Casino operator Stanley will spend £ 100 million on revamping and expanding its estate as it revealed a four per cent dip in profits.
The gaming group, which operates three casinos in Birmingham including the China Palace, Midland Wheel and the troubled Star City, said it would use the cash to lodge five licence applications, while it was looking at extending or relocating another nine casinos to increase the size of its floor space by 50 per cent over the next five years.
Turnover during the year increased by a quarter to £2.077 billion, while pretax profits rose 11 per cent to £39.2 million. But once goodwill amortisation was taken into account, profits fell four per cent to £40.1 million.
The Star City Casino it operates in Birmingham contributed to the downturn with a loss of £2.1 million.
The losses narrowed from £2.3 million last year, but Stanley admitted it was expecting further shortfalls this year, and was unlikely to make a profit at the site in the short or medium term.
Profits at the provincial casino estate as a whole improved by two per cent to £18.8 million despite the impact of Star City.
The gaming division overall thrived, helped by a bumper performance of the company's London venues such as Crockfords.
Profits in the division overall increased by 96 per cent to £14.9 million during the year.
Chief executive Bob Wiper said: "Our London casinos have delivered a satisfactory profit for the year, with drop and win margin returning to more typical levels.
"Crockfords has recovered well from the poor results in the previous year, when a number of high-rollers won substantial sums.
"Our other London casinos - The Colony, Palm Beach and The Mint - performed well. The Mayfair casinos made further progress in encouraging players to play in all three and we will continue to promote this flexible and attractive option."
Refurbishment work was now underway at Crockfords, with £4 million earmarked for the project, while work was well advanced finding a new site for The Mint.
But the company's betting division suffered during the year, with "the run of luck being with customers" leading to an overall 24 per cent plunge in profits to £25.9 million. Since the end of the year, the company has sold its 624-strong estate of bookies to William Hill's for £504 million, generating a profit on disposal of £210 million.
Mr Wiper added the group intended "to play an active role" in bidding for licences for the 17 new casinos.
The Government will allow just one large-scale casino to be built as a "prototype", along with 16 smaller outlets.
Stanley said it is discussing with Malaysian conglomerate Genting Berhad, its biggest shareholder, whether to extend the scope of a joint venture to consider all new casino opportunities.
Mr Wiper said: "The locations for these casinos are anticipated to be selected in 2006 and we believe we are well placed to win a number of these licences." Stanley's shares closed at 539p down 1p.