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UK – Ladbrokes up 34.4 per cent on half year results

By - 5 August 2016

Ladbrokes has delivered a half year operating profit of £52.3m, up 34.4 per cent year on year, well ahead of management’s expectations and driven by beneficial sporting results and improved customer metrics across the different divisions.

The Euro 2016 football tournament helped drive revenue with the most profitable results being England’s draws with Russia and Slovakia and Portugal’s victory over France to win the trophy.

Jim Mullen, Chief Executive, commented: “These strong numbers show customers are responding positively to the new strategy at a time when the sporting gods have generally been on our side and we’ve enjoyed some helpful bookmaker friendly results. This combination has helped boost profits in the first half of the year. “

“History would strongly dictate that such a run of results in our favour would see customer staking suffer, but encouragingly these numbers firmly buck that trend and combine strong staking and a good margin. However, 130 years of experience in sports betting has shown us that we will endure a run of customer friendly results and margins will normalise. Despite this assumption on results and our intention to continue investing in marketing, we have slightly increased our full year expectations.

In the UK, Ladbrokes has grown its recreational customer base and developed a multi-channel product whilst increasing footfall in retail; in Australia it has concentrated on growing its market share.

Mr. Mullen said: “Like for like staking in the 2015-16 English Premier League season grew 14.7 per cent year on year in UK Retail and 11.7 per cent in Ladbrokes.com and as at 30 June, football as a percentage of staking had grown by four percentage points to 19 per cent of Retail OTC staking.

“The half has been notable for the ongoing unpredictability of the English Premier League where 5000/1 shots Leicester City, who won the league and saw us pay out £3m to far-sighted customers, were the perfect example of the league’s unpredictability. Week in week out customers’ accumulators and coupons were victims of surprise results. This trend continued as the European Championship got underway. Despite Wales’s good showing, the early exit of the other Home Nations and Republic of Ireland meant that while significant liabilities were avoided we ran the risk of customer appetite declining. However, this did not materialise. The final, ending at 0-0 after 90 minutes, with a winning goal by an unfancied substitute in extra-time was a fitting snapshot of the tournament and the season. While results were obviously welcome it was pleasing that against the European Championship in 2012, we managed to deliver 43.5 per cent staking growth for UK Retail and 103 per cent staking growth and 65.1 per cent actives growth for Ladbrokes.com.”

In digital, Sportsbook delivered a 10th consecutive quarter of year on year growth with staking up 19.5 per cent (30.4 per cent adjusted for significant HVC activity in H1 2015) and actives up 38.4 per cent.

Mr. Mullen added: “Encouragingly we have delivered a good performance across all the key customer metrics outlined in last year’s strategic plan and that gives us confidence that we are well placed to deliver against our stated 2017 targets. We have grown recreational customers, increased our football business, attracted more multi-channel customers and grown strongly in Australia. However, we are taking nothing for granted. “We will continue to compete hard on pricing, product and customer services and maintain a relentless focus on meeting and exceeding customer expectations. With the merger on the horizon we recognise there is a lot of hard work still to come, but this is an exciting time for Ladbrokes and we approach the opportunities ahead with a strong sense of confidence.”

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