Bland Q3-2012 from Ladbrokes

The UK land and online gambling group Ladbrokes plc released its Q3-2012 interim management statement Thursday, showcasing retail and digital results for the three months ending 30 September 2012.

Net revenue for the group was up 3.9 percent, with operating profit marginally up at GBP 49.2 million (2011: GBP 49 million)

On the land side of the business UK Retail net revenue increased by 5.4 percent, and OTC was ahead 0.6 percent in the period. OTC gross win margin was up at 16.9 percent (Q3 2011: 16 percent).

Management attributed the decline in OTC amounts staked to weather-impacted horse racing cencellations (38 vs. 2); and the distraction of the Olympics.

Machine net revenue for the period was up 11.5 percent. The average gross win per terminal week across the estate was GBP 937, with the year to date average now at GBP 943. The average number of machines per shop is now 3.87.

Operating costs in UK Retail for the full year are expected to be up 6 percent overall. During the period Ladbrokes opened 16 new shops, acquired 12, closed 12, and refurbished 19. Management expects to have opened/acquired around 80 shops over the course of the year.

Digital operations performed rather better; net revenue grew 6.1 percent with 21.8 percent growth in sportsbook net revenue, along with stronger margin and continued growth in active punters.

Online casino and games showed a slight improvement of 1.1 percent; bingo declined 6.1 percent; and poker plunged by 25.7 percent.

Mobile revenues continued to deliver strongly, with 40 percent of all digital sportsbook customers now betting via mobile devices.

Bet in Play operations contributed 66 percent of sportsbook stakes (Q3 2011: 50 percent) with events now expected to exceed Ladbrokes’ plan of 60,000 in 2012.

Telephone net revenue slipped 5.9 percent in the period, although staking was marginally up year-on-year.

High roller action showed a dramatic improvement, generating an operating profit of GBP 6.9 million (Q3 2011: loss of GBP 700,000)

The company’s website development remains on plan, with the first iterations of the new online sportsbook successfully released, and the transfer of active and new customers on track for end Q1 2013.

Richard Glynn, CEO at Ladbrokes, commented:

“Consistent growth of both machine and OTC net revenue, as well as a robust control of costs reinforces the resilience and strong cash generation of our UK Retail business. Despite having fully annualised last year’s launch of the Global Draw terminals, we remain confident that our focus on player and machine yields, as well as an increase in machine density, will generate further growth.

“We are now delivering against a clear programme to complete the rollout of the digital sportsbook and migration of customers by the end of Q1 2013, whereupon we will focus increasingly on enhanced CRM. Enhancements in trading are leading to early signs of an improvement in the quality of turnover, with further developments in pricing and liability management still to come.

“Though the economic outlook remains uncertain, we remain confident in our delivery and are in line with the Board’s expectations for 2012.”