12th Aug 2014 07:41
LONDON (Alliance News) - Betting firm Ladbrokes PLC Tuesday posted a sharp fall in profits in the first half of its financial year, despite an uptick in revenue and a welcome boost from the football World Cup, as the business failed to recover from big pay-outs earlier in the year.
The FTSE bookmaker said revenue in the six months to June 30 was up 2.6% to GBP577.8 million from GBP563.0 million a year earlier, bolstered by the recent FIFA World Cup, which started in June and ended mid-July, and strong mobile growth. Including telephone betting from the big-money gamblers that Ladbrokes calls "high rollers", revenue was up 4% to GBP589.3 million.
However, it was still not enough to make up losses from big pay-outs earlier in the year, when an unusually high number of favourites won their football matches, and Ladbroke's pretax profit in the period almost halved to GBP27.7 million, down from GBP55.1 million a year earlier.
Similar to other UK betting firms, including William Hill PLC, Ladbrokes was hit by a big run of punter-friendly sports results, notably in football in January and in horse racing in June. Ladbrokes had already warned earlier in the year that it would not be able to make up the losses sustained during those "punter friendly" weekends.
"The first-half 2014 operating profit was below that achieved in the first half of 2013, but ahead of the second half of 2013 as we previously guided, despite poor industry wide sporting results," the company said in a statement.
Ladbrokes maintained its interim dividend at 4.3 pence per share, but reiterated that the dividend payment for the full year will be at least 8.9 pence, unchanged from the previous two years. The company said it is confident of meeting full-year expectations, as long as sporting results don't go against it again as it did in parts of the first-half.
"With the group well positioned to capitalise on the 2014/15 football season across all platforms, the board remains confident of the outlook for the business and in delivering a result in line with its expectations for the current year, subject to no further adverse regulatory changes and a normal run of sporting results in the second half," it said.
Ladbrokes shares were up 3.3% at 134.80 pence Tuesday morning, one of the biggest gainers on the FTSE 250.
The company said since the end of the first half, trading in the period ending August 5 remained positive, with net revenue up 18% bolstered by revenue from Australia and from the World Cup.
Ladbrokes has been pumping money into its online operation as it tries to upgrade its offer, while partnering with Playtech PLC to provide the technology platform. It's also looking to drive its new Australian business and Betdaq, a business it acquired last year.
On the online side of the business, the group said its saw a strong increase in Sportsbook revenue driven by stakes made via mobile devices.
By Rowena Harris-Doughty; [email protected]; @rharrisdoughty
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