High-spending telephone punters came to the rescue of Ladbrokes yesterday after results from its betting shop operation failed to meet targets.

Ladbrokes said profits for the four months to October 31 increased by 84 per cent, but this reversed to a 12 per cent decline without business from telephone "high rollers" and before the cost of a recent television advertising campaign.

The company said the below par performance from its retail business partly reflected poor summer weather after lower amounts were staked on horses in July and August because of a high number of cancellations.

Margins on football bets have also taken a hit because of unfavourable results, it added.

Ladbrokes' first attempt at television advertising - costing £4.7 million - features former footballers Ian Wright, Ally McCoist, Lee Dixon and Chris Kamara acting as construction workers on a break in a cafe.

The campaign may have helped trading in November as Ladbrokes reported double-digit growth in the amount of money left by punters at the UK retail business.

The figure was four per cent higher in the four months to the end of October, including a 25 per cent improvement in revenues from gaming machines. The Gambling Act, which came into force on September 1, has enabled Ladbrokes to replace its fixed odds betting terminals with those offering roulette and jackpot games and a maximum payout of £500.

In contrast, over-the-counter (OTC) betting revenues were down five per cent on a year earlier. Ladbrokes said it had seen improved trends in September and October following the commencement of winter evening opening.

Ladbrokes shares fell by 10 per cent yesterday as investors worried about prospects for the betting industry. They closed on 343p, a fall of 361[2044]2p. William Hill shares were also down.

Matthew Gerard, an analyst at Investec Securities, said: "We remain sceptical the Gambling Act will produce the material upgrades some were expecting and think bookmakers are still exposed to consumer weakness."

In August, the group saw half-year operating profits increase by 29 per cent to £195 million, aided by a three-fold rise at its telephone betting arm after revenues from high rollers surged to £95.3 million from £13.3 million.

Operating profits at the UK retail arm fell 11.6 per cent to £100.9 million, reflecting tougher comparisons against the football World Cup in 2006.

One big worry for Ladbrokes at the moment is the prospect of England failing to qualify for Euro 2008, finance director Brian Wallace admitted.

The company would lose "millions" next year if Steve McClaren's men fail to beat Croatia in next week's crunch qualifier.

"If Scotland and England are there the whole interest across the country is enormous," Mr Wallace said.

Elsewhere, Ladbrokes, which has betting shops in Ireland and Belgium, said it had acquired 17 outlets in Italy and these were trading satisfactorily. The group is moving into Italy, Spain and China in order to tap markets where regulations are set to be relaxed.

The overseas expansion is expected to offset tougher conditions in the UK, which is both a maturing market and one with a widespread smoking ban - not a popular development among betting shop customers.