Aladdin holder’s earnings improve

Thursday, June 8, 2000 | 10:57 a.m.

The largest shareholder in the Aladdin hotel-casino posted improved earnings for the year ending April 2, though its debt load ballooned to nearly $200 million as a result of its increasing financial commitment to the Strip resort.

On Tuesday, London Clubs International posted revenues of 144.7 million pounds ($220 million), an increase of less than 1 percent over the previous year. However, net income available to shareholders rose nearly 23 percent to 10.23 million pounds ($15.54 million), or 7 pence per share (10.6 cents). London Clubs attributed its increased earnings to strong growth at its London properties, though it said income would have been higher without an increase in uncleared checks.

However, London Clubs also reported that its net debt was 131 million pounds ($199 million) as of April 2, more than double its debt load one year ago -- the result of increased investments at the Aladdin. London Clubs invested an additional $60 million in the Aladdin earlier this year after a real estate trust led by developer Jack Sommer refused to invest an additional $36 million into the Strip project. As a result, London Clubs now controls 40 percent of the resort's privately held shares.

However, the company is expressing optimism its Las Vegas gamble will pay off.

"We are looking forward to benefiting from the phenomenal levels of growth seen in Las Vegas -- up nearly 30 percent since our original investment," said London Clubs Chairman Alan Goodenough in a statement. Goodenough told British news service AFX News that London Clubs would probably use the Aladdin's cash flows to help refinance its debt load.

The (London) Independent, citing analysts, said the Aladdin could boost London Clubs' revenues by 10 million pounds, or $15.2 million, per year. The Aladdin is set to open Aug. 17.