Ladbrokes' Irish revenue slumps on restructuring impact
Ladbrokes' revenues in Ireland slumped nearly 17pc during the third quarter of the year as it closed about 60 of its 196 shops here as part of a restructuring plan.
But releasing a third-quarter statement yesterday, Ladbrokes said activity in Ireland during August and September, on a like-for-like basis, showed a broadly stable gross win, boosted by higher stakes that were spurred by promotions.
"This performance is consisted with our objective of creating a sustainable business through the examinership process where the reduction in workforce was achieved almost entirely through a voluntary redundancy programme," the company noted.
Ladbrokes put its Irish arm into examinership in April, as losses continued to mount. The High Court approved a rescue plan in July, which involved Ladbrokes closing 60 of its stores and cutting 250 of its 840 jobs here.
The company's unit in Ireland had incurred a €5m loss during its previous financial year.
The UK parent also agreed to invest €12.8m in the Irish division as part of the restructuring, including €3.8m to pay off debts, €5m in working capital and €4m for capital expenditure.
Its performance in the Irish retail market was in stark contrast to that of indigenous rival Paddy Power, which has managed to maintain profitability at its chain here despite a migration to digital platforms and the tough economic environment. Paddy Power's retail business in Ireland made a €15.6m operating profit last year, compared to €14m in 2013.
Ladbrokes is planning to merge with Coral, while Paddy Power is merging with Betfair.
Ladbrokes said that it had experienced improved over the counter betting trends at its UK retail division during the three months to the end of September, helped by increased marketing to boost footfall.
Its group net revenue dipped 0.7pc, while digital revenue was 6.4pc higher. Earnings before interest and tax amounted to £14.3m in the period, declining on the back of increased gaming duty, point of consumption tax and lower comparative margins.
Chief executive Jim Mullen said that increased marketing costs had also impacted its operating profit.
"The proposed merger with Coral is on track," he said. The UK's Competition and Markets Commission is currently examining the proposed merger.