Bookmaker’s profits fall 28% after ‘difficult year’

Operating profits at Ladbrokes’ Irish operations fell by over 28% last year, to £10.2m (€12.4m), hampered by general economic trends and the continuation of what the company called “a highly competitive trading environment”.

In what Ladbrokes referred to as “a difficult year” for its Irish operations, its operating costs here rose by nearly 7% to £62.3m.

Net revenue was up by 1.1% at £80.9m, with gross win marginally up by just under 1% to £83m.

“Although we have seen amounts staked decline, as well as an unfavourable set of results at Cheltenham [Ladbrokes Ireland won £2m less at last year’s festival, than it did in 2012], gross win decline, of £1.5m on a constant currency basis, was mitigated by a broader product offering and enhanced trading technology and processes,” the company said regarding Ireland.

Earlier this month, a spokesperson for Ladbrokes said that the company’s pending store closure plan — between 40 and 50 outlets are set to close in the UK this year — will not affect its Irish retail portfolio.

They added that while no new store acquisitions are planned for here, Ladbrokes is aiming to consolidate its operations in Ireland, refurbish existing stores and further develop its Betdaq betting exchange business, which it acquired last year.

On a group-wide basis, Ladbrokes yesterday reported a 66.3% drop in pre-tax profits to £67.6m; a 65.2% drop in basic earnings per share to 7.3p, a 0.6% dip in net revenue (before the contribution of ‘high roller’ punters is included) and a 0.3% increase in net debt to nearly £400m.

Revenue — including high roller impact — was up by 5.5%, to just over £1.1m and the company kept its total dividend per share unchanged at 8.9p.

Earnings were 1.5% behind analyst expectations. For Ireland, alone, Davy Stockbrokers had expected to see operating profits of £11.5m.

Nevertheless, group chief executive Richard Glynn said that while the 2013 figures were disappointing, “real operational progress” had been made, which has continued into this year.

Mr Glynn added that platform, product and capability upgrades will deliver “tangible benefits” from this year’s World Cup onwards.