Ladbrokes’ profit fell from £68m to £38m in 2014 despite digital profit surging by 70 per cent over the year to £14m. The poor performance overall will see 60 UK shops close.
The impending rise in gaming machine taxes meant that the closures of 60 shops would be inevitable and while the company is seeing revenues increase on the betting machines, it is focusing on digital and international growth for 2015.
Richard Glynn, Chief Executive, commented: “The increase in Machine Gaming Duty from 1 March 2015 and the anticipated impact of the new UK regulations in 2015 means that further shop closures will be inevitable. We will again try to limit the impact of these closures on our shop teams.”
Digital net revenues totalled £215.1m for the 12 months ended December 31, up 23 per cent year-on-year. Boosts came from mobile sportsbook growth, which grew 110 per cent during the period. Ladbrokes.com sportsbook net revenue increased 21 per cent to £84.8m, primarily due to the FIFA World Cup. This, however, was offset by a 6.7 per cent loss of online gaming net revenue to £80.5m for the year.
Mr. Glynn, Chief Executive, said: “Strong operational delivery delivered a second half of growth as envisaged but the £8m hit on Boxing Day did take some of the shine off our performance. However, this is the business we are in and does not overshadow the positive customer reaction. Ladbrokes exited 2014 with pleasing operational metrics and is in good shape to compete even more effectively with a clear view on what more needs to be done.
“2015 will see new management but the focus on satisfying customer demands, improving the resilience of our retail estate, growing internationally and further improving our Digital offer remains. Whilst recognising there are regulatory headwinds, Ladbrokes is confident in its plans for 2015. 2014 was a pivotal year for our Digital business during which we completed the key operational steps envisaged in the Playtech agreement of May 2013. In December 2013, we launched mobile sports betting onto the Mobenga platform and completed the launch of Playtech Casino products followed by the transfer of all our Digital products on the Playtech IMS system by the end of April 2014. The integration of our products, prices and data into IMS allowed our marketing and data teams in Ladbrokes Israel to begin in H2 2014 to market effectively to our Digital customers. More importantly, it gives our customers the benefits associated with single wallet capability across all our Digital products.”
Ladbrokes enhanced its product offering on the high street and and made progress in growing our football business.
“This is central to delivering better margins in the medium-term as well as off-setting the decline in traditional over the counter horse race and greyhound betting which is less relevant to younger customers,” Mr Glynn explained. “We deployed more Self Service Betting Terminals (SSBTs) across the estate bringing the total to 1,730. SSBTs are popular with football customers allowing them to build customised coupons and bet across a range of other sports and events. Around 80 per cent of SSBT staking is on football, supporting this important area of growth. SSBT staking grew throughout 2014 with weekly staking levels at the end of the year above the peaks we saw during the World Cup. We also improved our coupon offer for traditional football customers and increased in-store and in-window visibility of the latest football offers, pricing and results. As a result, combined with a strong World Cup, OTC football staking increased by 29.4 per cent and gross win by 9.5 per cent. Building on the strong customer response, we will deploy more than 2,000 additional SSBTs in 2015 across the estate with at least one SSBT per shop.”