Thursday, October 13, 2011 : Mediocre numbers from one of Britain's biggest bookies
Ladbrokes, one of Britain's biggest online and land gambling groups, has released its third quarter interim management statement showing:
• Group net revenue up 2.5 percent in the period.
• Group operating profit down 2.7 percent y-o-y at GBP 49.7 million
• Growth of 2 percent in UK retail net revenue
• Machine gross win per terminal week up 19.8 percent to GBP 866 in Q3 (Q3 2010: GBP 723).
• Growth of 6.4 percent in sportsbook amounts staked and an 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.
• Agreements with three new suppliers of casino slots, with 31 new games added since August.
Chief executive officer Richard Glynn says:
“UK retail net revenue was 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 casino games, with further expansion in these areas to come.
"Looking forward we expect operational initiatives, already underway, to drive further momentum. We will begin using new yield management tools on machines and expect this to drive continued strong growth in 2012.
"In November we start live testing of our new online sportsbook which will launch in Q1 next year, enabling us to promote our 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 will offer live streaming of all UK horseracing.
"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."
Breaking the numbers down shows:
* Sportsbook amounts staked grew 6.4 percent year on year. Net revenue fell 6.0 percent as a result of an adverse movement in gross win margin impacted by both unfavourable results in August and a strong football margin in 2010.
* Mobile revenues in Q3 were up 163 percent with 21 percent of digital customers placing at least one bet during the quarter (H1: 18 percent).
* Casino net revenue was up 11.2 percent on last year, which together with a 13.3 percent growth in actives has been driven by strong VIP activity in the period and also reflects the increase in our slots content post commencement of the new agreement with Microgaming.
* Poker net revenue was down 12.5 percent and actives down 14.0 percent against last year, which represents an improvement in the trend seen in H1.
* Bingo net revenue declined by 5.7 percent with actives down 3.9 percent, with net revenue in Games down by 2.7 percent and actives declining by 3.7 percent
Ladbrokes reduced its net debt by GBP 16.5 million from GBP 449.4 million at 30 June 2011 to GBP 432.9 million at 30 September 2011.
In related news, the bookmaker advised that it has has brought in consultants Oliver Wyman to reinvigorate its 2,100 UK betting shops.
Wyman has worked closely in the past with Nick Rust, Ladbrokes betting channels chief, when he was at rival Coral Bookmakers, as well as with customer experience head Stephen Vowles. The consultant specialises in "strategy, operations, risk management, organisational transformation, and leadership development".
A Ladbrokes spokesman denied the appointment was due to any problems at the shops, where profits slipped 2 percent to GBP 75.4 million in the last half year.
"They are working on a specific project, all to do with our retail excellence strategy," the spokesman said, adding that the aim was to "increase our competitiveness in retail".