Revenues fall by 10% at Ladbrokes’s Irish operations
Bookmaker says Irish market “remains challenging” as amounts staked fall by 7.5%
Ladbrokes’s Irish business was impacted by unfavourable football results in the first half of the year, and this was compounded by a high percentage of winning favourites at major racing festivals.
Despite a boost from the World Cup, net revenues fell by 10.6 per cent to £37 million (€46.4m) at Ladbrokes’s Irish operations in the first six months of the year, as the bookmaker reported a 7.5 per cent decline in amounts staked down to £315.9 million.
Ladbrokes operates 213 shops in the south, down from 216 last December, and 79 in Northern Ireland.
Operating profit fell by 60.3 per cent to £2.5 million, as the UK group said that the competitive environment “remains challenging” in the south, while in Northern Ireland, “trading reflected UK market conditions with Q1 football results the major factor”.
The company’s gross win margin on its OTC business was 14.0 per cent, 0.9 percentage points behind the first half of 2013. The first half of 2014 (especially the first quarter) was impacted by unfavourable football results, Ladbrokes said, and this was compounded by a high percentage of winning favourites at major racing festivals. Total gross win in Ireland decreased by 12.0 per cent to £37.5 million.
Costs of £30.5 millionin Ireland were down 0.7 per cent, “driven largely by shop scheduling improvements and a reduction in head office and property costs”.
Across the broader group, the bookmaker counted the cost of unfavourable sporting results. The group was also hit by its race to roll out new machines and services in time for the tournament.
Ladbrokes posted profits of £27.7 million for the first six months of the year, a decline of 49.7 per cent on a year earlier. The company said it took bets worth £115.3 million during the tournament, a rise of 22.4 per cent on four years ago. Half-year operating profits from its UK retail estate fell 21 per cent after some difficult trading weeks, particularly for football in January and the higher than average percentage of winning horse favourites.
It said: “The major flat festivals in the period at Epsom and Ascot were particularly customer friendly with Ascot seeing 14 winning favourites in 30 races. We recorded losses in both festivals.”
Horse racing struggles to attract younger betting customers and Ladbrokes said staking declined in the latter part of the first half, particularly during the World Cup. It achieved success in its focus on football, with staking in the 2013/14 football season growing by 25 per cent on the previous year.
Chief executive Richard Glynn said the group achieved all its planned operational improvements in time for the World Cup. They included new gaming machines and its service allowing punters to bet on sport and play casino games from one account. He added: “Our offer performed well, delivering a great betting experience for our customers and a good result for the business in a highly competitive market.”
Mr Glynn said the company made substantial progress but there was much to play for: “We now have the products, the platforms, the people and the brand in place to deliver. Ladbrokes today is a far stronger company and well positioned for growth.”
Shares rose 4 per cent following the half-year results.
(Additional reporting Press Association)