Ladbrokes was among the worst performers of the FTSE 250 after Credit Suisse highlighted the bookmakers’ expensive battle to tear customers away from online rivals.

Credit Suisse also pointed out that it would need to conserve cash since it needed to refinance £410 million of debt by 2011.

Ladbrokes is using cash from its slow-growth betting shops to finance building up its European online betting operations and its stores in Spain and Italy. Fitch, the ratings agency, said earlier this month when it cut Ladbrokes’ debt rating to junk level, that is is being outcompeted by the pure online gaming companies such as PartyGaming, up 4¼p to 247p, and 888 Holdings, down 1¾p at 102¼p. Ladbrokes’ high marketing spend, mainly for an in-store loyalty programme, has yet to show results, warned Fitch. At the same time its start-up operations in Spain and Italy are gobbling costs.

Ladbrokes shares, down 7¼p at 187p, have dropped by a fifth since a weak trading update in May. William Hill, which recently pulled out of Spain, lost 3¾p to 194¾p.

Credit Suisse maintained neutral ratings on both William Hill and Ladbrokes, but said it preferred William Hill of the two and trimmed its Ladbrokes price target.

The FTSE 100 closed down 11.56 to 4,241.01 on weak volume after a depressed opening on Wall Street encouraged the cautious mood.

BAE Systems edged down 2¼p to 342¾p as traders were left bemused by a Goldman Sachs “sell” note which said investors should take advantage of a contract win next week to sell down their holdings. It believes the US and UK defence budgets have peaked. However, it said the US is to select a supplier for up to 5,300 mine resistant vehicles for use in Afghanistan next week. BAE is well positioned among the four bidders since it has won similar programmes in the past. Winning that contract would raise its chances of securing a bigger deal, worth $1 billion a year for a decade, to replace the US Army’s Humvees with its prototype “joint light tactical vehicle”.

ITV lost another ¼p to 33¾p, bringing its total fall for the week to 7 per cent amid mounting fears it will have to do a rights issue to bring down its debt burden. This weekit swapped some of its bonds which would have matured in 2011 for 2014 bonds, but it was forced to raise the coupon on the new bonds from 9 per cent to 10 per cent before investors would buy them. ITV has £1 billion bonds outstanding in total. Scottish broadcaster STV said yesterday that the ITV network’s sales fell 19 per cent in the second quarter.

Peter Hambro Mining gained 37p to 637p on analyst upgrades. The miner had benefited from vague bid talk and on Thursday raised this year’s gold production targets. Liberum Capital said shares in the company, which has no debt, were under-valued compared with Russian peers and better production could trigger a re-rating.

Micro Focus International lost 7p to 370p as it said a rival bidder for its prey, Borland, had made another approach. Numis said Micro could afford to raise its bid to up to $1.50 a share.

• New York: Wall Street faltered as data showing a jump in savings was taken as a sign that people might not be spending. The Dow Jones industrial average closed down 34.01 at 8,438.39.

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