Ladbrokes Ireland gains court protection

Ladbrokes Ireland has been placed into examinership, throwing the future of hundreds of jobs into doubt.

The British betting and gaming giant was granted court protection for its Irish operations yesterday, following application to the High Court. Ken Fennell of Deloitte has been appointed interim examiner to the firm, with the process set to last for up to 100 days.

Earlier this year, Ladbrokes announced that it was undertaking a review of its Irish operations, due to an alarming fall in performance. It said the move for court protection was necessary to ensure the ongoing viability of Ladbrokes Ireland.

Group CEO Jim Mullen said the actions being taken are “regrettable”, but “absolutely necessary” in order to safeguard the Irish business.

Mr Mullen said Ladbrokes Ireland is unsustainable in its current state and “cannot be supported by the Ladbrokes board without radical change, having lost its competitive edge”. He added that the move is being taken in the best long-term interests of the business here, its employees, customers, partners and shareholders.

Ladbrokes operates 196 shops in the Republic (its profitable Northern Irish division, covering 79 shops, is not included in the Irish operations) and employs 840 people. The company said it remains “fully committed” to working with staff, through the process, and hopes the vast majority of any necessary redundancies will be voluntary. The examinership process is likely to lead to redundancies, “at all levels of the operation”, with final numbers dependent on the outcome of the estate restructuring. According to SIPTU, the cost savings plan is likely to consider the future operation of up to 60 shops out of the 196 total. The union said, last night, that it is seeking an “urgent” meeting with Ladbrokes Ireland’s management to discuss employee implications.

“We are taking this action to safeguard our business and position it for future growth,” Jackie Murphy, Ladbrokes Ireland retail director said, also noting that the process only relates to the firm’s retail operations (and not its online or telephone betting divisions), but that the business will remain fully operational — and will still take and pay out bets —during the process.

Mr Mullen — who recently took over from Richard Glynn as Ladbrokes CEO —added that the overall aim is to build a sustainable and competitive business “based in Ireland, run from Ireland, investing in Ireland and supporting the Irish economy and sporting industry, while delivering for shareholders”.

Ladbrokes’ Irish operating profits tumbled by nearly 60% last year, but management said the decision to seek examinership was taken following “several years of declining profits”, culminating in a loss after interest and tax of over €5m in the last financial year.

Ladbrokes’ annual results presentation two months ago showed the Irish division’s revenues falling by nearly 11% to £72.2m, with gross profit falling by the same percentage. The amount of money punters staked in over-the-counter transactions in the firm’s Irish shops also fell by 10% and there was a 12% decline in gross win — or, the amount the company made from punters’ losing bets — noted.

At the time, the company’s management noted that while the Irish economy continues to improve, “we have seen a decline in profitability reflecting continuing highly competitive conditions in the Republic of Ireland”.