Ladbrokes’ Irish profits rise to €4.96m

BOOKMAKING giant Ladbrokes’ Irish operations saw pre-tax profits soar 33% to €4.96 million last year, even though its Irish customers had a luckier time.

Ladbroke Leisure (Ireland) Limited took in more than €75 million in bets, a 9% increase, during the 12 months to December, according to accounts filed recently at the Companies Office.

However, the improved profits were more to do with operational improvements and better cost management than punters suffering poorer luck. The company’s gross profit, which consisted of the difference between amounts handed over by customers less winning bets paid out, nudged up just 4% to €10.76 million.

Operating margins, the key measure of a bookmaker’s success in the ongoing battle against punters, dropped during the year. Ladbrokes’ kept €14.30 for every €100 bet during 2003, which was a sharp fall from the €15.10 retained the previous year. Most bookmakers retain between €10 and €15 of every €100 taken in.

The bottom line, however, was boosted by stronger cost management and a once-off profit on the sale of fixed assets. Operating and administrative costs tumbled 9% to just over e6 million, while proceeds from asset disposals bumped up profits by a further €297,000.

The company spent more than €640,000 on equipment, furniture and fixtures and fittings in its 114 shops around the country, of which 58 are in Dublin and a further 14 are in Cork. While some of the shops are owned by the company, it paid out almost €750,000 in respect of rent on its Irish premises during the year.

Ladbrokes is second only to Paddy Power in the Irish market but is the biggest off-course bookmaker in Britain. It has a total of over 2,000 shops, as well as a successful online gambling operation that combines betting on horse racing and other sports with a casino facility, which allows punters to gamble on traditional casino games such as blackjack, roulette and poker.

The bookmaker is a subsidiary of the Hilton Group, the publicly-quoted international hotel and leisure group.

It warned earlier this year that its Irish profits for 2004 would take a hit from a string of unfavourable results. Ladbrokes’ total turnover for the six months to June was 21% ahead at 213 million, from 176.2m. Ireland accounts for around one-fifth of total revenues. Paddy Power, on the other hand, reported a 158% increase in profits in the six months to June, as its bottom line improved from €7.2 million to €18.7 million.

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