Ladbrokes reviewing Irish operations after tough year

British betting and gaming giant Ladbrokes is undertaking a review of its Irish operations after seeing its operating profits here fall almost 57% last year.

As part of its annual results presentation yesterday, Ladbrokes said its Irish operations generated an operating profit of just £4.4m (€6.02m) in 2014, down 56.9% on the £10.2m generated in 2013.

“We have tasked our international team to undertake a fundamental review of our Republic of Ireland business during the first quarter of 2015, to establish options to take this business forward,” the company said as part of its presentation.

It is not yet known how wide-reaching the effects of the review will be, but one source suggested the prospect of a number of closures and a slight change to the company’s branding in Ireland and its operating model here could be in the offing.

Ladbrokes operates 196 shops in the Republic of Ireland and employs around 1,400 people on the island as a whole.

Ladbrokes said its Northern Ireland division, which features 79 shops, remained profitable last year and showed similar top-line trends and cost performance to its UK operations.

“However, our business in the Republic of Ireland was loss-making and did not deliver on its plan,” it added. “Overall revenue in Ireland declined, as a consequence by 10.9%, and operating profit by 56.9%.”

On a group-wide basis, Ladbrokes reported revenues of just under £1.16bn, up nearly 4% on the previous year. However, group operating profit was down by over 9% at £125.4m, pre-tax profit fell by 13.5% to £98m and basic earnings per share were down by almost 14% at 10.1p.

A deeper look at the Irish operations shows a near 11% drop in net revenues last year from £80.9m to £72.2m, an 11% drop in gross profit to £64.5m a near 10% drop to £467.6m in money punters staked over the counter in shops, and a 12% drop in gross win (the amount the company made from punters’ losing bets) to £73m.

“Although Ireland’s economy continues to improve, we have seen a decline in profitability reflecting continuing highly competitive conditions in the Republic of Ireland,” Ladbrokes said, adding that certain streamlining of its business here had kept operating costs broadly flat during the year.

“Trends in Irish retail remain very concerning, with revenues down 18%. The business in the Republic of Ireland is under active review and is believed to be loss-making at the moment,” noted Davy Stockbrokers.