Ladbrokes in damage control mode
News on 16 Nov 2013
News on 16 Nov 2013
Online and land gambling group Ladbrokes plc was forced to deny that it is about to issue another profits warning after an investor relations call to Ireland’s Goodbody Stockbrokers triggered rumours of an impending alert, according to a report in The Telegraph newspaper Friday.
A Goodbody employee apparently warned clients in an email headed: “Ladbrokes – another 7pc profits warning is coming!”, which claimed that full-year operating profits forecasts of GBP 145 million should be cut by GBP 10 million.
The email went on to explain that the warning was due to around $3 million lower profits on telephoine betting; a similar shortfall in Ireland and Europe; a GBP 3 million underperformance in the UK retail business and GBP 1.5 million of losses in Australia.
“This is an alarming update,” the email declared.
With Ladbrokes shares starting to fall, the gambling group went into damage control, acknowledging the market speculation on its “adverse sporting results.”
However, the company stressed that it presently remains within the range of analyst 2013 forecasts of operating profits between GBP 138 million and GBP 151 million, and noted that with major sporting events still ahead it is “premature” to speculate on the way the year will end.
Some analysts found it unusual that Ladbrokes had felt it necessary to issue a statement on sporting results, which are notoriously volatile and short term.
Ladbrokes gave a profit warning in September – the fourth in just over a year , and the word is that CEO Richard Glynn has until next summer to show improvements, especially in the online operations, where Ladbrokes trails Bet365, William Hill and Paddy Power.
In its September warning, Ladbrokes predicted that digital profits in 2013 would be between GBP 10 and GBP 14 million – around half that expected. The company has realigned itself with a new software provider in Playtech plc, which performed well in its joint venture with William Hill Online prior to the gambling group buying out its interest.
