02/16/2012 : Revenues slightly up but profits down
The major UK online and land gambling group Ladbrokes has posted its Q3-2011 results, showcasing a small increase in revenues, but a correspondingly small decline in operating profit.
Highlights of the report, which details the company's performance for the three months to September 30, include:
* Group net revenue up 2.5 percent.
* Group operating profit of GBP 49.7 million was 2.7 percent lower year-on-year (up 8.5 percent if the impact of the World Cup betting in 2010 – GBP 5.3 million – is excluded.)
* Growth of 2.0 percent in UK Retail net revenue
* Growth of 6.4 percent in sportsbook amounts staked and increase in sign-ups of 86 percent since the start of renewed marketing in August.
* Significant expansion of Bet in Play with increase in football events from 200 per week in August to 500 in October and expected increase to an average of 700 from November.
* Agreements with three new suppliers of [online] casino slots with 31 new games added since August
* Net debt has been reduced by GBP 38.1 million
Ladbrokes CEO Richard Glynn commented:
“UK Retail net revenue has grown by 2 percent driven by particularly strong growth in machines, with continued stability in trend for OTC staking. We have seen good growth in Sportsbook sign ups and actives, particularly following the start of our renewed marketing in August. We have significantly increased our Bet in Play football offer and broadened our range of [online]casino games, with further expansion in these areas to come."
Looking forward, Glynn said that in November 2012 the company would start live testing its new online sportsbook, due for launch in Q1, enabling Ladbrokes to promote its expanding range of betting and gaming opportunities more effectively.
"In Mobile we will launch up to 40 new casino style slots over the next few months and in October [we] will offer live streaming of 100 percent of UK horseracing, Glynn said.
"The economic climate in the UK remains challenging and whilst we expect this to continue we are confident in our strategy and remain in line with the Board’s expectations for 2011. We are making good progress on the delivery of our operational and technology milestones and look forward to sharing more detail on these at the full year.”
The digital business progress of the group was detailed as:
* Net revenue decline of 3.5 percent driven down by poker and Q4 sportsbook margin masked an underlying improvement in customer acquisition and conversion
* Q4 sportsbook sign ups up 77 percent, actives up 24 percent and amounts staked up 22 percent
* Strong mobile growth with net revenue up 174 percent to GBP 15.6 million
* 33 percent of sportsbook customers placing a mobile bet in H2, up from 12 percent in FY 2010
* Significant expansion of Bet in Play with another 20,000 events to come in 2012
* Beta testing of new website underway; full launch in coming weeks
Glynn said that the company was making progress in reinvigorating Ladbrokes, costs had been cut and plans for growth laid.
"In Digital, we are continuing to invest in technology to improve our trading capabilities, expand our range of products and improve our delivery to the customer. Mobile is delivering impressive growth with further product expansion and innovation to come throughout the year," he noted.
"We have begun investing consistently in brand and Digital marketing and we will continue this investment process in 2012 having begun to see tangible benefits in 2011. We have a number of important milestones in the next few months."
In related news, Ladbrokes has also announced changes to its board of directors with the appointment of two non-executive directors to the plc board. Christine Hodgson, chairman of Capgemini UK and Richard Moross, founder and chief executive of Moo.com will join the Board on May 1st 2012.
Hodgson joins Ladbrokes following a 15 year career at Capgemini, the global consultancy firm specialising in technology, where she began as CFO and is currently chairman of the UK board.
Richard Moross is founder and chief executive of Moo.com – a digital success story. The business has become a world leader in online printing, winning a number of awards, and is ranked among the top 10 UK start-up companies by The Guardian. He is widely regarded as a leading expert on ecommerce and is regularly invited to take part in discussions with Government on emerging technology issues.
Departing the board is Pippa Wicks, who has informed the directors that, having served almost eight years as a director, she does not wish to seek re-election for a further term and will retire at the conclusion of the company’s AGM in April.
Ladbrokes plc chairman Peter Erskine said that the new directors bring with them extensive experience in digital platforms and information technology and their complementary range of skills will be of significant benefit to Ladbrokes.