle East. The majority of its raw materials are in some way oil linked.

Awaiting further takeover developments, satellite TV giant BSkyB eased 1.50p to 827.00p.

Broker Peel Hunt says having put BSkyB in play and then pushing hard for regulatory clearance, News Corporation management appears keen to complete the transaction. An increased offer in the range of 900-950p per share can be justified.

Slightly better-than-expected full-year results lifted Restaurant Group 26.30p to 306.10p. The Frankie & Benny's, Chiquito and Garfunkel's chain reported adjusted pre-tax profits increased by 12% to £56m and net debt fell £20m to £47m.

New units opened in 2010 are trading 'superbly' and current trading - the first nine weeks - is 3% ahead of last year.

Takeover hopes attracted speculators to electrical equipment group Renishaw, 41.00p better at 1819.00p.

Industrial engineer Hill & Smith rose 22.00p to 300.00p following full-year results and £28m acquisition of Paterson Group.

The deal creates a global player in pipe supports and provides it with immediate access to the high-growth nuclear power plant market, in US and emerging markets.

Disappointed with news that a Chinese company is close to making a formal offer worth £756m or 'only' 290p a share, Kalahari Minerals cheapened 2.00p to 299.00p.

The Chinese party is CGNPC-URC, the uranium resources subsidiary of state-owned China Guangdong Nuclear Power Holding.