Wembley has increased operating profits by 9.3 per cent to £35.9m, despite being hit by the weakening value of the dollar.

However, shares in the gaming company fell sharply as results were overshadowed by the ongoing investigation of Wembley by a Federal Grand Jury into allegations that 'potentially illegal payments were proposed in relation to the gaming facility at Lincoln Park, Rhode Island.'

In final results for the year ended 31 December 2002, chair, Claes Hultman, said of the investigation: 'There is a significant possibility of claims or charges being brought, which could have material consequences for the group.' However, he added that they would be 'vigorously resisted as the directors remain of the view that the allegations are without foundation.'

Last year, Wembley outlined its strategy to transform itself into a 'focused, track-based gaming business' and has since disposed of all its events services businesses - which included selling the Wembley Complex to Quintain Estates and Developments in August 2002 for £48.6m.

Losses on disposals, however, and a charge for abandoning its 24dogs internet gaming business - its name and website are to be licensed out following a review of its future profitability - were responsible for a fall in pre-tax profits from £33.6m to £26.1m

Following its strategic move, the company now operates in three markets: the UK; Lincoln Park, Rhode Island and Colorado.

Having secured permission from the Lottery Commission in the US in January to install an additional 1,300 video lottery terminals at Lincoln Park, Wembley is commence construction of a £23m new building to house them. It is due for completion late 2004 and will take the number of VLTs at Lincoln Park to 3,000.

The company also hopes to install VLTs at its racetracks in Colorado.

In the UK, Wembley aims to increase its portfolio of greyhound tracks and is close to acquiring an existing track site in Liverpool on which it will construct a new track.

The company is to continue its share buyback programme, which saw it acquire 3m shares last year for £21.7m. Details: www.wembleyplc.com