Operating profits sink at Ladbrokes

Richard Glynn, CEO of the UK online and land gambling group Ladbrokes plc, departs on a decidedly low note this year after a difficult five years at the helm, with the company reporting preliminary FY 2014 results that are hardly stellar.

Performance included:

* Operating profits down 9.3 percent to GBP125.4 million in 2014;

* Another 60 retail betting shops scheduled for closure in addition to the 89 outlets shuttered last year;

* Headline pre-tax profits down 13.5 percent to GBP 98 million;

* Profits after tax down 13.4 percent at GBP 93.1 million;

* Revenues of just over GBP 1.1 billion, up 3.8 percent;

* GBP 8 million negative as a result of player-friendly football results on Boxing Day;

* 2015 dividend to remain at 8.9p per share.

The digital operations of the company performed well, with headline revenues up 0.07 percent at GBP
811.5 million, and operating profit up 70.7 percent at GBP 14 million.

Digital operations Europe and Australia delivered the following highlights:

* Mobile Sportsbook growth strong: staking up 110 percent (Q4:+114percent);

* Mobile actives up 62 percent (Q4:+45 percent);

* Overall Sportsbook growth strong: staking up 32 percent (Q4:+30 percent);

* Actives up 25 percent (Q4:+14 percent);

* Tablet Sportsbook launched in December 2014. Desktop Sportsbook transition to Mobenga in H2 2015;

* Ladbrokes.com Sportsbook net revenue GBP 84.8 million up 21 percent; gross win margin down at 7.8 percent (2013: 8.1 percent);

* Ladbrokes.com Gaming net revenue down 6.7 percent at GBP 80.5 million, but returned to growth in Q4 with net revenue up 9.3 percent and actives up 23 percent;

* Loss turned into a profit in Australia; operating profit GBP 2.6 million (FY 2013: GBP 2.9 million loss)
with net revenues up 151 percent and acvtives up 88 percent;

* Exchanges: net revenue better and up 36.1 percent (Q4:+25.9 percent)

In his last annual report to the board, Glynn said that there were areas of growth in the business, and that the changes that have been made will enable Ladbrokes to be more responsive to customers and more competitive in the industry.

“Strong operational delivery delivered a second half of growth as envisaged but the GBP 8 million hit on Boxing Day did take some of the shine off our performance,” he said, adding that international growth and expanding digital operations remain priorities.

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