Ladbrokes 2014 profits hit by declining retail performance

Ladbrokes Plc disclosed its preliminary results for its 2014 performance, as forecasted by numerous business sources the operator revealed that pre-tax profits were down 13.5% to £98 million (FY 2013 : £113.3 million).

2014 group revenues had increased to £1.15 billion, up 3.8% on 2013 (£1.1 billion) as Ladbrokes saw increased wagering on its football betting markets during Q1 2014 and during the World Cup 2014.

Other highlights included a 141% profit increase in ‘High-Roller’ performance to £14.1 million (2013: £5.9 million), which contributed strongly to company performance during H1 2014.

Retail Performance

A further breakdown of performance by product channel revealed that Ladbrokes had been impacted by declining retail performance which generated profits of £119.3 million down 11% on 2013 (£133.9 million).

The operator stated that its UK retail division had been hit by £8 million in Boxing Day losses due to negative football results.

Ladbrokes had seen increased profits from it retail machines generating £18.3 million.

The operator had also put into place retail cost saving measures, which would come into play 2015. Ladbrokes management confirmed that it would close an additional 60 betting shops in 2015.

Digital Performance

The firm’s concentrated focus on improving digital gaming channels, has begun to pay dividends as Ladbrokes recorded profit growth throughout its digital product inventory. Improved sports betting and gaming channel performance saw Ladbrokes record a 71% profit growth of £14 million (2013: £8.2 million)

A new mobile betting product combined with improved sports betting retention had seen wagering increases of 32%, as Ladbrokes sportsbook recorded sports betting net gaming revenues (NGR) of £14.7 million.

The operator was able to support its digital sportsbook performance, with improved igaming wagering which returned to growth during H2 2014, recording Q4 NGR of £1.9 million.

CEO Statement

Outgoing CEO Richard Glynn commented on 2014 Performance

Ladbrokes exited 2014 with pleasing operational metrics and is in good shape to compete even more effectively with a clear view on what more needs to be done.”

We delivered against all our operational targets, enjoyed a successful World Cup and saw clear growth in key areas of the business. The changes put in place have made us competitive and our customers are responding.

“Strong operational delivery delivered a second half of growth as envisaged but the £8m hit on Boxing Day did take some of the shine off our performance.

“Whilst recognising there are regulatory headwinds, Ladbrokes is confident in its plans for 2015.”

Ladbrokes 2014 – Performance Overview