Interactive
UK – Profits down by 57 per cent at Ladbrokes
By Phil - 26 October 2015
Despite third-quarter profits falling by 57 per cent, British bookmaker Ladbrokes is confident of turning things around.
Profits were hit by the introduction of a new online gambling tax, higher taxation on gaming machines, and the lack of a football World Cup, which boosted last year’s profits.
Earnings before interest and taxes fell in the three months to the end of September by 56.7 per cent to £14.3m compared with the same period last year.
There was an improvement in Over the Counter betting driven by football and racing. It was up 1.6 per cent with football providing a huge boost up 17.5 per cent compared to the start of last season.
Jim Mullen, Chief Executive, said: “These numbers reflect the first 68 days of activity since we announced our organic plan to aggressively invest and grow our recreational and multi-channel customer base particularly across UK Retail, Ladbrokes.com and Ladbrokes Australia.
“It is early in our journey, but today’s results reflect positive initial progress and customer traction with continued increases in staking and actives across Digital and improved staking trends in UK Retail driven by football and racing. Operating profit as expected is down reflecting continued headwinds from higher taxation as well as our increased marketing spend to build our customer base.
“With sportsbetting at our core we see customers responding well to our products, our value and to our recently launched multi-channel offer. All these initiatives are part of the long term plan for Ladbrokes with our targets based around delivery on hard financials for 2017.
“The focus now is on building on this start. Our people are responding to this challenge and we are committed to taking whatever steps necessary to keep this focus. The proposed merger with Coral is on track and, after raising £1.35bnbank debt to finance the merged group, we will shortly be issuing the shareholder circular. The CMA work is progressing but there is no material news that we can share on this today.”
As it looks to boost its UK Retail division, Ladbrokes has launched its multi-channel; One Ladbrokes, following successful regional trials.
Mr. Mullen said: “We are focused on growing digital actives through the combination of digital and OTC oriented technology products, such as our bet slip tracker app, the Grid loyalty card and targeted retail staff incentivisation and training. We have already recorded over 320,000 checks on Bet Slip Tracker and generated new digital Sportsbook and Gaming actives of over 20,000 which we assess are worth more than digital accounts generated through other channels, achieved at significantly lower cost of acquisition. On SSBTs, we rolled out a further 1,350 SSBTs across the UK estate in Q3 and will complete our deployment plans during Q4 giving us an overall SSBT estate of over 6,500.”
In Ladbrokes.com, it has launched a new desktop product on the Mobenga platform, launched cash out options across all sportsbetting platforms and implemented the next level of IMS creating a competitive single wallet offer for customers.
“We have increased the quality of content available to customers on our key digital products including live scoreboards and have increased the ease of access to live streamed sporting events. In addition, we are working on the design and development of the technology powering our multi-channel offering including the recently launched bet slip tracker app. As planned, we increased our marketing intensity to over 30 per cent of net revenue, in line with our strategic plan with a focus on pay per click and affiliate channels,” Mr. Mullen explained.
