Ladbrokes hopeful of quick shop sales to allow merger

The £106m (€125m) sale of up to 400 UK-based betting shops to allow for the merger of bookmaking giants Ladbrokes and Gala Coral is now expected to be completed in October, with Boylesports seen as a leading bidder.
Ladbrokes hopeful of quick shop sales to allow merger

The Irish bookie has long held ambitions for a retail presence in Britain and is known to be in negotiation with Ladbrokes/Coral on the matter.

Between 350 and 400 shops need to be offloaded to competitors to allow for the merger, but it remains to be seen if one player will be permitted to buy the lot, on competition grounds.

That has led some to suggest the likes of Paddy Power-Betfair and William Hill may also be interested, although both seem more focused on international online expansion rather than retail.

Even if Boylesports were to fail with any bid, it is understood it will keep an open mind regarding UK expansion, despite a deal like this offering the best opportunity.

Ladbrokes yesterday said that it is “engaging with potential buyers” and remains hopeful that a competitive process can be successfully completed by the end of the third quarter.

It has also reported total revenue of £661.8m for the first half of the year, up by over 13% on an annualised basis. Group operating profit was ahead by 34.4% at £52.3m.

Revenues for the UK retail arm grew by 6.4% to £436.6m, while operating profit jumped by nearly 12% to £63.5m.

Online showed the largest increase, with revenues up 41% to £158.1m.

In Ireland, Ladbrokes also saw continued recovery since emerging as a slimmed down entity from examinership last year.

Net revenue was down by 3.6%, year on year, at £32.4m, but operating profit before exceptional items soared by 76% to £4.4m.

Ladbrokes has 142 shops in the Republic, 50 fewer than before its Irish operation’s stint in examinership. This smaller retail estate was reflected in over-the-counter monetary amounts staked by customers — they were down 7.5%, year on year, to £218.1m.

On a like-for-like basis, the reduced estate saw the number of stakes bet grow 9.7% and net revenue increase by 2%.

Management said the group is in a better position to withstand the vagaries of sporting results, but added it has much to do — notwithstanding the merger with Coral — to ensure it remains where it wants to be.

Davy Stockbrokers said it would likely up its full-year earnings forecasts for Ladbrokes by 5%-6% — implying earnings of between £105m and £108m — on the back of yesterday’s positive update.

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