'Gods back Ladbrokes' as profits rise in UK and Ireland
Published 05/08/2016 | 02:30
"The sporting gods" have been on the side of Ladbrokes during the first half of the year, according to chief executive Jim Mullen, with the UK gambling group notching up a 34pc jump in operating profits during the first half of the year.
And profits at its Irish retail network jumped 76pc to £4.4m (€5.1m) in the first half of the year, with the return to profitability assisted by the exit of the group's business here from Examinership.
Ladbrokes' Irish arm exited Examinership last year, having taken action to stem losses at its business here.
It also slashed the number of stores it operates in Ireland from 192 to 142.
The group said that while it's the amount of stakes laid at its shops here fell 7.5pc to £218.1m (€257m) during the first half of the year due to the smaller estate it now operates in Ireland, like-for-like staking rose 9.7pc, while net revenue rose 2pc.
Net revenue was 3.6pc lower at £32.4m (€38.1m) on a reported basis in Ireland during the first half.
Ladbrokes also operates 77 outlets in Northern Ireland, which are included in the figures.
On a group basis, Ladbrokes said that its total revenue rose 13.1pc to £661.8m in the first half of the year, with its operating profit jumping 34.4p to £52.3m.
Ladbrokes had struggled to adopt an effective digital strategy for its business.
But Mr Mullen said customers are "responding positively" to the group's new strategy despite some sporting results that have gone in the bookies' favour.
"History would strongly dictate that such a run of results in our favour would see customer staking suffer, but encouragingly these numbers firmly buck that trend and combine strong staking and a good margin," he said.
Ladbrokes said that it paid out £3m to punters who backed long-shots Leicester City, the team that unexpectedly emerged as winners of the Premier League in the UK.
The company also did well from the European Championship.
"Despite Wales's good showing, the early exit of the other Home Nations and Republic of Ireland meant that while significant liabilities were avoided we ran the risk of customer appetite declining. However, this did not materialise," it noted.
Ladbrokes is in the process of cementing a £2.2bn merger with Gala Coral, a move that has already received provisional competition clearance.
"With the merger on the horizon we recognise there is a lot of hard work still to come, but this is an exciting time for Ladbrokes," said Mr Mullen.
The competition watchdog has said that Ladbrokes and Gala Corla must sell between 350 and 400 outlets in order for the merger to receive approval.
There's been increasing consolidation within the sector.
Earlier this year, Paddy Power and Betfair completed their huge merger, creating one of the world's biggest online gambling firms.
And last week, William Hill - currently the UK's biggest high street bookmaker - said it had been approached by a consortium comprised of Rank Group and 888 about a possible takeover.