Leicester City title win would cost Ladbrokes €3.8m
That was bookmakers’ worst Cheltenham’s ever. They had combined losses of £60m. In Ladbrokes’ first quarter trading update — its first since reporting annual losses of £43.2m in February — chief executive Jim Mullen, yesterday, called the festival “the worst in living memory”, taking the shine off what had been an encouraging quarter.
Ladbrokes grew net revenue by 10.6% in the first three months of the year, with UK retail net revenue up by 4% and digitial revenues ahead by 36.5%, on a year-on-year basis. The company was helped by wider football results and a successful Grand National, and management remains confident of meeting its full-year targets.
However, Mr Mullen attacked rivals’ methods at Cheltenham.
“At Cheltenham, we were reminded of the intense competition, with offers and pricing at levels which, in our view, abandoned bookmaking principles. We competed hard, but refused to pursue unsustainable strategies and our stance remains that we will compete where we know we can get the right returns from the right customers,” he said.
In Ireland, Ladbrokes saw a 7.9% annualised drop in amounts staked in over-the-counter bets. However, this was largely due to the smaller stature of the company’s retail network here, following Ladbrokes Ireland’s exiting of examinership. On a like-for-like basis, amounts staked by punters here grew by 6.8%.
The first-quarter revenue exceeded analyst expectation and Davy Stockbrokers viewed the update as “an encouraging statement”.
“The group should benefit from Euro 2016 and this implies that the revenue beat for the first half, as a whole, should be greater again. Against a backdrop of negative commentary relating to Cheltenham, we suspect that this statement will very much ease investor concerns,” said Davy’s David Jennings and Robert Stokes, in a note.
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