Online revenues up at Ladbrokes

The online and land gambling group Ladbrokes plc has turned in a positive report for 2012, thanks mainly to strong growth in its retail operations.

Although digital revenues increased, operating profit in the division took a big 39.3 percent hit, declining y-o-y from GBP 52.4 million to GBP 31.8 million.

Highlights of the report for the year ended December 31 2012 included:

* Group net revenue grew by 7.4 percent to GBP 1,053.3 million
* Group operating profit of GBP 206.1 million, up 8 percent (up 25.8 percent including High Rollers)
* 14.1 percent increase in full year dividend
* Net debt reduced by a further GBP 67 million to GBP 386.9 million

The company reported a strong retail performance, especially in sports betting, that included:

* UK Retail operating profit of GBP 180.7 million – up by 18.6 percent.
* Consistent growth in UK Retail OTC net revenue, 3.8 percent up for the year
* Machines net revenue growth of 13.9 percent, roll out of next generation terminal starting Q4 2013
* 100 net new UK shop openings planned for 2013
* Operating profit in European Retail up over 50 percent

Despite the weak operating profit in Digital, the company declared that digital development at the group is on track, with:

* Digital net revenue growth of 9 percent driven by sportsbook after a strong Q4
* Enhancements to trading contribute to significant increase in sportsbook margin, up 100 basis points
* Full launch of new sportsbook website to UK customers during Q1 2013
* Mobile platform on track to go live in Q2 2013. Mobile net revenue up 93.6 percent in 2012
* Betdaq acquisition in 2013 will enable a differentiated offer and one stop shop for customers

Richard Glynn, Ladbrokes chief executive reported:

“We are continuing to transform Ladbrokes, with the resilience and reinvigoration of the UK Retail estate driving another year of growth in profit per shop.

“The development of the Digital business is progressing well and our investment in trading systems is generating improved quality of earnings. Ongoing business momentum has enabled us to deliver a strong group performance with growth in revenue, operating profit and dividend.

“2013 will see us continue to drive investment in areas where we see opportunities to grow the business. We will accelerate our programme of shop openings, focussing on areas of unmet demand. In machines, whilst the market is becoming much more competitive, we expect to generate continued growth through the use of Odds On, more exclusive games and the roll out of the latest new terminal towards the end of the year.

“In Digital, after a delay during 2012, we will complete the roll out of our new sportsbook and mobile platforms in Q1 and Q2 2013 respectively and look to improve our capability around customer relationship management. We expect these developments to drive growth in Digital revenues and earnings, particularly during the second half of the year.

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