Cost-control focus helps Ladbrokes increase profit

A TIGHT focus on cost control helped the Irish arm of British bookmaker, Ladbrokes, grow its operating profit by 24% last year to £10.9 million (€13m) — even though the combined amount of money spent at the company’s Irish shops fell by 12% to just under £557m.

On a group-wide basis, Ladbrokes said yesterday that net revenue was up by 1.3% in 2010, to £976.6m; operating profit rose 20.1% to £202.3m and pre-tax profits were up from £147.1m to £193.3m.

Revenue and pre-tax figures for Ireland aren’t broken down in the main group accounts — but in 2009, the Irish business recorded a pre-tax loss of €4.2m and a marginal drop in revenue to €445.2m.

In 2010, however, Ladbrokes significantly cut operating costs in Ireland, by 7.5% to £59.4m.

Its Irish operations — which cover nearly 300 outlets on both sides of the border — contribute about 8% of total group revenue.

Its gross win amounts (the amount of money it wins from over-the-counter bets) here also fell by 7.4% to £79.9m.

While the company remains fully committed to the Irish market — it exited Italy last year — it noted that the economic and trading environment here remains “challenging”.

Group chief executive Richard Glynn — who took the helm last year — said that the fundamentals of the overall business “remain strong”.

“We’ve laid solid foundations in 2010, upon which to build. Our business is going through a process of significant change. We’ve made good progress to date and our improved performance reflects the decisive management actions taken in 2010.”

He added that the group expects to invest an additional £50m of capital expenditure — over the course of this year and next — on enhancing its technology platforms.