William Hill rules out Paddy Power merger

“I don’t see any logic in it,” said Topping during a conference call with reporters. “That was speculation on the part of an analyst but there’s nothing in that.”

Today's full-year pre-tax profits failed to meet expectations after a disappointing performance from the bookmaker’s internet business.

Pre-tax profits fell to £209.2m in the year ended 1 January compared with £235.4m last year and forecasts of between £212m and £222m, though profits before interest and exceptionals came in at £286.7m, slightly better than the £285m figure the group had given in January. Revenue for the year rose to £940.4m from £894.2m previously.

The retail channel’s gross win grew by 9% to £802.6m and pre-exceptional profit increased by 2% to £229.8m, but this was offset by a ‘disappointing' performance by the group's internet unit with gross win falling by £10.7m to £119.8m and operating profit down by £10.6m to £50.9m.

Chairman Charles Scott said he expects 2008 to be a transitional year for the internet business as the group makes the necessary investments to “lay the foundations for future growth.”

“The most significant of these is the replacement of our Interactive sportsbook technology system with the new, more flexible ORBIS platform. We will also be focusing on exploiting the opportunities available to our online gaming business,” he added.

In the seven weeks to 19 February 2008, the group’s gross win has increased by 4%. “For the year as a whole, we remain confident of further growth in the retail business. The group remains focused on cost and believes that like for like cost growth can continue to be contained within the historic range of 4-6%,” said the group.

“However, the business will need to absorb incremental costs associated with the new Turf TV contract and the full year impact of extended winter opening hours,” it added.

The final dividend is up 7% to 15.5p per share, in line with the group's progressive dividend policy.