ONLINE GAMBLING DIVISION TURNS IN A STRONG PERFORMANCE FOR LADBROKES

29 February 2008

Strong delivery by remote gaming divisions, but online poker slumps 11.4 percent


In sharp contrast to the rather disappointing William Hill plc results earlier this week, rival UK gambling group Ladbrokes has delivered an impressive full year result that features a 60 percent rise in pre-tax profit and an almost 30 percent growth in gross win.

One of the stars of the year was the remote gambling division, which produced a 20 percent surge in pre-tax profits. The telephone service action generated by high roller wagering made a significant contribution to remote gaming results. Online sportsbook operations were likewise strong performers, and John O’Reilly, head of online gaming at Ladbrokes, said that these profits would enable more marketing activity going forward.

Looking at the numbers overall, it is clear that the group enjoyed a singularly successful year in 2007, reaching full year earnings of GBP 420 million (2006: GBP 262.2 million), leading to a pre-tax profit that was up an impressive 60 percent. Gross win rose almost 30 percent to GBP 1.3 billion (2006: GBP 990 million)

Net income for the 12 months through December 31 dropped to GBP 340.8 million compared with GBP 617.2 million pounds in the previous year, the company said in its statement.

Remote gaming pre-tax profits grew to GBP 55 million (2006: GBP 44.3 million) with total e-gaming gross win coming in at GBP 156.5 million, up from last year's GBP 144.4 million.
Breaking these numbers down, the Sportsbook activities increased net revenues by 14.7 percent to GBP 52.2 million delivering a 7.2 percent margin; Casino net revenue rose 5.1 percent to GBP 43 million while Poker net revenue disappointed with a drop of 11.4 percent to GBP 31 million, which the company attributed to the ongoing competitive environment in European poker.

The remote gaming and betting side of the business has started 2008 well, showing double digit growth with the sportsbook in particular performing strongly. The acquisition of its Nordic partner Sponsio in January 2007 helped Ladbrokes increase its profit conversion from 33 percent of net gaming revenue in 2006 to 38.3 percent in 2007.

Ladbrokes statement disclosed that the group intends to maximise the brand and technology advantage it has acquired in the online sector and plans to boost investment levels during the year in a bid to acquire greater numbers of players.

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