Ladbrokes Reports 15% Fall In Q3 Revenue Results

The global economic downturn has continued to impact Ladbrokes’ trading results with the London-based online gaming company reporting a 15% drop in revenue in Q3 compared to the same period last year. The company has now announced they will be undertaking a series of cost cutting exercises designed to increase profits for the year end.
Ladbrokes Chief Executive, Chris Bell,in an address to shareholders explained: “Against a weak economic environment and a recent period of lower gross win margins, we have already announced decisive cost actions which, together with further savings recently identified, will leave Ladbrokes well positioned when the upturn comes.  Whilst we have decided not to pay a final dividend in 2009, we intend to re-instate dividend payments at the interim results next year.”
The revenue results for Q3 made unsettling news all round with operating profit down an incredible 58% from £52.8 million in 2008 to £22.4 million in the current period. The telephone betting business suffered a 73% drop in revenue while High Roller betting fell by £2.8 million.
Ladbrokes’ e-gaming businesses fared no better with revenue down 13% overall, including a 31% fall in its online sports book and a drop of 21% for its online poker venture. Despite its online casino and bingo departments posting a modest gain these were too small to improve the overall results for the company.
Ladbrokes have now formulated a cost cutting plan which includes the Board of Directors having their salaries frozen until January 2011 and reducing staff costs particularly in the call handling areas. The company will also be seeking to reduce capital expenditure in 2010 while raising equity capital. However, a Ladbrokes announcement early October that it would be seeking to raise equity by releasing new shares onto the market had the effect of sending its shares down from $171.30 to their present value of $135.60.