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Gambling: Ladbrokes Revenue Going Down

5/15/10 - One of the UK’s biggest land and online bookies, Ladbrokes, has posted a trading update that shows a sharp 6 percent fall in revenue in the first four months of the year, although operating profit has increased by 3 percent over the period.
The decline has been attributed to fewer bets – down by 11 percent - in  the land retail shops due to the bad weather in Britain earlier this year. Gross win (total bets minus payouts) from gambling machines rose by 1 percent.
The group’s fortunes were undoubtedly helped by an initiative that moved its online division offshore to Gibraltar late in 2009 . With lower tax obligations, the division became more competitive, particularly in sports book and bingo operations, which are credited with a 41 percent year-on-year rise in i-gaming operating profit between January and April 2010 despite a decline of 2 percent in revenues.
Online sports book turnover grew 13 percent and net revenue by 4 percent, driven by a 9 percent growth in in-play betting and a 15 percent in pre-match turnover. Bingo turned in 5 percent net revenue growth, with flat net revenue from games.
Online poker and casino activities did not perform as well. Casino net revenue fell 6 percent due to lower revenues from high staking players and the free bet promotions run during the period.
Online poker net revenue also fell 10 percent from the prior period, a decline attributed to industry-wide liquidity issues in Europe resulting from the overwhelming competitive presence of major sites that also take US action.
A VAT rebate from the UK also helped boost group operating profit. 
Richard Glynn, the recently appointed Chief executive, said: “The economic environment remains challenging and the strength of UK consumer confidence post-election is difficult to gauge, but group profitability year-to-date has been broadly in line with expectations. 
"In recent times the strength of our brand has diminished. In online and offline areas, we feel the need for Ladbrokes to regain its primacy," he added. "We will be looking at every area of the business. We will be leaving no stone unturned."

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