Ladbrokes-merged company reports on performance in twelve weeks ended July 2 2016, with online operations especially strong
In accordance with Listing Rule 5.6.15G(4) on the London Stock Exchange, Ladbrokes plc has published results from merged partner Gala Coral for the twelve weeks ended July 2 2016 (the third quarter), when the merger became effective.
Highlights of the quarter include:
* Coral Group Net revenue up over 10 percent at £264 million;
* Group EBITDA up 13 percent at £57.7 million;
* Coral Retail EBITDA down 2 percent at £31.9 million;
* Coral Connect: Another strong quarter with 74,000 new sign ups;
* Eurobet Retail EBITDA up 47 percent at £5.3 million – sports stakes rose 38 percent;
* Online EBITDA up 26 percent at £21.6 million, with online net revenue up 19 percent, Coral.co.uk net revenue up 26 percent and Eurobet.it net revenue up 25 percent;
The company also provided year-to-date figures:
* Coral Group Net revenue up 12 percent at £868.9 million;
* Coral Group EBITDA up 15 percent at £182.3 million;
* Online EBITDA up 48 percent at £58.7 million, with online net revenue up 30 percent, Coral.co.uk net revenue up 46 percent and Eurobet.it up 34 percent;
Quarter 3 operational overview:
Management reported that growth in Coral Retail and Online was dampened by new regulatory requirements implemented during Q2, including teething problems around the introduction of new player protection measures which have since been fully resolved.
Year to Date overview:
Strong online and retail growth was achieved with UK football margins significantly better year-on-year. Football margins in Italy were also ahead of the preceding year, albeit still around 2.5pp behind expectations.
Management reported that online net revenue rose 19 percent at £76.3 million, but marketing costs rose 35 percent and now equate to 21 percent of online net revenue, an increase of 2pp from the prior year. Third quarter EBITDA rose 26 percent y-o-y at £21.6 million, whilst year-to-date EBITDA was up 48 percent y-o-y at £58.7 million. Adjusted for Point of Consumption Tax, underlying EBITDA was 72 percent ahead.
Coral.co.uk posted net revenues up 26 percent at £42.3 million, made up of sports (up 37 percent at £19.4 million) and gaming (up 19 percent at £22.9 million);
Sports gross win margin was 9.4 percent, well ahead of expectations.
Active player numbers rose 35 percent, with high levels of customer acquisition during the Euro 2016 Football Championships despite a decision not to advertise on TV.
Mobile stakes represented 80 percent of sports stakes, an increase of 12 percent over the preceding year, and 73 percent of gaming stakes (up 14.4 percent). Players responded favourably to the relaunched proprietary coral.co.uk app.
Gala websites also performed positively, with Galabingo.com net revenue up 7 percent at £20.1 million. Mobile stakes represented 60 percent of total stakes, with growth driven by new exclusive gaming content. Galacasino.com improved net revenue by 8 percent to £2.8 million.
Eurobet.it recorded net revenue up 25 percent at £11.1 million, with sports net revenue up 27 percent at £5.6 million, and gaming net revenue up 22 percent at £5.5 million.
Active players were 33 percent ahead of last year and first-time depositors 41 percent ahead, driven by high levels of direct acquisition throughout the Euro 2016 Football Championships, and multi-channel acquisition through the retail shop estate.
Management reported on Current Trading for the 8 weeks ending 28th August, noting that business has been positive, with continued machines growth in Coral Retail, sports stakes well ahead in Eurobet Retail and good volume growth in Online.
Sports gross win margins are, however, behind last year's levels primarily due to poor horse racing results in the UK.
Access the full report here: http://www.galacoral.co.uk/financial-centre/results-centre/2016
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