UPDATE 2-Ladbrokes profits hit by Cheltenham, shares down

* Gross win flat in four months to end April

* Says March highly profitable for punters

* Shares down 7 percent

* Sees more normal trends in May

* Confident on FY performance

(Adds further detail, analyst, CEO comment, shares)

By Matt Scuffham

LONDON, May 15 (Reuters) - British bookmaker Ladbrokes (LAD.L) said on Friday gross profit fell by 34 percent in the four months to the end of April after a run of punter-friendly results in March, particularly at the Cheltenham Festival.

Shares in the group, which have outperformed the wider leisure sector Q.FTASX5750 by 10 percent since the start of 2009, were down 7 percent to 208.25 pence at 1005 GMT.

Ladbrokes, which has 2,100 betting shops in Britain, said March proved to be highly profitable for many of its customers. Favourite Kauto Star's victory in the Cheltenham Gold Cup was one of a number of results falling in favour of gamblers.

The company said gross win -- total bets minus payouts -- over the four month period was flat, but had increased by 5 percent since March benefiting from rank outsider Mon Mome's victory in the Grand National.

Ladbrokes said the rate of decline in gross profit in the first four months was not representative of its expectations for the year and had already given way to more normal trends in May.

Chief Executive Chris Bell reiterated the company's confidence for the full year.

"While it is difficult to predict future staking levels in the current economic climate, the general resilience of our business and strong cost control gives us confidence in the outturn for the full year," he said.

The consensus forecast for full year underlying pretax profit stands at 167 million pounds ($252.6 million), according to a Reuters Estimates poll of 15 analysts.

In the UK, total gross win declined by 4 percent. Over-the-counter gross win fell by 7 percent or by 11 percent taking into account free bets offered to customers. The gross win margin fell to 17.5 percent from 17.7 during the period.