Ladbrokes announces drop in profits

Bookmaker Ladbrokes today said profits were down 58% after it suffered a barren start to the English Premier League football season.

The slide in operating profits to £22.4m (€24.3m) for the three months to September 30 comes after a winning start to the season by Chelsea and Manchester United and the low incidence of draws – the bookies’ favourite result.

The update on trading emerged as Ladbrokes announced plans to raise £275m (€298m) from investors in a bid to reduce its debt position.

Ladbrokes said just four - or 6% - of the first 66 games of the season ended in draws, compared with the five-season average of 25%. Bookies prefer draws because punters tend to place wagers on winning results.

Firms have also been hammered by a run of wins for the league’s most heavily-backed teams, as Chelsea and Manchester United secured victories in all but one of their seven league games in the period up to the end of September.

Ladbrokes chief executive Chris Bell said poor margins in horse racing and the weak economic environment also affected the company’s profitability.

The tough trading conditions have led the company to step up cost saving efforts, including through a salary freeze until January 2011 and the withdrawal of its full-year dividend payment to shareholders.