LADBROKES DOUBLES PROFITS

16 November 2007

But it's mainly due to volatile high roller activity


The last four months have been kind to UK betting powerhouse Ladbrokes - profits have nearly doubled, boosted by significant losses by "high roller" telephone gamblers, who once again pushed up the betting house's results as telephone betting revenues reached GBP 91.8 million.

It was just as well, because the high roller contribution helped offset weak performances from Ladbroke's high street shops, where stakes placed on horse racing were hit by wet summer weather cancellations and results that went against the bookie assessments and squeezed margins.

In one week alone over August-September leading Premiership teams all won domestic and European fixtures, nailing the bookmaker for GBP 15 million in payouts.

Despite this, profits soared by 84 percent in the four months to October 31. However, after stripping out high rollers and the one-off cost of a GBP 3.7 million TV advertising campaign, profit stats fell 12 percent.

Online gaming net revenue grew 5 percent, customer sign ups rose 21 percent and unique active customers grew by 11 percent.

The head of eGaming at the group, John O’Reilly, said "We are focusing efforts on our online poker platform, with the launch of a 3D poker interface available to players on our 2D network in the near future.”

The Times reports that fears that Ladbrokes is reliant on notoriously volatile high-stakes telephone bets drove the company's shares down 9p to 370.50p in early trading.

Finance director Brian Wallace also admitted that Ladbrokes could stand to lose millions if England and Scotland fail to qualify for the European Championships ahead of this Saturday's crunch games.

Telephone betters, who are mainly high-value gamblers, brought in GBP 918 million in the four-month period. The first half of the year to June 30, saw revenue from high rollers soar to GBP 95.5 million from GBP 13.3 million.

Ladbrokes' over-the-counter gross win - its turnover after payouts to successful punters - fell 5 percent, as the exodus to the telephone and the internet continued. However, there was an upturn in high street winnings in September and October following winter evening opening.

In Spain, the group is busy fitting out betting shops in the Madrid area in anticipation of winning a regional licence. It has also acquired 17 shops in Italy. Ladbrokes owns 2 135 betting shops in the UK.

CEO Christopher Bell commented that early trading this (November) month has seen a continuation of high roller telephone activity, which reached into double digit year on year growth in UK retail gross win.

He added: "Ladbrokes remains focused on growing its established businesses whilst developing the new opportunities in Italy and Spain."

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