LADBROKES CONFIRMS RIGHTS ISSUE REPORT (Update)
9 October 2009
GBP 275 million to be raised
UK online and offline gambling group Ladbrokes plc has
confirmed market rumours that it is to seek a rights
issue to raise more cash (see previous InfoPowa report).
In a statement Thursday the British bookie firm
confirmed that it will seek to raise GBP 275 million
through a discounted rights issue.
The company
also revealed third quarter results showing net gaming
revenue down 15 percent, compounding lower revenues
recorded in the first half of the year (see previous
InfoPowa report).
Ladbrokes spokesmen said the
company would offer a fully underwritten issue of 301
million new shares at 95p a share, a discount of almost
fifty percent on yesterday's closing market price of
181.2p.
The cash raised in the issue will be used
to reduce a GBP 962 million debt burden down to a more
manageable GBP 687 million and to reinforce the balance
sheet with extra capital.
Explaining the weak Q3
results, the company said these were the result of a bad
run of losses to football gamblers, in a season where
the first 66 Premier League matches saw just four draws.
Poker net revenue over the three-month period
underperformed, falling 21 percent, and operating
profits slumped badly by 58 percent to GBP 22.4 million.
"The rights issue is something the board has
been considering for some time," chief exec Chris Bell
told reporters. "Bank lending has been difficult over
the last 12 months. It has been a difficult quarter,
particularly due to the football results. We have got to
take the level of debt down and this puts the right
capital structure in place for the future."
On
the positive side, Ladbrokes casino and bingo revenues
in the third quarter were up 5 percent and 3 percent
respectively.
Investors will not be happy with
the news that the company intends to pass on a final
dividend this year, although it hopes to be better
placed to pay an interim in 2010.
GBP 2.6 million
savings in staffing and improved operational efficiency
have been identified by the company in its e-gaming
division, which will be moving to Gibraltar in order to
compete from a more favourable tax regime. Further
savings of some GBP 3.9 million will arise next year.
Online Casino News Courtesy of
Infopowa
More news here.
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