* To move sportsbook operations to Gibraltar
* H1 pretax profit 131.3 million sterling vs 136.6 million sterling
* Still aims to meet FY market expectations
* Italian retail business for sale
* Shares up 2.5 percent
(Adds CEO, analyst comment)
LONDON, Aug 6 (Reuters) - British bookmaker Ladbrokes reported a decline in first-half pretax profit and cut its dividend on Thursday as it warned trading had worsened since May and economic conditions remained challenging.
Ladbrokes, which has 2,100 betting shops in Britain, reported an underlying pretax profit of 131.3 million pounds ($222.9 million), compared with 136.6 million last year.
On a conference call with reporters, Chief Executive Chris Bell said trading conditions had worsened since May but the company was still aiming to meet full-year expectations.
The consensus for full-year underlying pretax profit currently stands at 180 million pounds, according to a Reuters Estimates poll of 17 analysts.
Rival William Hill warned on full-year profits on Tuesday, saying trading had been hit by a drop in the number of customers at weekends and a run of unfavourable results.
Ladbrokes said it was cutting its dividend by 31 percent to 3.5 pence given the results to date and uncertain outlook.
The company also said it would follow William Hill in transferring its online sportsbook operations to Gibraltar but would keep its telephone betting call centre in Britain.
Bell said the company expected to save in excess of 7 million pounds per annum from the move.
Ladbrokes is looking to sell its Italian retail business and Bell said the company has received expressions of interest.
Analysts at UBS say the book value of the business is about 50 million pounds.
Shares in Ladbrokes, which have lost nearly a third of their value over the past year, were up 2.5 percent to 171.6 pence at 0726 GMT. ($1=.5890 pounds) (Reporting by Matt Scuffham; Editing by Mike Nesbit)