Ladbrokes profit up on retail growth, online revival
4/19/2012 : BETTER NEWS FROM LADBROKES
Ladbrokes profit up on retail growth, online revival
British land and online gambling giant Ladbrokes plc announced its interim management statement for the 3 months ended 31 March 2012 on Thursday, noting that Q1 operating profit is up 3.9 percent to GBP 50.4 million; UK retail sales are up 9 percent; and revenues from "digital" operations are rising.
The company, which pulled out of talks to buy online gambling businesses 888 and Sportingbet during the last year, said net revenue at its digital division grew 5.9 percent in the quarter, boosted by good growth in online sports betting.
However, profit at the digital unit fell largely due to a GBP 50 million two-year investment programme the company has embarked on to improve the performance of its internet business.
"We are continuing to deliver on our trading and digital milestones with further developments expected in the coming months," chief executive Richard Glynn said. "We are confident of delivering digital profit growth during the second half of the year as the benefits from our investments converge."
He added that the company's net debt position has been further reduced by GBP 55.6 million from GBP 453.9 million at 31 December 2011 to GBP 398.3 million at 31 March 2012.
Earlier this year Ladbrokes reported a less than expected 0.4 percent fall in 2011 operating profit.
On the digital front, Ladbrokes reported:
• Momentum in customer acquisition with continuing double digit growth in digital sign ups and actives
• 22.4 percent growth in sportsbook net revenue driven by strong increase in stakes and increase in margin
• Mobile now 20 percent of sportsbook amounts staked (Q4 2011: 15 percent) A new mobile platform will launch in Q2.
• Ladbrokes Bet in Play now offering bets on more football matches than any other provider. Bet in Play (excluding horseracing and greyhounds) is now 57 percent of sportsbook amounts staked (FY 2011: 49 percent).
• New website in live customer testing with full live launch set for May 2012
• New contract with Openbet enhances flexibility of development whilst further expanding games content. Casino net revenue fell in the period by 4.8 percent, a movement materially driven by losses to a number of high value customers in March. Active players in casino were up 76 percent.
. Net revenue in poker was down 26.8 percent in the quarter with bingo marginally lower, 2.6 percent down.
“We have invested considerably more in digital marketing and customer acquisition remains strong," Glynn reported.
"We are starting to see this drive growth in the topline, particularly in the key focus area of UK sportsbook which was up 22 percent. Our football Bet In Play offer is now leading the market with up to 800 matches per week.
“We are continuing to deliver on our trading and digital milestones with further developments expected in the coming months. As stated in February, we are confident of delivering Digital profit growth during the second half of the year as the benefits from our investments converge.
"We will shortly begin trading using the new fieldbook, and are introducing further algorithmic pricing and trading tools. The new sportsbook is in customer testing and will be fully live in Q2."
Shares in Ladbrokes, which have risen 20 percent in the last three months, closed at 162.8 pence on Wednesday, valuing the company at around GBP 1.5 billion.
