Ladbrokes to act quickly on Irish business as group also disappoints
The decision by Ladbrokes to seek examinership for its business in Ireland "demonstrates the seriousness of our intent", chief executive Jim Mullen said yesterday.
The UK betting group released first quarter trading figures yesterday that showed its revenue in Ireland declined 1pc in the period.
On Tuesday, Ladbrokes said that an interim examiner had been appointed to its Irish business after it notched up a €5m loss last year and continued to struggle.
It's believed that Ladbrokes will close about 60 of its 196 stores in the Republic, and make about 250 of its 840 staff here redundant. It's hoping to achieve most of the layoffs through voluntary redundancies.
"I believe strongly in Ladbrokes," said Mr Mullen yesterday. "We have laid solid operational foundations but there is still a lot to be done. The decision to seek examinership in Ireland demonstrates the seriousness of our intent and the speed with which we will execute."
The examinership process can last up to 100 days. Most of the stores the group intends to close in Ireland are either tied into onerous leases or are in locations that don't have many passers-by.
"The action taken today by the directors of the Irish companies is to safeguard the Irish business which in its current state is not sustainable and cannot be supported by the Ladbrokes board without radical change, having lost its competitive edge," said Mr Mullen this week.
Shares in Ladbrokes had fallen 2.7pc by midday yesterday, and have declined about a third over the past year.
Ladbrokes said that trading in the first quarter of the year was hit by unfavourable sporting results, as well as tax increases in the UK.
Group net revenue rose 3.3pc in the period, while earnings before interest and tax fell 22pc to £14.3m (€20m).
"Results have favoured customers and profits are materially down," said Mr Mullen. "These results demonstrate the challenges we continue to face. We need to change the way we run the business, build scale, primarily in digital and respond faster to the customer and changes in the market place."
In the UK, the amount staked by punters over the counter at Ladbrokes' betting shops declined 4.8pc in the first quarter.
The fall was in line with market expectations, however.
At its online division, the amounts staked on its sportsbooks rose almost 29pc, but total online sportsbook net revenue fell 31.5pc. Davy Stockbrokers had expected an 18.1pc rise.
But Davy said that Ladbrokes' performance in Australia was impressive.
The stockbroker also noted what it said was a strong performance by fixed-odds betting machines in the group's outlets in the UK.