Ladbrokes has issued its Q1 interim management statement early, alerting investors that it expects full-year profits to be towards the lower end of expectations following a difficult start to trading in 2013.
Announcing a £13m drop in group operating profit to £37.4m, the bookmaker said several one-off trading events had compounded the shortfall already expected from a £9m hike in gaming machines duty and “the expected H2 weighting of growth in Digital revenues.”
These one-off events in the three months to 31 March 2013 were spearheaded by a £6m fall in revenue from the Cheltenham Festival, where a string of heavily backed favourites including Gold Cup winner Bobs Worth came home, helping punters profit at the expense of the bookies. Ladbrokes also blamed lower revenues from high-value gaming customers and the impact of horseracing cancellations.
The bookmaker also said it did not expect to reap the full benefits of its new digital partnership with Playtech until 2014, with profits declining in the current year.
Ladbrokes boss Richard Glynn (pictured) however emphasised the betting and egaming group maintained a strong underlying margin performance of 9.6%, reflecting the improvements made to date in that area, and that its digital turnaround remained on track. “Our partnership with Playtech aims to address our underperformance in gaming and accelerate our performance in mobile,” he said.
Ladbrokes will re-launch its mobile offerings on Playtech’s Mobenga platform during 2013, and also go live with a new “Vegas” tab on Ladbrokes.com, offering around 200 Playtech games.
Ladbrokes has engaged the software supplier to engineer the same turnaround it achieved with bitter rival William Hill’s online gaming business, announcing a performance-based software and services agreement last month.
The bookmaker’s overhaul of its digital platform has been plagued with difficulties and delays since it earmarked £50m of investment for the project more than two years ago.
Article written by Peter Holmes
