Ladbrokes H1 Profits Plunge 48% To £67.3mAugust 9, 2013 12:49 pm
Shares in Ladbrokes shed 5% of their value today, after the betting company reported its H1 pre-tax profits had nearly halved to £67.3m from £123.7m during the same period last year. Prior to the results being released, gambling analysts had predicted pre-tax profits would be around £74 million.
Helping to account for the worrying H1 figure was the fact there have been no major soccer tournaments so far this year in the UK, as well as a mini-heatwave which hit the country during July. Last month, for instance, Britain’s second largest bookmaker saw a 15% reduction in customers visiting its betting shops, and a 9.2% fall in earnings from slot machines as July’s heat wave led many customers to shun Ladbrokes bookies in favour of outdoor pursuits.
Commenting on the impact the figures would have on future earnings, a Ladbrokes statement said: “Although recent weakness appears to have been influenced by one off factors, the July weather has exacerbated the volatility we were already experiencing, making underlying trends difficult to identify..it is unlikely that lost machine revenue will be recovered during the rest of the year.”
Unlike its larger rival William Hill, Ladbrokes has so far been less successful in taking advantage of the expanding online gambling market or exploiting overseas opportunities, thus making it more dependent on revenue from its 2,300 betting shops located on the UK’s high streets. Consequently, H1 saw operating profits from its digital division fall 28% to £10.8 million. Nevertheless, Ladbrokes’ has recently tried to address this concern by moving across to a new system under a deal struck with software provider PlayTech, which is expected to be completed by early 2014.
“Once fully implemented, it [the deal] will accelerate revenue growth in 2014 and beyond,” explained Ladbrokes chief executive Richard Glynn. Striking an optimistic note going forward, Glynn, then added. “Retail continues to be an integral part of the betting experience, providing sustainable and dependable revenues. We plan to carry on expanding our estate, evolving our offer and improving our trading capabilities to provide compelling value for our customers and take advantage of opportunities for growth.”